“Actual” income is inaccurate measure

May 4, 2011 § Leave a comment

The Federal Poverty Guidelines are based on “actual income.”  American Heritage Dictionary defines “actual” as: existing in fact or reality. So isn’t actual income the income I actually have in my hand each month?  Isn’t that what matters?  My creditors don’t want the money I made they want the money I have. 

But the federal poverty guideline is based on income before payroll deductions. The 2011 poverty guideline  for an individual is $10,890. At the poverty level I would actually have in my hand 10890 less approx. 15% payroll deductions or $9257 annually and $771 each month. Can we agree that it’s impossible to find an apartment and eat on this money? Certainly we can agree that it’s hard to imagine finding an apt, gassing up a car, paying for a phone and eating on this money. This isn’t poor this is impossible. Yet helping agencies measure need by the federal poverty guidelines and your “actual” income.

UCLA Center for Health Policy Research writes, “both singles and couples age 65 or older who rent need more than twice the amount established by the Federal Poverty Level (FPL) Guideline to meet basic living expenses.”  If the intention of a poverty guideline is to describe basic need then we need measuring tools that capture actual circumstance.  By the time someone reaches the poverty level they’ve long since gone hungry or lost their apartment.  Let’s focus our guidelines on catching people before they fall into poverty rather than debating about whether we’re giving a “hand out” or a “hand up” from it’s depths.

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