Thursday, October 16, 2014

Without Social Security Income, A Majority of U.S. Seniors Would Be Poor

Neil Shah, WSJ

A majority of U.S. seniors would be poor if Social Security were excluded from their incomes, according to a report on poverty released by the Census Bureau on Thursday.

In its report, Census provided a more comprehensive measure of poverty than its official rate—one that accounts for things such as differences in living costs across the country and antipoverty programs. For seniors, this “supplemental” rate dropped to 14.6% last year from 14.8%. That is good news because the nation’s “official” rate, released last month, suggested poverty among those 65 years old and up jumped from 9.1% to 9.5%.

Census’s alternative numbers on senior poverty tend to be higher than the official ones because government economists subtract from seniors’ income the cash they spend on necessary, out-of-pocket medical expenses—expenses that reduce the income they have available to pay for food.

The latest figures show how important America’s social policies—everything from Social Security to the Earned Income Tax Credit—are for the incomes of Americans, especially seniors and children. If Census were to exclude Social Security benefits from income, the poverty rate for American seniors would jump from 14.6% to a whopping 52.6%—roughly 23.4 million people. The nation’s overall poverty rate (based on the alternative measure) would rise to 24.1% from 15.5%.

(More here.)

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