Every year, the government announces how many Americans are poor. But that single number depends on how you decide to count, and there is more than one official way to do it.
If you have ever wondered “what is the official poverty level,” the short answer is a dollar line from the 1960s that has been adjusted for prices ever since. The longer answer involves a second measure that tells a different story. Understanding both helps you read poverty news with a clearer head.
Quick answer: The official poverty level is a set of income thresholds, based on family size, that the Census Bureau uses to count who is poor. It compares pre-tax cash income to a fixed line. The Supplemental Poverty Measure (SPM) counts more resources, such as food assistance and tax credits, subtracts some expenses, and adjusts for local housing costs. The two can show different poverty rates and different groups at risk.
What is the official poverty level?
The official poverty measure (OPM) is a statistical yardstick. Each year the Census Bureau compares a family’s pre-tax cash income to a threshold that depends on the size and makeup of the family. If income falls below the threshold, everyone in the family is counted as poor.
The thresholds are the same across the 48 contiguous states, whether you live in a high-cost city or a rural county. They are updated annually for inflation, not for changes in how families spend their money. For current numbers, check the Census Bureau directly.
It helps to know that “poverty level” can mean two related things. The Census thresholds are used for statistics. A simplified version, the poverty guidelines from the Department of Health and Human Services, is used to decide eligibility for many programs. Our guides on the federal poverty level and the poverty threshold explain how the two differ.
Where the official measure came from
The measure was developed in the early 1960s, when the government wanted a way to track poverty as it launched anti-poverty efforts. An economist at the Social Security Administration built it around a simple idea: food was a large share of a typical family’s budget, so a low-cost food plan could be multiplied to estimate a minimum budget.
That logic made sense for its time. The Census Bureau adopted it as the official statistic, and it has been used for decades. The core method has changed little since, apart from the yearly inflation adjustment and some updates to family-size categories.
What the official measure counts and leaves out
The official measure counts money income before taxes: wages, Social Security, pensions, interest, cash welfare and similar sources. It leaves out many things that shape a family’s real financial life.
- Not counted as resources: food assistance, housing subsidies, and refundable tax credits like the Earned Income Tax Credit.
- Not subtracted as costs: taxes, child care, commuting costs, and out-of-pocket medical expenses.
- Not adjusted: differences in housing costs from one region to another.
What is the Supplemental Poverty Measure?
The Supplemental Poverty Measure was created to address those gaps. The Census Bureau began publishing it in 2011, drawing on recommendations from a National Academy of Sciences panel from the 1990s and later work by a federal interagency group. It does not replace the official measure. It runs alongside it.
The SPM asks a slightly different question. Instead of “does cash income clear a fixed line,” it asks, “after benefits and necessary expenses, do resources cover a basic bundle of goods?”
How the SPM works
The SPM builds its threshold from what households spend on a basic set of needs: food, clothing, shelter and utilities, with a small additional amount for other needs. The threshold is also adjusted for local housing costs and for whether a family rents, owns with a mortgage, or owns outright. On the resource side, it adds the value of many government benefits and subtracts certain necessary costs.
The SPM also defines the unit differently. It generally counts everyone who lives together and shares resources, including unmarried partners and foster children, rather than only people related by birth or marriage.
Side by side: how the two measures differ
The table below summarizes the main design differences. Treat it as a map, not a verdict on which is better.
| Feature | Official measure (OPM) | Supplemental measure (SPM) |
|---|---|---|
| Basis of threshold | Fixed 1960s food-based formula, adjusted for inflation | Recent spending on food, clothing, shelter and utilities |
| Geographic adjustment | None across the contiguous states | Adjusts for local housing costs |
| Income counted | Pre-tax cash income | Cash plus many in-kind benefits and tax credits |
| Expenses subtracted | None | Taxes, work and child care costs, out-of-pocket medical costs |
| Who is grouped together | Related family members | People who live together and share resources |
| Main use | Official statistic with long historical trend | Research measure of the effect of policy and costs |
The same family can look poor under one measure and not under the other, depending on what each chooses to count.
Why the two measures can tell different stories
Because the measures count different things, they can diverge. Here is how the main choices pull in different directions.
- Counting benefits lowers poverty for some groups. When food assistance, housing help and tax credits are counted as resources, families who rely on them can move above the line. Researchers often find that these programs reduce poverty most among children and low-income working families.
- Subtracting costs raises poverty for others. Taxes, medical bills and work expenses reduce what a family can actually spend. This tends to push some groups, such as older adults facing high medical costs, closer to or below the line.
- Housing adjustments change the geography. In expensive metropolitan areas, a given income buys less, so more people in those places can fall below the SPM line. In lower-cost areas, the reverse can happen.
- Different household definitions shift who is counted. Counting cohabiting partners or other sharing arrangements can change household resources and thus who is classified as poor.
In recent years, the overall SPM rate has often been in the same general range as the official rate, but the composition has differed. The SPM has tended to show lower child poverty when benefits are strong and higher poverty among older adults. Exact figures change every year, so check the Census Bureau’s latest release rather than relying on a number you read somewhere.
The case for sticking with the official measure
Defenders of the official measure make several serious points.
First, it is simple and transparent. Anyone can understand a fixed line and a single income test. Second, it offers an unusually long record, so researchers can compare poverty across many decades using the same method. Changing the method risks breaking that comparison.
