Federal Poverty Level - FPL

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DEFINITION of 'Federal Poverty Level - FPL'

The set minimum amount of gross income that a family needs for food, clothing, transportation, shelter and other necessities. In the United States, this level is determined by the Department of Health and Human Services. FPL varies according to family size. The number is adjusted for inflation and reported annually in the form of poverty guidelines. Public assistance programs, such as Medicaid in the U.S., define eligibility income limits as some percentage of FPL.

BREAKING DOWN 'Federal Poverty Level - FPL'

The poverty guidelines are typically issued every February and correspond to the year in which they are issued. For example, the guidelines issued in Feb 2011 are designated as the 2011 poverty guidelines. (In 2011, the gross yearly FPLs were $18,530, $22,350 and $26,170 for families sizes of three, four and five, respectively.) However, when determining an individual's or a family's eligibility for receiving benefits, some government agencies compare before-tax income to the poverty guidelines, while others compare after-tax income. Likewise, eligibility limits may be based on gross income, net income or some other measure of income.

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