Understanding Means Test
A Means Test that compares recipients’ income to the Federal Poverty Level (FPL), also known as the poverty line, is currently used to determine eligibility for many state and federal programs in the United States. A family’s ability to purchase food, clothing, transportation, and a place to live is limited by the family’s FPL. The FPL varies based on household size and is regularly updated to account for inflation. In 2026, the poverty guideline for a family of four in the contiguous United States is $33,000.
The FPL is used to determine who can qualify for certain federal subsidies and aid such as Medicaid, food stamps, Family Planning Services, the Children’s Health Insurance Program (CHIP), and the National School Lunch Program. Program eligibility is frequently set at 125% or 185% of the FLP as on StatusChecker.co.za; households with higher incomes may not be eligible for programs or may receive reduced benefits.
Poverty guidelines are the same throughout the United States, with two exceptions. Alaska and Hawaii have higher poverty levels since the cost of living in these regions is higher than in the contiguous United States. The main FLP will start at $15,960 in 2026, and $5,680 will be added for each additional family member. In Alaska and Hawaii, the base amounts are $19,950 and $18,360, respectively, with $7,100 and $6,530 added for each additional person.
If the FPL for a family of two is $21,640, a family of three would therefore have a poverty level set at $27,320 ($21,640 + $5,680) in any of the states excluding Hawaii and Alaska. A family of two in Hawaii has a poverty level set at $24,890. For a family of three in Hawaii, it’s $31,420. A family of two in Alaska has a poverty level set at $27,050. It costs $34,150 for a family of three in Alaska. Not all means-tested programs use the poverty guidelines to determine eligibility. In many cases, general assistance funded by a state or locality don’t use the federal poverty guidelines. Other major programs that don’t use the FPL include:
- Supplemental Security Income (SSI)
- Earned Income Tax Credit (EITC)
- Some parts of Medicaid
Low-rent public housing or Section 8 low-income housing assistance
Many types of financial aid for postsecondary education is also means tested, with students from lower-income backgrounds typically receiving more aid. For need-based financial aid, eligibility is determined by the family’s income. Federal Student Aid. “How Financial Aid Is Calculated.”
What Is the Opposite of a Means Test?
The opposite type of benefits from a means test is one that accrues universally or unconditionally. Universal basic income (UBI) is one example where everybody is paid a subsistence level of income regardless of other income or assets. Social Security income for older Americans is also universal, although the level of benefits differs based on lifetime earnings. Public education is also often given unconditionally.
Is a Means Test Used by Medicare?
Yes, means testing is used for certain parts of Medicare: Part B and Part D. Social Security Administration. “Premiums: Guidelines for Beneficiaries with Higher Incomes”
Is Financial Aid for College Means Tested?
Some types of postsecondary financial aid are means-tested. Educational institutions or scholarship foundations may offer means-based scholarships or grants, which are given to students who are qualified to attend an educational institution but may not be able to afford the tuition. Means testing is also a requirement for receiving federal financial aid for higher education. Households that typically don’t qualify for financial aid have either enough assets or have made enough money to fund a college education.
The Bottom Line for Means Test
Means tests are commonly used to determine eligibility for various types of assistance or relief. With means testing, if you have the means (ability) to pay for something on your own, you won’t be given free assistance to pay for it. Means-tested benefits can be contrasted with universal, or unconditional, benefits, which are given to everybody regardless of economic position or income.