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Measuring Poverty: A New Approach (1995)

Chapter: APPENDIX D Assistance Programs for People with Low-Incomes

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Suggested Citation:"APPENDIX D Assistance Programs for People with Low-Incomes." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
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Page 433
Suggested Citation:"APPENDIX D Assistance Programs for People with Low-Incomes." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
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Page 434
Suggested Citation:"APPENDIX D Assistance Programs for People with Low-Incomes." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
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Page 435
Suggested Citation:"APPENDIX D Assistance Programs for People with Low-Incomes." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
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Page 436

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APPENDIX D 433 APPENDIX D Assistance Programs for People with Low- Incomes This appendix describes assistance programs, partly or wholly financed by the federal government, that provided income support, near-cash income support, or other benefits and services to people with lowincome through 1994. Table D-1 categorizes 70 programs by the type of test they use to determine income eligibility for program benefits. In fiscal 1992 the expenditures of these programs totaled $279 billion. Of these 70 programs, • 14 of them (20%), which account for 2 percent of the expenditures, use the poverty guidelines (or a multiple of them) as the sole criterion of income eligibility (see Part A of Table D-1); • 13 of them (19%), which account for 56 percent of the expenditures, accord eligibility to people already participating in another program, such as Aid to Families with Dependent Children (AFDC) and Supplemental Security Income (SSI), and also permit other people to qualify by comparing their incomes to the poverty guidelines (see Part B of Table D-1);1 1 In some programs, the comparison is to a multiple of the poverty guidelines if that level is higher than a percentage of state median income or a percentage of the lower living standard income level defined by the U.S. Department of Labor. The lower living standard income levels are published by the department's Employment and Training Administration for 25 metropolitan areas and for metropolitan and nonmetropolitan components of the four census regions, Alaska, and Hawaii. These levels represent the Bureau of Labor Statistics lower level family budget, developed for 1967 on the basis of 1960-1961 consumer expenditure data and last published for 1981, updated for price changes. In 1993, 70 percent of the lower living standard income level for a family of four varied from $14,300 in nonmetropolitan areas of the South to $23,870 in metropolitan areas of Hawaii; in comparison, the federal poverty guideline for a family of four in 1993 was $14,350 (Burke, 1993: Tables 12, 14).

APPENDIX D 434

APPENDIX D 435

APPENDIX D 436 • 12 of them (17%), which account for 8 percent of expenditures, determine eligibility on the basis of comparing family income to a percentage of the local area median family income defined by the U.S. Department of Housing and Urban Development (HUD), or, in one case, a percentage of state median income for families of the same size (see Part C of Table D-1);2 • 31 of them (44%), which account for 34 percent of expenditures, have their own income eligibility standards or accord eligibility to people who qualify for other kinds of assistance (see Part D of Table D-1).3 For some of the 31 programs that have their own income eligibility standards, such as AFDC, Foster Care, and Aid to Refugees, the responsibility for determining income eligibility standards rests with the individual states (or localities). For other programs, such as the Earned Income Tax Credit (EITC), the federal portion of SSI, veterans' pensions, and various education grant and loan programs, federal standards apply. The 14 assistance programs that use the poverty guidelines as the sole 2 Almost all of these programs provide some type of housing assistance to low-income families. HUD prepares estimates of median family income for metropolitan areas and nonmetropolitan counties in the United States (Office of Policy Development and Research, 1992b). 3 One program assigned to this category—the Child Development Associate Scholarship Program—does not, properly speaking, have its own income eligibility standard, but it does not fit any of the other three categories either. It accords eligibility to people with income below 195 percent of the Department of Labor lower living standard income level.

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Each year's poverty figures are anxiously awaited by policymakers, analysts, and the media. Yet questions are increasing about the 30-year-old measure as social and economic conditions change.

In Measuring Poverty a distinguished panel provides policymakers with an up-to-date evaluation of:

  • Concepts and procedures for deriving the poverty threshold, including adjustments for different family circumstances.
  • Definitions of family resources.
  • Procedures for annual updates of poverty measures.

The volume explores specific issues underlying the poverty measure, analyzes the likely effects of any changes on poverty rates, and discusses the impact on eligibility for public benefits. In supporting its recommendations the panel provides insightful recognition of the political and social dimensions of this key economic indicator.

Measuring Poverty will be important to government officials, policy analysts, statisticians, economists, researchers, and others involved in virtually all poverty and social welfare issues.

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