Poverty Facts

How the Government Defines Poverty

The U.S. Census Bureau uses a set of money income thresholds that vary by family size and composition to determine who is in poverty. If a family’s total income is less than the family’s threshold, then that family and every individual in it is considered in poverty. The official poverty thresholds do not vary geographically, but they are updated for inflation using Consumer Price Index, the most widely accepted index of inflation. The Consumer Price Index is generated by the Bureau of Labor Statistics to measure average changes in the prices of goods and services consumed by a typical family.

The official poverty definition refers to money income before taxes and does not include capital gains or non-cash benefits (such as public housing, Medicaid, and food stamps). Because the primary function of the poverty thresholds, as a statistical yardstick, is to classify only the neediest sectors of the population, they are a modest measure of need and do not adequately indicate the total need for assistance.

Poverty Level

Each year, the federal government calculates the minimum amount of money required by families to meet these basic needs. The resulting calculation is what is commonly referred to as the "poverty line." For 2008, the government set the poverty guidelines at:

Persons In Family Or Household	48 Contiguous States and D.C.	Alaska	Hawaii
1	$10,210	$12,770	$11,750
2	13,690	17,120	15,750
3	17,170	21,470	19,750
4	20,650	25,820	23,750
5	24,130	30,170	27,750
6	27,610	34,520	31,750
7	31,090	38,870	35,750
8	34,570	43,220	39,750
For each additional person, add	3,480	4,350	4,000

SOURCE: Federal Register, Vol. 72, No. 15, January 24, 2007, pp. 3147-3148