In the early 1990s, Congress commissioned a panel of experts from the National Academy of Sciences (NAS) to address key shortcomings of the official measure. In early 2010, the Obama administration adopted the Supplemental Poverty Measure (SPM) that largely follows the methods recommended by the NAS Panel.
Following the Panel’s recommendations, the SPM defines poverty as the lack of economic resources for consumption of basic needs such as food, housing, clothing, and utilities (FCSU). To determine family resources, gross money income from private and public sources is supplemented with benefits such as food stamps, housing subsidies, and tax credits. Deducted from family income are medical out-of-pocket expenses including health insurance premiums, income and Social Security payroll taxes, child support payments, work-related expenses and child care costs.
Instead of using a food plan, the SPM poverty thresholds are based on expenditures on FCSU plus a small amount to allow for additional expenses. These thresholds are further adjusted for different family sizes and compositions, housing status, and geographic differences in housing costs (Short, 2012).