The Federal Poverty Level is a scale to judge whether or not a family's income meets the financial needs for the basic necessities of life. Understanding this poverty rating is the first key to avoid becoming one of the statistics it represents.
Poverty is the condition of not being able to meet basic life needs, such as:
- Adequate clothing for the climate
- Nutritional food
- Minimal housing
- Minimal utilities, such as electricity and water
- Applicable childcare
It should be noted that not being able to afford luxury items such as cell phones, cars, junk food, and entertainment is not part of the definition of poverty. The federal poverty level, then, is calculated based only on necessities and varies according to family size.
In 2007, the poverty threshold for a family of four was $20,650; for a single individual, it was $10,210. All sources of income, including child support, veterans' benefits, and pensions are included in that calculation, and the pre-tax total is used to determine whether or not a family meets the threshold. New guidelines are issued every year in late January or early February to account for fiscal changes such as higher utility costs, inflation, and minimum wage levels.
According to the Census Bureau, more than 35 million individuals in the United States are currently living beneath the poverty threshold; children, minorities, and senior citizens are especially vulnerable.
Finding Poverty Assistance Programs
Every state has multiple assistance programs for families in financial need. To discover these programs, interested individuals should contact their state's welfare or poverty assistance agency for updated details on program qualifications and available funds.
In addition to state programs, many independent agencies offer aid to individuals who can demonstrate that they fall below the federal poverty level or some predetermined percentage of it; many programs, for example, are open to families whose income is lower than 150 percent of the poverty level. These programs can be found through specialized assistance agencies, such as:
- Food Banks: These may include home delivery food options, soup kitchens, or food distribution centers that supply bulk items, donations, and fresh produce to families in need.
- Housing Organizations: Many non-profit housing organizations help qualified families find a place to live or complete necessary repairs on their homes at reduced prices.
- Utility Companies: Most utility companies have hardship plans to help families in financial need. These programs are often supported entirely through donations from other utility users.
- Disability Organizations: Impoverished individuals with extreme medical needs may qualify for support and care through organizations dedicated to their particular condition.
- Prescription Drug Programs: Free or discount prescription drug programs can help families below the poverty threshold get necessary medications.
- Childcare Programs: Many childcare facilities have fee waivers for families who qualify for financial assistance.
- Religious Institutions: Many churches offer a wide range of assistance to individuals with extreme financial need.
To learn about poverty assistance programs, contact individual agencies and inquire about aid programs based on the federal poverty level or other demonstrated financial need.
Applying for Aid
To determine who is most in need of financial assistance, many programs require lengthy applications. Not only does this ensure the aid goes to those who need it most, but it also helps minimize fraudulent claims. When applying for poverty assistance, individuals should be prepared to provide:
- Tax returns, possibly from several recent years to demonstrate ongoing need.
- Pay stubs with net and gross income noted.
- Paperwork from other income sources, such as child support or worker's compensation.
- Bills and receipts from expenses that affect the stated income level, such as medical expenses.
- Specialized documentation related to the aid sought, such as cost estimates for construction repairs.
The qualifications for different aid programs vary widely, and the individual's status in regards to the poverty threshold is only one consideration for many types of assistance.
Personal Steps to Stay Above the Federal Poverty Level
The best way to not become a poverty statistic is to avoid the crushing cycle of expense and debt that can sap financial resources. The more budget-conscious and financially savvy a family can be, long before their financial resources are stretched, the better likelihood there is that they will not require assistance to meet their basic needs.
Ways to save money to stay above the poverty threshold include:
- Pay down high interest debt quickly and avoid accumulating excessive credit card debt and interest charges. To avoid the temptation to use credit cards, cancel extra accounts and keep the card only for emergencies.
- Conserve electricity, gas, and water to lower utility bills. Use lower wattage light bulbs, fix leaky faucets, and insulate properly for the best results.
- Save money on phone bills by choosing the cheapest phone plan for your needs and drop cell phone extras that add up quickly.
- Shop at thrift stores and outlet stores to buy clothing at deep discounts.
- Eliminate cable or satellite television service as an unnecessary luxury.
- Choose low-cost housing options and consider moving to a lower cost housing market that is more affordable for your budget.
- Avoid eating out and choose generic brand groceries whenever possible. Buy in bulk, use coupons, and aggressively shop sales to save even more.
- Limit doctor visits to the necessities, choose generic prescription drugs, and use free clinic services whenever possible.
- Consider working extra hours to earn more money, or find a second job for extra income. Paper routes, seasonal jobs, and short term employment can provide an income boost to stay above the poverty level.
- Consider enrolling in a trade school or learning new skills to open up higher-paying employment opportunities.
The federal poverty level is a gauge for offering assistance to families in need. For more information about the current calculations, visit the U.S. Census Bureau.