Low Income Definition, Guidelines and Assistance

According to the dictionary, a low income is considered a deprivation in well-being, a scarcity of work money which will eventually lead to poverty. In the latest years, low income has become a problem for the majority of the population. With taxes increasing at every drop of a stick, it’s becoming more and more difficult to put food on the table. Even the basic goods become a luxury and the problem only seems to be worsening by the minute. According to a study conducted by the US Census Bureau, more than 13% of the American population is below the average of the FPL (Federal Poverty Level). They are mainly working families that are struggling to keep themselves on a decent life level, having an income that is just less than twice the average FPL.

What is considered to be low income?
Low income affects every person differently depending on their lifestyle. Guidelines have been created to identify which person or family is considered low income and lives under the poverty line.

As a matter fact, having a low income means a struggle or an inability to keep up with your taxes. Almost half of the American population is low income, and only two-thirds of them are earning just enough so that they don’t fall under the poverty line. A huge factor which can affect your low income is based on how many people are living in your household.

• For instance, if you live alone and your earnings only reach an average of $11,490 a year, then you are considered low-income.
• However, if you live in a family of four people (parents and children) and your earnings only reach an average of $23,550, then you once more find yourself at the low-income limit.

A low-income person can earn only about 199% of the poverty level. For example, if you are an individual that lives alone, the federal government will only consider you a low-income earner provided that your earnings are somewhere in-between $11,490 and $22,865.10.

If, on the other hand, you live together with your family (the average being four individuals), you will be considered at a low income only if you do not go over the maximum limit of $46,864.50.

However, you will need to know that these boundaries to the income do not account for the taxes which will be subtracted. You may have earnings of about $22,865.10, but the amount you take home may be 25% less, depending on how much they withhold from your paycheck.

 
What is a poverty rate?
The poverty rate is considered to be the ratio based on the number of people pertaining to a certain age group who fall below the poverty line, even lower than the low-income status. It differs from country to country, each setting a particular limit based on the economy; however, if there are two countries that have a similar poverty rate, the difference can be made when comparing the relative income status of the poor.

U.S. determines its official incidence of poverty through the use of poverty thresholds issued by the Census Bureau every year.

Info: A threshold is defined as the minimum annual income amount in cash that is necessary to support a family, regardless of the size.
The methods of calculating the poverty threshold have remained the same since it was first established in the mid-'60s, and it is updated every year in order to keep up with the inflation. A family is considered to be poor when their pretax money goes below this poverty threshold. At the same time, the income a person receives does not include other benefits such as the public housing, medical care, food stamps or health insurance.

Poverty rates also seem to be considerably varied between ethnic or racial subgroups. For example, the poverty rates for Hispanics and black people go way below the national average.

• Surveys conducted in the past years have shown that almost 27% of the Hispanic folks were poor while around 27.4% of the black individuals were experiencing the same fate.
• In contrast to them, only 9.9% of the non-Hispanic white people and 12.1% of the Asian population residing in America had found themselves within the poverty rate.

In the case of a family whose head is a female figure (especially black or Hispanic), the poverty rate once more starts to go up. As a general rule, it has been revealed that around 31.6% of the households led by single mothers were poor, as opposed to the almost 16% of households which are led by single fathers. When it comes to married couples living in poverty, 6.2% of them find themselves within the poverty rate.

How many families in the US are low-income?
A study published in Columbia University's Mailman School of Public Health in 2015 has revealed that out of 10 American children, about 4 of them are part of a low-income family. That means that nearly half of the population struggles to live with a low income and risks falling under the poverty line.  It was also discovered that an average of 44% of minors lived in families that have a low income while 22% of them are part of a poor family.

The number of underage children has remained the same in the US (only changing up to a little as almost 1%). However, a change is visible in the fact that there are 13% more children part of a low-income family while a full 23% (almost three million children) are part of a poor family.

Education is also no longer of the essence when it comes to the income a family receives. It has been discovered that while most of the poor children have parents who have graduated from a college of sorts, there is still a 41% gap formed of people who have gone under the poverty limit.

It has also been discovered that families who have children under the age of 3 are more likely to be low-income compared to the families who have kids aging from 12 to 17. According to the Census, almost 146.4 millions of U.S. citizens are on a low income.

 
What does it mean to be under the poverty line?
In about 48 states, the poverty line is different based on how many members a family has. On average, According to the Department of Health and Human Services, the poverty line would look something like this:

• A single person: $10,890
• Family of two: $14,710
• Family of three: $18,530
• Family of four: $22,350

On average, the minimum wage in the U.S. is $7.25. So, if a person works 40 hours every week without taking any vacations and not counting the taxes which have to be paid every year (about $1,655), a worker would take home an average of $13,425 a year. A married couple with a minimum wage would have to pay a joint tax of about $3,674, which would only allow a final income of $26,480 every year.

So it would seem that a family of four would be able to maintain themselves above the poverty line. If, however, one parent loses their job or a single parent is raising two underage children, they would still fall under the poverty line.

While many cities offer jobs for the unemployed, most of them are low-paid and do not manage to get them out from under the poverty line. As a result, many people struggle with paying for air conditioning, cable TV or the simple act of putting food on the table. Their standards of life differ greatly from the lives of the average citizens as they find themselves at a loss to meet even their most basic needs.

What help is available for low-income people/families?
There are many programs created to help low income individuals and families. Some federal programs provide grants and funds to states so that they can provide financial assistance and support across numerous needs such as childcare assistance, work assistance and job preparations.

• The U.S. Department of Health and Human Services has the Temporary Assistance for Needy Families program that offers these exact It’s provided to families with a child on the way or responsible for a 19-year-old child and which are low-income/under-employed.

Other communities and programs also offer help for low-income families who want to buy a home or find insurance, as well as for those who want to start their own business. Learn more about different loans, grants and benefits here.

 
Crisis loans have also been created for families who are going through difficult times needing emergency cash or have urgent taxes to pay. All of them have been set up so that people with a low income can get assistance with critical living needs. Additional assistance can come from some of the following organizations:

• Community Action Agencies
• Churches
• Charities (Local & National)
• Free Financial Counselors

Poverty is by no means easy, but the government and many non-government organizations are trying to alleviate income gaps and provide assistance where they can.