Federal Poverty Level (FPL)

What is the Federal Poverty Level?

Also known as the poverty line, the Federal Poverty Level is an economic measure that helps to comprehend whether an individual’s or a family’s Income level is qualified to avail specific federal programs and advantages.

The FLP is considered as the set minimum income amount that a family would require for shelter, transportation, clothing, food and other necessary items. In a way, this is also called Federal Poverty Guidelines.

Explaining the Federal Poverty Level

Every year, the Census Bureau displays a public report on the property level of property in the country. The report offers an estimate of the financially poor people, a percentage of those living below the poverty line, the level of inequality in income and the poverty distribution by location, ethnicity, sex, age, and other factors.

Thereon, this report is used to set a poverty guideline on who must be eligible to avail federal programs. Typically, the Federal Poverty Level is issued on an annual Basis that uses household size and income to comprehend the poverty level.

The information available in the Annual Report signifies the total cost required by an average person per year to cover his basic needs, such as accommodation, utilities, and food. For the purpose of Inflation, this number gets adjusted every year.

Furthermore, the FPL varies as per the family’s size and the geographical location where they are residing in the country. For instance, those living in a metro city would have a higher poverty level as the cost of living in such a city is higher than Tier II or Tier III cities.

How the income of a family is compared to the FLP helps to determine if they can get any plans. While assessing the family’s or an individual’s eligibility for getting advantages, some agencies may compare the before-tax income to the guidelines of poverty, while others may compare the after-tax income to the same guidelines.

Some federal programs and agencies may have a benchmark percentage multiple of the Federal Poverty Level to signify the limits of income and to set the criteria of eligibility for households and individuals.

However, one thing that should be kept in mind here is that the poverty level is completely different from the poverty threshold. The latter one is another federal poverty measure that signifies what is poverty and offers statistics on a number of people living in poverty.