poverty level

n.
A minimum income level below which a person is officially considered to lack adequate subsistence and to be living in poverty. Also called poverty line.

View more Business & Finance videos

A level of income above which it is possible to achieve an adequate standard of living and below which it is not. It fluctuates with the cost of living.

Because the poverty level is somewhat artificially established by the government, it can be manipulated for political ends. As with hidden unemployment, governments are often accused of establishing a poverty level that underestimates the number of poor people.

The set minimum amount of income that a family needs for food, clothing, transportation, shelter and other necessities. In the United States, this level is determined by the Department of Health and Human Services. FPL varies according to family size. The number is adjusted for inflation and reported annually in the form of poverty guidelines. Public assistance programs, such as Medicaid in the U.S., define eligibility income limits as some percentage of FPL.

Investopedia Says:
The poverty guidelines are typically issued every February and correspond to the year in which they are issued. For example, the guidelines issued in Feb 2004 are designated as the 2004 poverty guidelines. (In 2004, the FPLs were $15,670, $18,850 and $22,030 for families of three, four and five, respectively.) However, when determining an individual's or a family's eligibility for receiving benefits, some government agencies compare before-tax income to the poverty guidelines, while others compare after-tax income. Likewise, eligibility limits may be based on gross income, net income or some other measure of income. 

Related Links:
Don't assume you're insured. Find out what you can expect from this healthcare program. What Does Medicare Cover?
Despite paying one of the highest minimum wages in the world, the minimum wage is a perpetual hot potato among politicians in the United States. The Minimum Wage: Does It Matter?
These are not equal. Here's why you need to think twice before relying on the government-sponsored program. Medicaid Vs. Long-Term Care Insurance
What causes inflation? How does it affect your investments and standard of living? This tutorial has the answers. All About Inflation

For a list of words related to poverty level, see:

• Economics and Economic Theory - poverty level: poverty line

---