Federal Poverty Level Guidelines and Chart

Are You Eligible for Federal Benefits in 2020?

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The U.S. federal poverty level is a measure of income used by the U.S. government to determine who is eligible for subsidies, programs, and benefits. 

The Department of Health and Human Services updates the poverty guidelines each January. It raises them to account for inflation.

2020 Federal Poverty Guidelines Chart

The HHS Department issues poverty guidelines for each household size. For example, the poverty level for a household of four in 2020 is an annual income of $26,200. To get the poverty level for larger families, add $4,480 for each additional person in the household. For smaller families, subtract $4,480 per person. Guidelines for Alaska and Hawaii are higher since it's more expensive to live there. The chart below calculates it for you.

Number of People in Household 48 States & DC Alaska Hawaii
One $12,760 $15,950 $14,680
Two $17,240 $21,550 $19,830
Three $21,720 $27,150 $24,980
Four $26,200 $32,750 $30,130
Five $30,680 $38,350 $35,280
Six $35,160 $43,950 $40,430
Seven $39,640 $49,550 $45,580
Eight $44,120 $55,150 $50,730
For nine or more, add this amount for each additional person $4,480 $5,600 $5,150

Agencies help families who earn more than the federal poverty level. For example, some programs offer subsidies to families that are 150% of the federal poverty level. For a household of four, that would be 1.5 x $26,200 = $39,300. 

Programs That Use the Poverty Guidelines

The Supplemental Nutrition Assistance Program is available to those with gross monthly income that is 130% of the federal poverty level. A household must also have less than $3,500 in assets if an elderly or disabled person lives there or les than $2,250 in assets if no elderly or disabled person lives there.

Medicaid is available to families whose income is 138% of the poverty level. The Affordable Care Act provides insurance subsidies for households between 100% and 400% of the poverty level.

Other programs that use the federal poverty guidelines include Head Start, the National School Lunch Program, the Low-Income Home Energy Assistance Program, and the Children’s Health Insurance Program

Federal programs that hand out cash don't use the poverty guidelines. These programs include Temporary Assistance for Needy Families, the Earned Income Tax Credit, and Supplemental Security Income

The Poverty Level and Obamacare

In October 2013, the poverty level became relevant to millions more Americans. That's when the health insurance exchanges for Obamacare opened for enrollment. Those making 400% or less of the poverty level became eligible for tax credits to help pay for insurance costs. The savings on insurance premiums varies according to household size, in addition to income.

How the Poverty Guidelines Measure Eligibility

The poverty level measures a family's annual cash income. Each agency administering an assistance program determines whether to use the family's before-tax or after-tax income in computing eligibility.

Other poverty indicators measure total wealth, annual consumption, or a subjective assessment of well-being. These indicators point to one’s standard of living, which takes into account only the amount of material goods and services available to the individual or family. 

Poverty Level Guidelines vs. Poverty Level Threshold

People use the term poverty level to describe both the poverty guidelines and the federal poverty threshold. The U.S. Census Bureau provides statistics on the poverty threshold. It determines how many Americans live in poverty. The government uses the poverty threshold to calculate the poverty guidelines.

Pros and Cons

The poverty guidelines are the same across the nation, except for Hawaii and Alaska. They ignore the wide difference in the cost of living between the contiguous states. There is also a big difference between urban areas and rural areas. As a result, benefits buy more in rural areas, but the opportunities to find a good job and escape poverty are generally more readily available in urban areas.

On the other hand, if poverty levels were adjusted for these variations, even more people would flock to urban areas to take advantage of the higher benefits. 

Pros
  • Adjusts for cost of living differences between Alaska, Hawaii, and the rest of the country.

  • Slows down flight to urban areas.

Cons
  • Doesn't adjust for differences in cost of living between urban and rural areas.

History 

The federal poverty level originated during President Lyndon B. Johnson's War on Poverty. It was one of the tools developed to measure and eradicate poverty. 

In his Inaugural address, Johnson called for "the richest nation on earth" to win the war. He wanted to assist "American families with incomes too small to even meet their basic needs." This War on Poverty created many of today's welfare programs.

Article Sources

  1. U.S. Department of Health and Human Services. “Poverty Guidelines.” Accessed Feb. 5, 2020.

  2. U.S Department of Health and Human Services. "Frequently Asked Questions." Accessed Feb. 5, 2020.

  3. U.S. Department of Agriculture. "SNAP Special Rules for the Elderly or Disabled." Accessed Feb. 5, 2020.

  4. U.S. Centers for Medicare & Medicaid Services. "Federal Poverty Level (FPL)." Accessed Feb. 5, 2020.

  5. HealthCare.gov. “How To Save On Your Monthly Insurance Bill With A Premium Tax Credit.” Accessed Feb. 5, 2020.

  6. U.S. Department of Health and Human Services. “Frequently Asked Questions Related to the Poverty Guidelines and Poverty.” Accessed Feb. 5, 2020.

  7. University of Virginia, Miller Center. “Lyndon B. Johnson's State of the Union Address, Jan. 8, 1964.” Accessed Feb. 5, 2020.