How Much Does a Family Need to Earn to be Out of Poverty?

Poverty means different things to different people.

The Child Poverty Act 2010 defined poverty as children living in households with less than 60% of equivalised income – income adjusted for the size and composition of the household – before housing costs are taken into account. The Social Metrics Commission, in its recently published report, views poverty as being “the situation where a person’s available material resources are insufficient to adequately meet their immediate material needs”. The measure of resources available should, they say, include not only net income and benefits, but also deductions should be made for “costs that are inescapable in the short term” – in particular the cost of housing. The Commission is clear that resources have to be seen in context – a two-person family needs more than a single person.

The poverty line will differ according to the make up of the household and its housing costs. Childcare costs and debt repayments should also, they say, be taken into account.

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Don Draper