Two households with similar cash earnings can have different resources after taxes, rent, medical bills and assistance are considered. That is one reason the U.S. Census Bureau publishes both the official poverty measure and the Supplemental Poverty Measure, or SPM. They apply different definitions of family resources and poverty thresholds, so their results answer related but distinct questions. Understanding those choices helps readers interpret a poverty figure without treating either measure as a complete account of every household’s circumstances. U.S. Census Bureau
What the official measure counts
The official poverty measure compares a family’s pretax cash income with a threshold that varies by family size and composition, including the ages of family members. If the family’s total income falls below that threshold, it is counted as living in poverty. Unrelated individuals are measured separately. U.S. Census Bureau
The measure does not add the value of noncash benefits such as nutrition assistance or subsidized housing, and it does not subtract taxes or expenses such as medical costs. Census describes money income as income received regularly before taxes and other deductions; it excludes noncash benefits. The official measure therefore focuses on cash income before taxes, rather than the resources left after household costs and assistance. U.S. Census Bureau U.S. Census Bureau
How the SPM changes the calculation
The SPM starts with cash income, then adds qualifying noncash benefits available to help meet basic needs. Examples include nutrition assistance, subsidized housing, and energy or broadband assistance. It also accounts for tax credits by adding them to resources, while subtracting taxes, work expenses, medical expenses, and child support paid to another household. U.S. Census Bureau
Its resource units can include people the official measure’s family definition leaves out, such as co-resident unmarried partners and their relatives, foster children, and unrelated children. This means the SPM can reflect resources shared among people living together, while the official measure generally groups relatives by birth, marriage, or adoption. U.S. Census Bureau
Thresholds reflect different assumptions
The official threshold traces back to the cost of a minimum food diet in 1963, multiplied by three, and is updated for inflation. It varies with family size, composition, and the age of the householder. It does not adjust for regional differences in housing costs. U.S. Census Bureau
The SPM threshold is based on recent spending on food, clothing, shelter, utilities, telephone, and internet. It varies by family size, composition, and housing tenure, and includes geographic adjustments for housing costs. Those different threshold rules can change whether a resource total falls above or below the relevant line. The Census Bureau says SPM thresholds are not intended to determine eligibility for government assistance or funding distribution. U.S. Census Bureau
Why the two results can diverge
Consider a clearly hypothetical household whose pretax cash income is below the official threshold. If it receives nutrition assistance and a tax credit, the SPM counts those resources; if it also pays taxes, child care costs related to work, and medical expenses, the SPM subtracts applicable expenses. Its SPM resource total could end up above or below the SPM threshold, depending on the amounts and household details. This example illustrates the mechanics only; it does not establish actual eligibility or describe any real household. U.S. Census Bureau
A difference between measures is not a contradiction: each applies a distinct definition of resources and a distinct threshold. The official measure offers a consistent cash-income comparison, while the SPM offers a broader accounting of selected benefits, taxes, expenses, household relationships, and housing costs. Readers comparing published estimates should check which measure and survey produced them, rather than treating the figures as interchangeable. U.S. Census Bureau U.S. Census Bureau
Sources & further reading
- Poverty ↗U.S. Census Bureau
- Supplemental and official poverty measures compared ↗U.S. Census Bureau
- Income in the United States ↗U.S. Census Bureau
