California government agencies and other entities use two primary sets of low-income guidelines -- the federal poverty line and the Department of Housing and Urban Development's (HUD's) income limits. While more programs employ the poverty line to restrict access to need-based programs, HUD's income data is more precise, largely because it takes local income differences into account.
Purpose
Governments and other organizations need a system to ensure that the neediest residents receive assistance. As is the case in most places, most programs in California rely on income to control the distribution of benefits. Income guidelines allow California government agencies, nonprofits and other groups to restrict access to need-based initiatives such as subsidized housing and social welfare schemes.
Types
California entities typically use the federal poverty line or HUD's income limits to determine who is low-income for the purpose of program eligibility. Each year, the U.S. Department of Health and Human Services (HHS) and the Census Bureau release federal poverty line statistics. The main difference between the two, according to the HHS website, is that the Census publishes three sets of poverty line numbers -- one for Alaska, one for Hawaii and one for the rest of the U.S. -- while HHS uses just one set for the entire nation. HUD's income limits take location into account, often with greater precision. However, they are generally only used to regulate entry into low-income housing programs.
Discussion
Whether a person or family lives in California's Central Valley or in relatively more affluent and expensive places such as San Francisco and Los Angeles, the federal poverty line does not budge. It is a static number from a location standpoint, although it does adjust for household size. HUD calculates its income limits on the basis of median incomes for counties and metropolitan areas across the country, allowing it to more readily take into account the impact of place on cost of living.
Function
As noted, California organizations tend to use HUD's income limits for housing programs, which are often key services for low-income families. While the HUD-funded Section 8 and public housing programs use the agency's income data, most other subsidized programs, including ones outside of HUD's purview, rely on them as well. Federally funded programs administered by agencies throughout California, such as Head Start and the National School Lunch Program, use the federal poverty line to determine eligibility.
Geography
Regardless of where a person lives in California, the poverty line is $10,830 for a single person, based on 2010 HHS figures. HHS tacks an additional $3,740 on to that number for each additional family member, making the federal poverty line $22,050 for a family of four. To compensate for these fixed numbers, programs often accept applications from families with incomes that are at higher than the poverty line, such as 125 or 150 percent of the poverty line.
HUD's income limits are not so rigid. HUD uses three main income categories, all based on the percentage of their area's median income a household earns. Under HUD's system, "low-income" families have household incomes at or below 80 percent of their area's median, "very low-income" families are at or below 50 percent of their area's median and "extremely low-income" families come in at or below 30 percent of their area's median. For example, HUD considers a family of four with household income of $46,450 living in Orange County, California "very low-income." In relatively less affluent Bakersfield, this number drops to $28,150.
Tags: poverty line, federal poverty, federal poverty line, income limits, area median