# Computations for the 2006 Annual Update of the HHS Poverty Guidelines for the 48 Contiguous States and the District of Columbia

(1)
Persons in family or household
(2)
Poverty thresholds for 2004 — published Aug. 2005a/
(3)
Column 2 multiplied by 1.034 price inflatorb/
(4)
Difference between successive Column 3 entries
(5)
Average difference in Column 4c/
(6)
January 2006 poverty guidelines
1 \$9,645 \$9,973     \$9,800
\$2,780 \$3,400
2 12,334 12,753     13,200
2,826 3,400
3 15,067 15,579     16,600
4,384 3,400
4 19,307 19,963     20,000d/
3,644 3,400
5 22,831 23,607     23,400
3,058 3,400
6 25,788 26,665     26,800
3,565 3,400
7 29,236 30,230     30,200
3,521 3,400
8 32,641 33,751     33,600
Notes:

a/  Column 2 entries are weighted average poverty thresholds from U.S. Census Bureau, Current Population Reports, Series P60-229, Income, Poverty, and Health Insurance Coverage in the United States:  2004, Washington, D.C., U.S. Government Printing Office, August 2005, p. 45.

b/  Price inflation calculated from Table 1A of U.S. Department of Labor, Consumer Price Index press release (USDL-06-84), January 18, 2006.  (The Consumer Price Index (CPI-U) for all items was 188.9 for calendar year 2004 and 195.3 for calendar year 2005, an increase of 3.4 percent.)

c/  The arithmetic average of Column 4 entries, rounded to the nearest multiple of \$20.

d/  Obtained by multiplying the average poverty threshold for a family of four persons for 2004 (\$19,307, from Column 2) by the price increase factor from 2004 to 2005 (1.034) and rounding the result upward to the nearest whole multiple of \$50.  All other entries in Column 6 are obtained by successive addition or subtraction of the average difference (\$3,400) to the size–4 2006 guideline entry (\$20,000).

For Alaska and Hawaii, where the cost of living is traditionally believed to be significantly higher than in other states, scaling factors of 1.25 and 1.15, respectively, are applied to the 2006 guideline for a family/household of four for the 48 contiguous states, and the results (if not already a multiple of \$10) are rounded upward to the nearest whole multiple of \$10.  (These scaling factors were based on Office of Economic Opportunity administrative practice for these two states only beginning in the 1966-1970 period.)  These scaling factors are applied to the average difference for the 48 contiguous states (Column 5) to obtain average differences for Alaska and Hawaii for deriving guidelines for other family/household sizes; these average differences for Alaska and Hawaii are rounded to the nearest multiple of \$10.  For families/households with more than 8 persons, add the following amount for each additional person: \$3,400 (48 contiguous states and the District of Columbia); \$4,250 (Alaska); \$3,910 (Hawaii).