Since December 1965, there have been two slightly different versions of the federal poverty measure: poverty thresholds and poverty guidelines.
Poverty thresholds are the statistical version of the poverty measure and are issued by the Census Bureau. They are used for calculating the number of persons in poverty in the United States or in states and regions.
Poverty guidelines are the administrative version of the poverty measure and are issued by the Department of Health and Human Services (HHS). They are a simplification of the poverty thresholds and are used in determining financial eligibility for certain federal programs.
A major reason for issuing guidelines distinct from the poverty thresholds is that the thresholds for a particular calendar year are not published in final form until late summer of the following calendar year. If poverty guidelines were not issued, HHS and other agencies would have to use two-year-old data in determining eligibility for programs during the first half of each year.
Both poverty thresholds and poverty guidelines are updated annually for price changes using the Consumer Price Index for All Urban Consumers (CPI-U).
The HHS poverty guidelines are used in setting eligibility criteria for a number of federal programs. Some programs actually use a percentage multiple of the guidelines, such as 125 percent, 150 percent, or 185 percent. This is not the result of a single coherent plan; instead, it stems from decisions made at different times by different congressional committees or federal agencies.
Some examples of federal programs that use the guidelines in determining eligibility are:
In HHS: Community Services Block Grant, Head Start, Low-Income Home Energy Assistance, Children's Health Insurance Program In the Department of Agriculture: Food Stamps, Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), the National School Lunch and School Breakfast programs In the Department of Energy: Weatherization Assistance In the Department of Labor: Job Corps, Senior Community Service Employment Program, National Farmworker Jobs Program In the Legal Services Corporation: Legal services for the poor Certain relatively recent provisions of Medicaid use the poverty guidelines; however, the rest of that program (accounting for roughly three-quarters of Medicaid eligibility determinations) does not use the guidelines.
Major means-tested programs that do NOT use the poverty guidelines in determining eligibility include Temporary Assistance for Needy Families (and its predecessor, Aid to Families with Dependent Children), Supplemental Security Income, the Earned Income Tax Credit program, the Department of Housing and Urban Development's means-tested housing assistance programs, and the Social Services Block Grant.
Some state and local governments have chosen to use the federal poverty guidelines in some of their own programs and activities. Examples include state health insurance programs, financial guidelines for child support enforcement, and determination of legal indigence for court purposes. Some private companies such as utilities, telephone companies, and pharmaceutical companies have also adopted the guidelines in setting eligibility for their services to low-income persons. Note: The most recent IRP research on the poverty measure can be found by searching the IRP site from the home page.
Information taken from the IRP website, found here
