Governments and other entities generally use one of two types of statistics--the federal poverty line or HUD's income limits--to determine income eligibility for assistance programs. Most initiatives, particularly federal programs, employ the poverty threshold. HUD's income data, however, is more precise, even though organizations use it primarily for housing assistance programs.
For many types of assistance programs, government entities and other groups use income as the main qualifying criterion. As the U.S. Department of Health and Human Services (HHS) website notes, government agencies use its annual poverty line numbers to determine eligibility for initiatives such as Head Start, Family Planning Services and the National School Lunch Program. Housing assistance programs, such as HUD's Section 8 and public housing programs, use HUD's yearly income limits to regulate access. In Michigan, local agencies throughout the state administer these and other programs; they must adhere to the income guidelines the federal government uses for each scheme.
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As the HHS website points out, HHS and the U.S. Census Bureau release federal poverty line numbers each year. Both sets of figures are national in scope; they do not take into account local income or cost-of-living differences. HUD uses American Community Survey data to set income limits that change across county or metropolitan area lines. For example, the poverty line is the same in Detroit as it is in Los Angeles, however, HUD's income limits vary between the two places.
Neither HHS or the Census Bureau use categories when they release poverty line data. As noted, they publish a static nationwide number that increases as household size grows. HUD sets three main income categories, as noted at its Data Sets website. Families with incomes at or below 80 percent of their area's median income fall into the "low-income" category. HUD considers households with earnings at or below 50 percent of their area's median "very low-income," while households at or below 30 percent of their area's median are "extremely low-income."
Regardless of where you live in Michigan or elsewhere, the federal government considers you to be living in poverty if you earn less than $10,830 as of 2010. For each additional family member, you add $3,740, making the poverty line for a family of four $22,050, according to HHS data.
Using HUD's income limits, a family of four in the Detroit metropolitan area is "low-income" if they earn $55,850 or less. They become "very low-income" at $34,900 or less and "extremely low-income" at $20,950 or less. In Ann Arbor, these numbers rise to $64,400, $42,100 and $25,250, respectively, taking into account differences in local median income.
If you attempt to apply for housing assistance in Michigan, the agency you contact, often your local housing authority, will check to see what percentage of your area's median income your household earns. For example, HUD's Section 8 Housing Choice Voucher program accepts applicants from the "extremely low-income" and "very low-income" categories, while public housing takes applications from families in all three of the above-mentioned groups. Other housing initiatives in Michigan may use different variations on HUD's limits.
For most other federal programs and local programs operated by Michigan agencies, you qualify based on where your income falls in relation to the poverty line. For example, as HHS indicates, programs may only accept applicants with earnings less than a certain percentage of the poverty line, such as 125 or 150 percent.