What is the FPL (Federal Poverty Level)?
Individuals and families are assessed for federal benefits and programs based on their income level and the national poverty level (FPL). Every year, the Department of Health and Human Services (HHS) updates its poverty criteria to show the minimal income a family requires for food, clothes, transportation, shelter, and other basics, adjusted for inflation.
The FPL—short for poverty line—is not the poverty threshold. This level is another crucial federal poverty metric. The poverty threshold is mainly used for statistics and poverty standards.
Federal poverty level understanding
The U.S. Census Bureau publishes an annual poverty report. The study estimates the number of poor people, the proportion living in poverty, poverty distribution by age, sex, ethnicity, geography, etc., and income inequality.
HHS issues the FPL annually in January based on household income and size. The HHS reports the average yearly cost of food, utilities, and housing in its annual report. These numbers are adjusted annually for inflation.
FPL determines eligibility for government subsidies and help, such as:
- Medicaid
- Supplemental Nutrition Assistance Program (SNAP)—food stamps
- Family and Planning Services
- Child Health Insurance Program
- National School Lunch Program
In 2022 and 2023, what is poverty income?
The federal poverty threshold depends on family size and geography. Alaska and Hawaii have excellent poverty rates due to higher living costs.
With each family member, the poverty threshold rises:
- Contiguous U.S.: $4,720 per family in 2022 and $5,140 in 2023.
- Alaska: $5,900 2022, $6,430 2023
- Hawaii: $5,430 2022, $5,910 2023
Thus, in any state except Hawaii and Alaska, a family of three would have a poverty level of $23,030, as the 2022 FPL for a family of two is $18,310.
FPL vs. Poverty Threshold
Because of their differences, the FPL and poverty threshold should not be confused. The poverty threshold is another significant government metric that defines poverty and reports the number of Americans living there.
The U.S. Census Bureau calculates poverty using pre-tax income. The HHS estimates the FPL from the poverty threshold data report.
Welfare Program FPL Requirements
Family income relative to the FPL determines plan eligibility. Some government organizations evaluate before-tax income to poverty criteria, whereas others compare after-tax income.
Certain government agencies and programs determine income restrictions and household eligibility using percentage multiples of the FPL. Medicaid and CHIP are available to anybody earning less than 138% of the FPL. In 2022, a one-household in Texas must earn less than 138% x $13,590 = $18,754.20 to qualify for Medicaid.
However, the Emergency Shelter Grant ESG, Utility Assistance, and United Way Rent require households to earn less than 150% of the FPL. Premium tax credits for health insurance marketplace plans, which lower monthly premiums, are available to those between 100% and 400% of FPL.
Divide income by the poverty criterion and multiply by 100 to determine the poverty percentage. A New Jersey family of five earning $80,000 would reach 246% of the federal poverty guidelines 2022, which means they will not qualify for utility assistance or Medicaid but may be eligible for an advanced premium tax credit subsidy.
Conclusion
- A household can get welfare assistance if their annualized income is below the federal poverty line.
- This is the minimal family income needed for food, clothes, transportation, shelter, and other needs.
- After inflation, the Department of Health and Human Services publishes the FPL annually.
- Federal and state assistance programs like housing vouchers, Medicaid, and CHIP use the FPL.
- The FPL differs from the poverty threshold, which defines poverty and reports its prevalence in the U.S.
