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The Supplemental Poverty Measure (SPM) is an alternative measure of poverty, developed and reported by the U.S. Census Bureau, that is intended to provide a more thorough and accurate assessment of how much income a household needs to get by. The SPM differs from the official poverty measure in two ways:
(1) Poverty Threshold: Whereas the official poverty measure was set in 1965 at three times the subsistence food budget and has only been adjusted for inflation since then, the SPM is set at the 33rd percentile of expenditures on food, clothing, shelter, and utilities (FCSU) of consumer units with exactly two children multiplied by 1.2. The thresholds are adjusted based on both family size and differences in regions’ housing costs.
(2) Income Measurement: The income measure for the SPM includes all cash income from whatever source, like the official measure’s, but also includes non-cash benefits like food stamps, subsidized school lunches, housing assistance, and so forth. It then takes taxes (including both payroll taxes and refundable credits) into account, and subtracts out necessary expenses like work-related costs, child care, child support, and out-of-pocket medical expenses.
Comparing the poverty rates under the official poverty measures and the SPM reveals the effect that government transfer programs and taxes have on keeping households above or below the poverty level.
The US Census Bureau releases an annual report on poverty; since 2022, a single report incorporates both the official and supplemental poverty measures. The SPM rate for 2023 was 12.9 percent, which was 1.8 percentage points higher than the official poverty rate of 11.1 percent. After declining for several straight years, the SPM has soared to 12.9 percent in 2023 from 7.8 percent in 2021, due primarily to the expiration of the expanded child tax credit and other anti-poverty provisions that were part of the American Recovery Plan Act of 2021.
