A UCLA study published July 31 found that one in five California residents over the age of 65 have incomes above the federal poverty line, but still cannot afford a “decent standard of living.”
The study conducted by the UCLA Center for Health Policy Research found about 772,000 older adults are ineligible for aid programs, though they may not be able to afford basic housing, health care and food.
The study defined this group of older residents as living above the federal poverty level, making them ineligible to receive aid programs, but below the affordable standard of living. This gap is called the Elder Index’s poverty measure.
Nearly 60 percent of single elders in Los Angeles fall either in the Elder Index or below the federal poverty line, according to the findings of the study. More than 50 percent of the California elder population is unable to support themselves, according to the study.
The Daily Bruin’s Shreya Maskara spoke to D. Imelda Padilla-Frausto, a UCLA graduate student researcher and lead author of the study, about these “hidden poor,” their impact on the economy and policy changes that could address the problem.
Daily Bruin: What were the main findings of your study?
D. Imelda Padilla-Frausto: We discovered that about 770,000 older Californians are living in the category of the “hidden poor”, where they earn more than $10,890 which is the federal poverty guideline. However, the actual figure for California should be around $23,364 due to costs of housing and healthcare.
We associate the federal poverty level with the number of people who live in poverty, so when we look at the federal poverty level, we think that people who live above this are not struggling. However, we saw that individuals had incomes above the federal poverty level, but lower than the elder index.
DB: What are the main differences between the Elder Index and the federal poverty level?
DPF: When the federal poverty level was formed in the 1950s, the government based it on a household’s food budget because at that time food was about a third of the household budget. However, things have changed drastically since the 1950s, and housing and healthcare are now the big drivers in a household’s budget.
The federal poverty level is one blanket amount for the nation, so it doesn’t take into account whether you live in California, where the cost of living is very high. The Elder Index, on the other hand, calculates the actual cost of living by county, so it really includes those big drivers in the people’s budgets. The federal poverty level was good in the 1950s, but now it is an outdated measure.
DB: What kind of policy changes do you think can help address the problem of the “hidden poor” in California?
DPF: I think the broad blanket approach would be to increase the income to older adults, because that is the most flexible resource that would help cover their basic needs.
Increasing income through legislation such as Assembly Bill 474, which aims to increase individual social security incomes from $889 per month to $1,099 per month, would help older adults. Supplemental Security Income was cut for single adults during the recession. Now the recession is over and we have $6 billion surplus in our budget, but the pre-recession cuts have not been restored.
I also think the Supplemental Security Restoration Act will also help in allowing older adults to be eligible for Supplemental Security Income, because the income limits used right now are so low that a lot of older adults are not eligible for these benefits.
DB: How likely is Assembly Bill 474 to be approved?
DPF: The AB 474 has been pushed to 2016, which means that even if it is approved, it will not be implemented until 2016. I think if constituents put pressure on assembly makers and mobilized support for the bill, it could gather momentum and lead to its implementation.
DB: What about other measures such as improving financial literacy? Would that help solve the problem?
DPF: Financial literacy could help anyone, but for older adults who don’t even have enough income to budget and meet their basic living expenses, it is kind of like putting the cart before the horse.
I think the way to deal with the situation is to allow for measures that allow elders to acquire affordable housing, healthcare and food. I hope the study will help bring to light the need to help out people who are in this category of the “hidden poor” and legislative changes will be made to provide them with government assistance.
Compiled by Shreya Maskara, Bruin senior staff.