Computations for the 2016 Poverty Guidelines

04/25/2016

Computations for the 2016 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 2014 — published Sep. 2015a
(3)
Column 2 multiplied by 1.001 price inflatorb
(4)
Difference between successive Column 3 entries
(5)
Average difference in Column 4c

(6)
Preliminary January 2016 Poverty Guidelines

(7)
January 2015 poverty guidelines

(8)
January 2016 poverty guidelinese

1 $12,071 $12,083     $11,880 $11,770 $11,880
      $3,311 $4,140      
2 15,379 15,394     16,020 15,930 $16,020
      3,474 $4,140      
3 18,850 18,869     20,160 20,090 $20,160
      5,385 $4,140      
4 24,230 24,254     24,300d 24,250d $24,300
      4,469 $4,140      
5 28,695 28,724     28,440 28,410 $28,440
      3,782 $4,140      
6 32,473 32,505     32,580 32,570 $32,580
      4,458 $4,140      
7 36,927 36,964     36,720 36,730 36,730
      4,045 $4,140      
8 40,968 41,009     40,860 40,890 40,890

Notes:

a Column 2 entries are weighted average poverty thresholds from U.S. Census Bureau, Current Population Reports, Series P60-252 [PDF], Income, Poverty, and Health Insurance Coverage in the United States:  2014, Washington, D.C., U.S. Government Printing Office, September 2015, p. 43.

b  (The Consumer Price Index (CPI-U) for all items was 237.017 for calendar year 2015 and 236.736 for calendar year 2014, an increase of 0.1 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 2014 ($24,230, from Column 2) by the price increase factor from 2014 to 2015 (1.001) and rounding the result upward to the nearest whole multiple of $50 ($24,300).  All other entries in Column 6 are obtained by successive addition or subtraction of the average difference ($4,140) to the size–4 2016 guideline entry ($24,300).

e  When the change in the CPI-U is positive but small, it is possible that the poverty guidelines drop for certain family sizes due to these adjustments. This occurred in 2016, when the change in the CPI-U between 2014 and 2015 was small enough so that the rounding and standardizing adjustments in the formula resulted in small decreases in the poverty guidelines between 2015 and 2016 for households with 7 or more members (8 or more for Alaska and Hawaii).  Since a decrease in the poverty guidelines when inflation was not negative would be contrary to congressional intent, a small adjustment was made to the 2016 guideline formula which fixed the 2016 poverty guidelines at the 2015 guidelines for the affected family sizes, which are households of 7 or more (8 or more for Alaska and Hawaii).


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 2015 guideline for a family or 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 or household sizes; these average differences for Alaska and Hawaii are rounded to the nearest multiple of $10.  For families or households with more than 8 persons, add the following amount for each additional person: $4,160 (48 contiguous states and the District of Columbia); $5,200 (Alaska); $4,780 (Hawaii).