Measuring Poverty A New Approach (1995) / Chapter Skim
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7 USE OF THE POVERTY MEASURE IN GOVERNMENT ASSISTANCE PROGRAMS
7 USE OF THE POVERTY MEASURE IN GOVERNMENT ASSISTANCE PROGRAMS
Pages 317-334
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From page 317... ...
The share of poor people is also one factor in the formula for allocating Community Development [Block Grant funds to cities and counties. In this chapter we consider the relationship of a poverty measure to eligibility and benefit standards for government means-tested programs that ~ The poverty guidelines are issued annually by the U.S.
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From page 318... ...
We believe that the proposed measure also deserves serious consideration for use as an income eligibility standard in government assistance programs that currently determine eligibility or benefit amounts by comparing family resources to the poverty guidelines derived from the official thresholds. However, we do not flatly recommend that the proposed measure be adopted in place of the current measure for program use.
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From page 319... ...
The proposed poverty measure embodies a definition of family resources as money and near-money disposable income that is consistent with the derivation of the poverty thresholds from expenditure data for such basic needs as food, clothing, and shelter. However, the proposed definition is considerably more demanding of data than the current definition: full implementation would require asking about in-kind benefits and several types of expenses as well as money income.
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From page 320... ...
The other 13 programs, which account for 56 percent of expenditures by all assistance programs, have several ways of determining income eligibility. For example, School Lunch and School Breakfast accord eligibility to children whose families already participate in AFDC or food stamps, and they also permit other 3 Assistance programs typically have other requirements for eligibility besides a comparison of income with a need standard: for example, they may provide benefits only to people in certain age categories or have a limit on assets in addition to income or have other restrictions or requirements.
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From page 321... ...
Programs authorized by the Job Training Partnership Act (e.g., Job Corps and Summer Youth Employment) accord eligibility to people already participating in AFDC or food stamps and permit other people to qualify on the basis of comparing their family income to 100 percent of the poverty guidelines or 70 percent of the lower living standard income level determined by the Department of Labor, whichever amount is higher.
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From page 322... ...
Summer Food Service Program for Children Summer Youth Employment Programa 100 Training for Disadvantaged Adults and Youtha 100 Vocational Education Opportunities, 100 Disadvantaged Activitiesa Weatherization Assistancea Programs That Relate Benefits to Income or Charge for Services on a Sliding Scale Child and Adult Care Food Program Community Health Centers Food Stamp Programing Low-Income Home Energy Assistance Program (LIHEAP) a Maternal and Child Health Services Block Grant Migrant Health Centers School Breakfast Programing School Lunch Programed Title X Family Planning Services Poverty Cutoff for Eligibility (%)
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From page 323... ...
The 27 programs that link eligibility for some or all applicants to the poverty thresholds or guidelines differ on a number of dimensions. These, in turn, have implications for using the proposed poverty measure for eligibility determination.
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From page 324... ...
Determining Income Eligibility: Selected Programs To determine how families' incomes are estimated for comparison with the poverty guidelines, we examined application procedures for selected programs.4 In many cases for example, for Community Health Centers and Title X Family Planning Services5 local centers or agencies have a good deal of discretion in how they determine income eligibility. In other cases, such as food stamps, federal regulations are very specific about the definitions and procedures used.
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From page 325... ...
Federal law excludes various benefits from the calculation of income, such as food stamps and educational assistance received under means-tested programs (e.g., Pell Grants) ; and negative selfemployment income is set to zero; otherwise, the definition of income is much the same as the gross money income definition used in the March Current Population Survey for the official poverty statistics.
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From page 326... ...
. Food Stamps Households that receive AFDC or SSI, and so have already been through an eligibility determination process, are generally automatically eligible for food stamps.
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From page 327... ...
In effect, the Food Stamp Program expects that households will spend 30 percent of their net countable income on food, or roughly the amount that food represents of the official poverty thresholds (as originally developed) ; the program supplements families' food-consumption resources up to the level of the Thrifty Food Plan.
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From page 328... ...
The use of poverty thresholds that are adjusted for geographic differences in the cost of housing raises some special issues for the Food Stamp Program. The use of such thresholds for eligibility determination should, as just noted, represent an improved targeting of program benefits.~° For benefit determination, however, the assumption that households spend 30 percent of their income on food would need to be reexamined otherwise, newly eligible households in more expensive areas would not, in fact, benefit from the program.
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From page 329... ...
Another option would be to use the proposed equivalence scale and geographic adjustments for housing costs but continue to update the initial threshold simply for price changes. This option is less attractive because it implies the continuance of two different poverty measures.
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From page 330... ...
However, programs that at present obtain a fairly crude and hence less burdensome measure of gross money income probably already experience some classification errors. A simplified determination of disposable income might work as follows, by taking the School Lunch and School Breakfast Programs as examples.
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From page 331... ...
An alternative approach would be to develop a "menu" of poverty thresholds for different types of families such as working families with and without child care expenses and with and without health insurance coverage that are appropriate to compare with a gross money income definition of family resources. For example, the threshold for a working family of two adults and 12 However, programs that rely solely on comparing income with the poverty guidelines to determine eligibility and do not accord automatic eligibility to welfare families would need to ask about food stamps and, perhaps, other sources of in-kind income.
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From page 332... ...
The definition of net family income that is used in many of these programs is similar in broad outline, if not in specific details, to the proposed definition of family resources for the poverty measure. Hence, such programs as food stamps or AFDC would not find it difficult to use the proposed disposable income definition, although they should still consider the particulars of the definition and their appropriateness for program use.
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From page 333... ...
With regard to the assistance unit, programs differ in their target populations and hence often differ in their definition of an eligible unit for example, the Food Stamp Program generally defines eligible units to be the entire household, whereas AFDC generally defines eligible units to be families consisting of dependent children and their parents-a narrower definition of family than that used by the Census Bureau. These differences from the proposed statistical poverty measure are certainly appropriate in light of pro .
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