Isabella Carter
The definition of low income can vary depending on household size, location, and the age of family members. In the US, a commonly used definition of low income is the federal poverty level established by the government. The Department of Health and Human Services (HHS) calculates poverty guidelines, which are used to determine eligibility for various assistance programs. These guidelines are adjusted annually for inflation. In 2025, the federal poverty level for a family of four was $32,150 per year. However, this threshold can vary across federal, state, and local agencies, with some programs using multipliers of 125%, 150%, or 185% of the federal poverty level. Additionally, factors such as area cost-of-living indices and median incomes can also influence the definition of low income.
| Characteristics | Values |
|---|---|
| Federal guideline definition of low income for a family of four | $32,150 per year |
| Low-income limit for a family of four in San Francisco | $105,350 |
| Low-income limit for a family of four in New York, Los Angeles, Boston, and Washington, DC | $70,000 |
| Household income below 125% of poverty level for a family of four | $34,500 |
| Generally considered low income | 50% or less of the area median income |
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What You'll Learn
Federal poverty level
The federal poverty level (FPL) is a guideline that defines the minimum amount of annual income that an individual or family requires to pay for essentials such as housing, utilities, clothing, food, and transportation. The FPL is based on the size of a household and the state in which one resides. In 2025, the FPL for an individual is $15,650 annually, while for a family of four, it is $32,150. These guidelines are adjusted each year for inflation.
The FPL is used to determine eligibility for various assistance programs, including federal, nonprofit, and private company programs. For example, the Children's Health Insurance Program, Parts of Medicaid, and Parts of Medicare all use the FPL to determine eligibility. Additionally, the FPL is used by the Department of Housing and Urban Development to determine eligibility for assisted housing programs such as Section 8.
It is important to note that the FPL is not the same as the federal poverty threshold, which is determined by the U.S. Census Bureau and provides statistics on the number of Americans living in poverty. The poverty threshold is the original version of the federal poverty measure and is used mainly for statistical purposes. On the other hand, the FPL is a simplified version of the poverty threshold and is used for administrative purposes, such as determining eligibility for federal programs.
While the FPL is the same in 48 states, Alaska and Hawaii have higher FPLs due to their higher cost of living. Additionally, the HOME program, which provides assisted housing, calculates income limits based on either the FPL or 30% of the area median income, whichever is higher. This calculation method ensures that low-income families do not exceed the income limit for eligibility.
The FPL guidelines are issued annually by the Department of Health and Human Services (HHS) in the Federal Register. These guidelines are updated each year, generally in mid-to-late January, and are based on changes in the Consumer Price Index. While the FPL is a useful tool for determining eligibility for assistance programs, it is important to note that it may not capture all aspects of financial need, as the cost of living can vary significantly across different areas.
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Household size
The definition of "low income" can also vary depending on the specific location and the cost of living in that area. For example, in San Francisco, a family of four with an income of $105,000 would be considered low income due to the high cost of living in that city. On the other hand, a similar family in a less expensive area with an income of $38,000 would also be eligible for government housing assistance.
The Department of Housing and Urban Development (HUD) also plays a role in determining eligibility for assisted housing programs. They calculate income limits for programs like Section 8 based on a percentage of the median income for a particular area. These limits are adjusted based on family size, and HUD provides income limit values for households of different sizes.
The HOME program, administered by HUD, also has income limits for eligibility. These limits are calculated using the same methodology as Section 8 but with some variations. The Extremely Low-Income Family (ELI) limit for the HOME program is defined as 30 percent of the median family income for the area, which may differ from the Section 8 ELI limit. For families larger than eight people, the income limit is calculated by adding 8% of the four-person income limit for each additional family member.
When determining low and moderate-income levels, the city of Inglewood, CA, considers a household to be low income if it earns 50% or less of the area median income and moderate income if it earns 80% of the area median income. This takes into account the area's cost-of-living indices.
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Cost-of-living indices
The definition of "low income" can vary depending on household size, location, and the age of family members. A commonly used definition of low income in the U.S. is the federal poverty level established by the government. The Department of Health and Human Services calculates poverty guidelines, which are used to determine eligibility for assistance programs. For 2025, the federal poverty guideline for a family of four is an annual income of $32,150.
