One U.S. poverty rate fell. The other did not. Both can be right.
The official measure tracks pretax cash income, while a second federal measure also accounts for benefits, taxes, necessary expenses and differences in housing costs.
A higher health-insurance premium can tighten a household’s budget without directly changing its status under the official U.S. poverty measure. Under the Supplemental Poverty Measure, however, that expense can affect the calculation.
That difference helps explain two apparently conflicting headlines from 2025. The official poverty rate fell by 0.5 percentage points to 10.2%, representing 34.5 million people. The Supplemental Poverty Measure, or SPM, was higher at 13.1% and was not statistically different from its 2024 level, according to the Census Bureau’s annual report.
Neither result is a complete household balance sheet. They are survey estimates, based on the Current Population Survey Annual Social and Economic Supplement, and are subject to sampling and nonsampling error. More fundamentally, the measures count different resources and costs.
Two ledgers for the same economy
| Question | Official poverty measure | Supplemental Poverty Measure |
|---|---|---|
| What resources count? | Pretax cash income | Cash income plus qualifying noncash benefits and tax credits |
| What expenses are deducted? | None of the major expenses included in the SPM calculation | Taxes, work and child-care costs, child support paid to another household, medical spending and health-insurance premiums |
| Does location affect the threshold? | No geographic adjustment | Thresholds reflect geographic differences in housing costs |
| Does renting or owning matter? | Not in the threshold | Thresholds vary for renters, owners with mortgages and owners without mortgages |
The official measure compares pretax cash income with a national threshold that varies by family size, composition and the age of the householder. Its design traces back to three times the cost of a minimum food diet in 1963, with the thresholds subsequently updated for inflation.
The SPM asks a broader question: what resources remain available for basic needs after selected unavoidable expenses? Its thresholds are based on recent spending for food, clothing, shelter, utilities, telephone and internet service. It adds benefits that can help pay for necessities, accounts for taxes paid and refundable tax credits, and subtracts costs such as work expenses and medical care. The Census Bureau provides a side-by-side explanation of the two measures.
Housing requires a careful distinction. The SPM does not simply subtract each household’s rent or mortgage payment. Instead, its poverty threshold changes according to whether a household rents, owns with a mortgage or owns without one, and it is adjusted for geographic differences in housing costs. Census publishes separate 2025 threshold tables for housing tenure and metropolitan areas.
One program can appear differently in the ledgers
Social Security illustrates why the accounting choices matter. Its payments are cash income, so they enter both measures. In the SPM calculation for the entire U.S. population—not a particular age group—Social Security moved an estimated 28.8 million people out of poverty in 2025. Census identified it as the largest antipoverty program measured in that analysis.
That figure is a modeled comparison of the SPM with and without Social Security. It should not be treated as an age-specific finding, and it does not mean every recipient moved above the threshold. Other parts of the SPM ledger, including medical expenses, taxes, credits and noncash assistance, are calculated separately.
A four-question check for poverty headlines
When two poverty figures seem to disagree, ask:
- Does the measure count noncash help such as nutrition or housing assistance?
- Does it include both taxes paid and refundable tax credits?
- Does it deduct medical, child-care and other work-related expenses?
- Does its threshold change with housing tenure and local housing costs?
Mostly “no” answers describe the official measure. “Yes” answers point toward the SPM. This checklist helps identify what a statistic captures; it cannot determine a household’s legal eligibility for assistance. Census says SPM thresholds are not intended for program eligibility or funding distribution.
The SPM is also revised as its methods improve. After errors were found in historical threshold calculations, Census corrected estimates for 2019 through 2024. The changes lowered overall SPM rates for 2019–2023 by 0.1 to 0.3 percentage points and revised the 2024 estimate from 12.9% to 13.0%. The agency concluded that the corrected series did not meaningfully change the trend.
The useful reading of the 2025 results is therefore not that one number disproves the other. The official rate shows what happened under a long-running cash-income definition. The SPM shows what happened after a wider set of benefits, taxes, necessary expenses and housing-cost differences entered the ledger.
Two ways the Census Bureau tests for poverty
The official measure compares pretax cash income with a national threshold based on family composition. The Supplemental Poverty Measure adds qualifying noncash benefits and tax credits, subtracts specified taxes and necessary expenses, and uses thresholds adjusted for housing tenure and geographic housing costs.
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