Poverty is generally and commonly defined as the condition of having little money and few material possessions. Since poverty is defined at the family level and not the household level, the poverty status of the household is determined by the poverty status of the householder.

Households are classified as poor when the total income of the householder's family is below the appropriate poverty threshold. (For nonfamily householders, their own income is compared with the appropriate threshold.) The income of people living in the household who are unrelated to the householder is not considered when determining the poverty status of a household, nor does their presence affect the family size in determining the appropriate threshold. The poverty thresholds vary depending on three criteria: size of family, number of related children, and, for 1- and 2-person families, age of householder.

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