Housing is typically the most significant expense for consumers and is considered a necessity. Other basic necessities include food and taxes. Transportation costs are also included in cost-of-living calculations, as they are necessary for commuting and travelling within a region.
Healthcare is another significant expense, accounting for about 8% of a consumer's annual budget. Childcare, education, and utilities are additional necessities that contribute to the overall cost of living. Utilities refer to essential services such as water and sewer services, which are included in cost-of-living indices.
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Income limits
The definition of "low income" can vary depending on household size, location, and the age of family members. In the US, a commonly used definition of low income is the federal poverty level established by the government. The Department of Health and Human Services calculates poverty guidelines, which are used to determine eligibility for various assistance programs. These guidelines are adjusted annually for inflation.
For 2025, the federal poverty level for a family of four is $32,150 per year. This is a widely used guideline, and many assistance programs use these poverty guidelines as a basis for eligibility.
However, the Department of Housing and Urban Development (HUD) determines eligibility for assisted housing programs, such as Section 8, differently. They calculate a percentage of the median income for a particular area to determine eligibility. The income limits for the HOME program are based on HUD estimates of median family income, adjusted for family size. These limits are updated periodically, with the 2024 limits currently in effect until June 1, 2025.
In some cities, income limits for low-income status can be relatively high due to higher median incomes. For example, in San Francisco, the low-income limit for a family of four is $105,000, which qualifies them for government housing assistance. This demonstrates how area cost-of-living indices can significantly impact the definition of low income.
Additionally, the tax credit for low- to moderate-income working individuals and families, known as the earned income tax credit (EITC), does not use the federal poverty level guidelines. Instead, the IRS has its own eligibility tool for determining EITC qualification.
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Eligibility for assistance programs
In the US, a widely used federal guideline defines low income as $32,150 per year for a family of four in 2025. This guideline is adjusted each year for inflation. The Department of Health and Human Services calculates poverty guidelines, which are used to determine eligibility for assistance programs.
There are various assistance programs available for low-income families to help with the costs of food, education, housing, and more. These programs are provided by nonprofit organizations, private companies, and organizations, and specific federal programs. Here are some examples of eligibility for assistance programs:
- Supplemental Nutrition Assistance Program (SNAP): SNAP assists eligible low-income individuals and families with purchasing food. Eligibility is based on income and household size.
- Children's Health Insurance Program (CHIP): CHIP provides health insurance coverage for children in low-income families. Eligibility is typically based on income and family size, and it varies by state.
- Medicaid and Medicare: These programs provide health care coverage for low-income individuals and families. Eligibility is based on income, household size, and other factors.
- Housing Assistance: The Department of Housing and Urban Development (HUD) offers assisted housing programs such as Section 8, which provides rental assistance. Eligibility is determined by calculating a percentage of the median income for a particular area.
- Low-Income Home Energy Assistance Program (LIHEAP): This program helps eligible low-income households with heating and cooling bills. Eligibility is based on factors such as location, energy needs, household size, and income.
- Head Start and Early Head Start: These programs provide early childhood education, health, and nutrition services to low-income children and their families. Eligibility is typically based on income, and families at or below the current poverty level qualify.
These are just a few examples of assistance programs available to low-income families. Each program has its own specific eligibility requirements, and it is recommended to check with the relevant organizations or government agencies to determine eligibility and apply for assistance.
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Frequently asked questions
A commonly used definition of low income in the US is the government-established federal poverty level. In 2025, the federal poverty guideline defined low income for a family of four as an annual income of $32,150.
The Department of Health and Human Services calculates the poverty guidelines, which are adjusted each year for inflation. The baseline federal poverty level for 2025 is $15,650 for a single-person household, with $16,550 added for each additional person in the household.
Yes, the threshold for low-income benefits can depend on the federal, state, or local government agency or advocacy organization. Some federal programs use the HHS guidelines with a multiplier, such as 125%, 150%, or 185%, to set eligibility. Additionally, low income can be defined as 80% of the median income for an area, with moderate income defined as 80%, and very low income defined as 50% or less.
