Differences were allowed for size of family, gender of the head of the household, and whether it was a farm or nonfarm family. The threshold (the level at which poverty begins) for a farm family was set at 70 percent of a nonfarm household. (The difference between farm and nonfarm households was eliminated in 1982.)
Poverty Thresholds
The poverty guidelines set by the U.S. Department of Health and Human Services (HHS) are based on the poverty thresholds as established by the U.S. Bureau of the Census. The poverty thresholds, used for statistical purposes, are updated each year to reflect inflation. People with incomes below the applicable threshold are classified as living below the poverty level.
The poverty guidelines vary by family size and composition. For a family of four in 2004 the poverty guideline was $18,850 in annual income. A person living alone who earned less than $9,310 was considered poor, as was a family of eight members making less than $31,570. Notice, in Table 3.1, that the poverty level is considerably higher in Alaska and Hawaii, where the cost of living is higher than in the contiguous forty-eight states and the District of Columbia.
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