VI. CHILD POVERTY

The child poverty rate, as measured by the Census Bureau's official poverty measure, declined from 1993 to 1995 and remained unchanged for 1996; holding at 20.5%.

The official poverty measure is based on a definition of income that includes cash income received by the individual or family. Near cash and non-cash transfers are not included in the income definition nor are subtractions or additions to income made through the tax system. To determine an individual's or family's poverty status the total cash income is compared to a standard of basic needs, the poverty threshold. The poverty threshold varies by the size of the family. In 1996, the poverty threshold for a family of four was $15,911.

The Census Bureau also produces a series of additional measures of poverty. These additional measures use the same poverty thresholds but expand the income definition to include near cash transfers (e.g. food stamp and housing) and the impacts of taxes, including the payroll tax and the Earned Income Tax Credit (EITC). Table 6.1 presents the poverty rates.

This more inclusive measure of income results in fewer children living in families with income below the poverty threshold. When taking into account this new definition, poverty is decreased to 16.1% . The EITC alone lifts one of every seven poor children out of poverty.

Child poverty rates vary widely for different demographic groups. In particular, there are significant differences in child poverty rates by marital status and race. A child living in a single parent family is five times more likely to be poor than a child living in a two parent family. In married, two parent families about one in ten children are poor (10.1%), whereas half the children living in a single parent family are poor. The poverty rate for children living in an African American or Hispanic family is about two and one-half times higher then children living in a white, non-Hispanic family. While the poverty rate for white, non-Hispanic children is 16.3%, the poverty rate for African American or Hispanic children is 40% or about two of every five children.

Pursuant to section 413(i) of the Act, HHS will issue a notice of proposed rule making describing the methodology that each state shall use for determining the child poverty rate in the state. If a state experiences an increase in its child poverty rate of 5 percent or more as a result of its Temporary Assistance for Needy Families (TANF) program, then the state must submit and implement a corrective action plan. HHS expects to issue a proposed rule this year.

Appendices:

Table 6:1 Poverty Rates for All Children For Selected Years, 1979 - 1996