Federal guidelines say $30,000 a year is poverty-level for a family of four. But a new United Way report says a family of four actually needs a minimum of $126,000 a year to cover basic necessities in Connecticut. The report estimates residents have seen an 18.2% rate of inflation between 2021 and 2023 for a budget that covers basic survival for a household: housing, utilities, food, child care, transportation and technology, such as internet or cell phone bills.
The United Way calculates its $126,000 figure in the ALICE Project, which stands for Asset Limited, Income Constrained and Employed, said United Way of Connecticut president and CEO Lisa Tepper Bates.
“The federal poverty line is not intended to be a real indicator of what it costs to make ends meet,” Bates said. “To really think about who is it that is just barely getting by, you really have to think in concrete terms about the cost of living. ALICE is really meant to capture what it really is to be employed and working as hard as you can at the job available to you, but still struggling just to make ends meet.”
In 2023, she said the report estimates that a family of two parents, a baby and a toddler would have to cover $126,000 in expenses for the year. A single person household would need to make just under $40,000.
“Anybody who's not able to make that is struggling," Bates said. "We believe that that's the line we should pay attention to.”
More CT families live paycheck to paycheck, compared to five years ago
The latest median income figure in Connecticut for a family of four is $133,000, just above that $126,000 threshold calculated by The United Way. Bates said the report confirms there is a large number of financially insecure Connecticut residents, and it has increased since the year before the COVID-19 pandemic.
“Our best estimate is that 39% of all households in Connecticut are either just at that paycheck-to-paycheck, ALICE threshold or falling behind,” Bates said. “That's 552,000 households in Connecticut. And unfortunately, that's 54,000 more households than were at that paycheck-to-paycheck or below level in 2019.”
Bates says she hopes the findings of The United Way’s report will spur Connecticut lawmakers to put in place some form of a state child tax credit. Out of the 41 states that levy a state income tax, she said Connecticut is the only one that offers no sort of tax credit or tax break for families with children.
“If we can share an understanding of who's struggling,” Bates said, “then we hope that policymakers and lay people can work together to think about solutions that we can take if we so decide to provide more support to families with children and to single people who are struggling.”
Lower income families filing federal tax returns may receive financial benefits
Connecticut families with children can still take advantage of the federal Child Tax Credit. But to do that, Bates said a family would have to file a tax return. That’s not something married, joint filers making $25,900 or less or single filers making under $12,950 dollars are legally required to do.
“We do know that there are a number of struggling Connecticut households who aren't filing taxes and could actually access those benefits if they do so,” Bates said. “Often people think that they're just going to pay. But often, folks who are not making enough will actually get a benefit back.”
