Federal Poverty Level: Definition, Guidelines, Chart

Are You Eligible for Federal Benefits in 2017?

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A girl pays for her mother's groceries using Electronic Benefits Transfer (EBT) tokens, more commonly known as Food Stamps, at the GrowNYC Greenmarket in Union Square in New York City. Photo by Andrew Burton/Getty Images

Definition: The Federal poverty level is the indicator the U.S. government uses to define who is poor. It measures a family's annual cash income. That's how it differs from other poverty indicators that measure total wealth, annual consumption, or a subjective assessment of well-being. The Department of Health and Human Services issues the poverty level guidelines each January. 

The poverty level determines who can receive federal subsidies or aid.

These programs include Food Stamps, Medicaid and the Affordable Care Act. They also include Head Start, the National School Lunch Program, the Low-Income Home Energy Assistance Program and the Children’s Health Insurance Program. 

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 the Supplemental Security Income. (Source: "Frequently Asked Questions," U.S. Department of Health and Human Services.)

The poverty level is one of two definitions of poverty. Two separate agencies use them for entirely different purposes. The second is the poverty threshold. That tells you how many Americans live in poverty. It's measured a little differently. Here's more on the Federal Poverty Threshold.

Federal Poverty Level Chart

For 2017, the Federal poverty guideline is an annual income of $24,600 for a family of four.

That guideline is the most commonly used statistic. Add $4,180 for each additional person to compute the Federal poverty level for larger families. Subtract $4,180 per person to calculate it for smaller families. That's the guideline for the 48 contiguous states. Guidelines for Alaska and Hawaii are a little higher since it's more expensive to live there.

 The chart below calculates it for you.

Federal Poverty Level

Number of People in Household 48 States & DC   Alaska   Hawaii
   One        $12,060  $15,060  $13,860
   Two        $16,240  $20,290  $18,670
   Three        $20,420  $25,520  $23,480
   Four        $24,600  $30,750  $28,290
   Five        $28,780  $35,980  $33,100
   Six        $32,960  $41,210  $37,910
   Seven        $37,140  $46,440  $42,720
   Eight        $41,320  $51,670  $47,530
For more than eight, add this amount for each additional person
           $4,180    $5,230   $4,810

 

HHS includes adjustments for inflation each January. For more, see How the Poverty Level Accounts for Inflation.

Agencies help some families who earn more than the Federal poverty level. For example, some programs offer subsidies to families that are 150 percent of the Federal poverty level. For a family of four that would be 1.5 x $24,600 = $36,900. To find out more about these specific guidelines, see HHS 2016 Federal Poverty Guidelines.

The Poverty Level and Obamacare

The poverty level became relevant to millions more Americans in October 2013. That's when the health insurance exchanges for the Affordable Care Act opened for enrollment. That's because those making 400 percent or less of the poverty level became eligible for tax credits to help pay the cost of insurance.

To see the levels for different household sizes, see Will I Qualify to Save on Monthly Premiums?.

Those making 138 percent or less of the poverty level are eligible for Medicaid. Specific eligibility depends on your particular state, so you'll find out when you apply on the exchanges. For more, see Obamacare Summary and How Will Obamacare Affect Me?

History of the Poverty Level

The Federal Poverty Level originated during President 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. For more, see How the War on Poverty Became Entitlement Programs.

 (Source: "Lyndon Johnson's War on Poverty," National Public Radio, January 8, 2004. "Inaugural Speech," Johnson Archives.)