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 determine who is eligible for federal subsidies and aid. 

The Department of Health and Human Services issues new poverty guidelines each January. That's when it adjusts for inflation. For more, see How the Poverty Level Accounts for Inflation.

2017 Federal Poverty Guidelines Chart

HHS issues guidelines for each household size.

For example, the guideline for a household of four is an annual income of $24,600. Add $4,180 for each additional person in the household to compute the guideline 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.

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

 

Agencies help 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 household of four that would be 1.5 x $24,600 = $36,900. To find out more about these specific guidelines, see HHS 2017 Federal Poverty Guidelines.

Which Programs Use the Poverty Guidelines?

The assistance programs that use the guidelines include the Supplemental Nutrition Assistance Program. It is available to those who earn 130 percent of the federal poverty guidelines. Households must also have less than $3,500 in assets with an elderly or disabled person, or $2,250 or less in households without an elderly or disabled member.

A household is eligible for Medicaid if its income is 138 percent of the poverty level. The Affordable Care Act provides insurance subsidies for households between 138 percent and 400 percent of the poverty level. 

Other programs 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 the 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 percent or less of the poverty level became eligible for tax credits to help pay insurance costs.

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 became eligible for Medicaid. Specific eligibility depends on each particular state. Applicants  find out if they are eligible when they apply on the exchanges. For more, see Obamacare Summary and How Will Obamacare Affect Me?

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

Other poverty indicators measure total wealth, annual consumption or a subjective assessment of well-being.

For more on these methods, see Standard of Living.

HHS prefers the term "poverty guidelines" instead of "poverty level" because it is more precise. People use the term poverty level to describe the poverty guidelines and the federal poverty threshold. The second terms is a U.S. Census Bureau statistic. It  tells you how many Americans live in poverty. The poverty guidelines are based on the threshold, but HHS uses it to administer poverty programs. Here is a summary of the differences between the poverty threshold and the poverty guidelines.

History 

The federal poverty level originated during President Lyndon 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. (Source: "Lyndon Johnson's War on Poverty," National Public Radio, January 8, 2004. "Inaugural Speech," Johnson Archives.)