Third, some argue that counting benefits as income can blur the question of how many people are poor before help arrives. If you want to know how much need exists in the economy, a pre-benefit measure can be informative. Fourth, any measure that adjusts for local costs or defines needs by recent spending involves judgment calls, which can become targets for political dispute. A fixed formula is harder to tinker with.
The case for the Supplemental Poverty Measure
Supporters of the SPM respond that the official measure no longer matches modern life. Families today spend a much smaller share of their budgets on food and a larger share on housing, health care and child care, so a food-based formula can miss what it costs to get by.
They also note that a measure that ignores benefits cannot tell us whether anti-poverty programs work. If food assistance or tax credits and wage increases lift a family out of poverty in real life, the official measure will never show it. That makes it hard to evaluate policy, which matters to people on every side of the debate, whether they want to expand programs, trim them, or redesign them.
Finally, they argue that accounting for regional housing costs gives a fairer picture of hardship in expensive cities. For more on the criticisms, see our explainer on why critics call the poverty line outdated.
Every poverty measure is a set of choices about what counts as a need, a resource, and a household.
Facts, interpretations and values
It helps to separate three layers of this debate.
Facts: The two measures use different definitions, and they produce different rates and different patterns across groups. These are matters of record you can verify in Census publications.
Interpretations: Does a lower SPM child poverty rate mean programs are working well, or that the official line is too crude? Does a higher SPM rate for older adults show a real hardship that the old measure hid? Reasonable researchers read the same data differently.
Different choices also reflect different values. Some people prioritize stability and comparability. Others prioritize realism about current costs. Some focus on market income and self-reliance. Others focus on whether basic needs are met after policy has done its work. These priorities also shape broader thinking about the best way to build wealth. None of these is a factual error. They are priorities about what a poverty statistic is for.
Why this matters beyond statistics
Poverty numbers feed into public debate, and in some cases into program rules. Many programs, including some health coverage and nutrition programs, use thresholds tied to the poverty guidelines to decide eligibility. You can see how that works in our guide to the federal poverty level and Medicaid, and how size changes the line in the poverty line for a family of four.
Wages enter the picture too. A full-time job at the minimum wage can leave a family near or below the line, depending on household size and costs. If you want to dig into that, our history of the minimum wage gives the background, and a planned piece on what hourly wage counts as a poverty wage will compare the poverty line with a living wage.
Poverty is also shaped by housing, schools and accumulated assets, not just income. Our overview of how policy shaped wealth in America and our guide to why housing is so expensive show why an income line alone cannot tell the whole story. A future article on income versus wealth will pick up that thread.
How to read a poverty headline
When you see a poverty statistic, a few quick questions can keep you grounded.
- Which measure is being used: official or supplemental?
- Does the figure count benefits and taxes, or only cash income?
- Is it about all people, children, older adults, or a specific region?
- Who benefits from emphasizing one number over the other?
That last question is not an accusation. Advocates for expanding programs, advocates for limiting them, and journalists looking for a clear story can all have reasons to favor one measure. Naming incentives helps you read charitably and critically at once. Our media literacy guide has more tools for this.
Think about it: If you were designing a poverty measure from scratch, what would you include as a need, and what would you count as a resource? Where might a neighbor with a different background draw the line, and what would that tell you about your shared priorities?
Key takeaways
- The official poverty level is a set of Census thresholds, varying by family size, compared against pre-tax cash income.
- The Supplemental Poverty Measure counts benefits and tax credits, subtracts some necessary expenses, and adjusts for local housing costs.
- The two measures can produce different rates and show different groups as most at risk.
- The official measure offers simplicity and a long historical record; the SPM offers a more modern picture of costs and policy effects.
- Check the Census Bureau and HHS for current figures, since thresholds and guidelines change every year.
- Reading both measures together gives a fuller picture than either alone.
For more on this topic area, explore our full Money, Housing & Opportunity section, or start with the plain-language guide to how policy shaped wealth in America. And if these numbers spark a conversation at the dinner table, our guide on talking about politics with family may help.
Frequently asked questions
What is the official poverty level?
It is the dollar line, set by the Census Bureau for statistical purposes, below which a family is counted as poor under the official poverty measure. The line depends on family size and composition, and it is based on cash income before taxes. It is updated each year for inflation, so check the Census Bureau for current figures.
Is the Supplemental Poverty Measure the same as the federal poverty level?
No. The Supplemental Poverty Measure is a Census Bureau research measure that adds benefits, subtracts some expenses and adjusts for local housing costs. The federal poverty level, usually called the poverty guidelines, is a simplified version issued by the Department of Health and Human Services that is used to decide eligibility for many programs.
Why do the two measures give different poverty rates?
They count different things. The official measure counts only cash income and ignores most government benefits and taxes. The supplemental measure counts benefits like food assistance and tax credits as resources, subtracts costs like taxes and medical expenses, and adjusts for housing costs. Those choices move the rate up for some groups and down for others.
Does the Supplemental Poverty Measure replace the official measure?
No. The official measure remains the government’s statistical standard, and the supplemental measure is published alongside it. Many federal programs use the poverty guidelines rather than either statistical measure to decide who qualifies.
Which measure is more accurate?
It depends on the question. The official measure is simple and offers a consistent comparison across many decades. The supplemental measure tries to reflect modern living costs and the effect of policy, but it relies on more assumptions. Most researchers find both useful when read together.