Income Eligibility Estimation Methods

The March Demographic Supplement of the Current Population Survey (CPS) is used to estimate the number of infants and children living in families with annual incomes below 185 percent of poverty, defined by the U.S. Department of Health and Human Services poverty guidelines according to their family size.2 Available eligibility estimates lag behind the budget process considerably. Calendar year 1999 estimates, based on the 2000 CPS, are the most recent available for the first stages of the FY 2003 budget process. Over the course of the budget approval process, the 2001 CPS data may become available (covering calendar year 2000) and may be used in the estimations for the 2003 budget. Thus, the estimates of numbers of participants will always be a few years behind.

In assessing family income in the eligibility determination process, states can adopt either the income guidelines for the Free and Reduced Price School Lunch Program or the income guidelines for free or reduced price health care programs. In general, the following income sources are counted under both guidelines: earnings, unemployment compensation, workers’ compensation, Social Security, Supplemental Security Income, public assistance, veterans’ payments, survivor benefits, disability benefits, pensions or retirement income, interest, dividends, rents, royalties and estates and trusts, education assistance, alimony, child support, financial aid from outside the household, and other income. If the free and reduced price health care definition is used, the following sources of income are excluded for determining eligibility: the value of in-kind housing and other in-kind benefits and payments or benefits provided under certain federal programs (e.g., some of the smaller social programs such the Low Income Home Energy Assistance Program, the value of benefits from the Free and Reduced Price School Lunch Program, and payments to members of various Indian tribes) (see Food and Nutrition Service Instruction 803–3, 1988). For the purposes of estimating eligibility, current FNS methods use annual census money income to define income.3 Family is defined using the Census Bureau’s family definition—that is, a group of two people or


The March CPS gathers data on family income for the previous calendar year (e.g., the 2001 March CPS collects income for the calendar year 2000). These data are usually available within 6 months of collection.


This annual income measure includes income from the following sources: earnings; unemployment compensation; workers’ compensation; Social Security; Supplemental

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