Poverty Among Seniors: An Updated Analysis of National and State Level Poverty Rates Under the Official and Supplemental Poverty Measures

Source: Juliette Cubanski, Giselle Casillas, and Anthony Damico, Kaiser Family Foundation, Issue Brief, June 2015

From the introduction:
Payments from Social Security and Supplemental Security Income have played a critical role in enhancing economic security and reducing poverty rates among people ages 65 and older. Yet many older adults live on limited incomes, and have modest savings. In 2013, half of all people on Medicare had incomes less than $23,500, which is equivalent to 200 percent of poverty in 2015. In recent policy discussions, some have proposed policies to strengthen financial protections under Medicare for lower-income seniors, while others would impose greater costs on beneficiaries along with other changes to scale back spending on Medicare, Social Security and other programs. This brief presents data on poverty rates among seniors, as context for understanding the implications of potential changes to federal and state programs that help to bolster financial security among older adults.

This analysis presents national and state-level poverty rates among people ages 65 and older, based on two measures from the U.S. Census Bureau, using data from the 2014 Current Population Survey (CPS) and pooled 2012-2014 CPS for state-level data: the official poverty measure and the Supplemental Poverty Measure (SPM). The SPM differs from the official poverty measure in a number of ways to reflect available financial resources, including liabilities (such as taxes), the value of in-kind benefits (such as food stamps), out-of-pocket medical spending (which is generally higher among older adults), geographic variations in housing expenses, and other factors. According to the Census Bureau, about one in seven people ages 65 and older (15%) have incomes below the SPM poverty thresholds, compared to one in ten (10%) under the official measure.

Key findings from this analysis:
● Close to half (45%) of adults ages 65 and older had incomes below twice the poverty thresholds under the SPM in 2013, compared to 33% of older adults under the official measure.
● The poverty rate was higher among women ages 65 and older than men in this age group in 2013 under both the official measure (12% versus 7%) and the SPM (17% versus 12%). Among people ages 80 and older, 23 percent of women lived below the SPM poverty thresholds in 2013, compared to 14 percent of men.
● The official poverty rate in 2013 was nearly three times larger among Hispanic adults than among white adults ages 65 and older (20% versus 7%) and two and a half times larger among black adults ages 65 and older (18%). Rates of poverty for all three groups were higher under the SPM, with 28 percent of Hispanic adults, 22 percent of black adults, and 12 percent of white adults ages 65 and older living below the SPM poverty thresholds in 2013.
● The share of seniors living in poverty is larger in every state under the SPM than under the official measure, and at least twice as large in 9 states: California (21% versus 10%), Connecticut (14% versus 7%), Hawaii (17% versus 8%), Indiana (13% versus 6%), Massachusetts (16% versus 8%), Maryland (16% versus 8%), Nevada (18% versus 9%), New Hampshire (14% versus 6%), and New Jersey (15% versus 7%).