Many experts agree that the federal poverty measures are outdated and underestimate the amount of money a family must to earn to take care of all of its basic needs. The current federal poverty measures do not accurately count family resources because income before taxes is the only resource accounted for and it does not include taxes paid, tax credits received (such as the Earned Income Tax Credit) or non-cash transfer programs like food stamps when determining if a family lives in poverty.

The U.S. Census Bureau recently announced the development of a supplemental poverty measure in March 2010 that will better demonstrate the struggles of working families in terms of meeting their basic needs. This new measure will use recommendations from the National Academy of Sciences, including:

• Recognizing the portion of a family’s income that is not available to pay for basic necessities because it is being used for paying taxes, meeting child support obligations, or paying out-of-pocket or work-related medical expenses.
• Counting income from housing vouchers, tax credits, and other work supports that a family is receiving that helps them meet their needs.
• Making adjustments for different geographic locations throughout the country.

The supplemental measure can promote better government policies in three ways:

• We will have a better picture of what expenses make up a family’s budget and how they are handling these expenses. In turn, government will be better equipped to make policies that address the current recession and help more families reach self-sufficiency.
• We will learn more about how current antipoverty programs are helping American families.
• With a better understanding of the American family’s budget, future policies can be better targeted and therefore more successful.

The first data for this measure will be released in 2011 at the same time as the traditional poverty data. Even though this data will be informative it will not replace the current federal poverty guidelines in determining a family’s eligibility for government programs.