How to know if you're an ALICE: You're barely paying your bills but don't qualify for government assistance

ALICE families look differently depending on their circumstances. They could live off $130,000 for a family of six or $25,000 for a family of three.

• The share of US households making just enough to get by but not getting assistance is rising nationwide.
• They're known as ALICE — asset-limited, income-constrained, employed. 
• The income threshold for this group varies widely between states and cities.

Almost a third of Americans are falling through the cracks of the US economy. Here's how to know if you're one of them.

These households face an economic predicament: They earn too much money to receive most government assistance, but they're still barely getting by.

That can look different, depending on a family's circumstances. It might be an income of $130,000 for a family of six near St. Louis or $25,000 for a family of three in Michigan.

These families are part of a group economists call ALICE, or asset-limited, income-constrained and employed. The latest figures from United For ALICE, shared exclusively with Business Insider, reveal that, from 2021 to 2022, the number of ALICE households rose by nearly 1.6 million. That means at least 29% of households in the US are considered ALICE.

This compares to 13% of Americans who live at or below the federal poverty line, which is $31,200 a year for a family of four. Created in the 1960s, the poverty line is determined solely by household income and is not adjusted based on a family's circumstances, location, or cost of living. Still, government assistance programs that use the metric to assess need are leaving out a large swatch of the population.

Because ALICE households tend to live just above the poverty threshold — sometimes by less than $100 — they aren't covered by America's safety nets. Many live paycheck to paycheck and struggle to afford necessities like rent, groceries, transportation, and healthcare. Families have told BI that their financial situation has forced them to make tough decisions, like choosing between paying their electricity bill or their rent.

"I'm not homeless enough to get certain help because I have a roof over my head," an ALICE woman living in Wilmington, North Carolina, previously told BI. "But I'm too homeless to get a job because I don't know where I'm going to live in three weeks. What do you do?"

How to know if you're an ALICE

United For ALICE's criteria depend on four main factors: a household's location, size, estimated survival budget, and access to government assistance.

• Location determines how much a family can expect to pay for everyday expenses. For instance, two full-time hourly wages of $15 could support a family of four in Clarke County, Alabama, but not one in Cook County, Illinois.
• Household size measures whether a family has one or two incomes and the number of dependents. Single-income households with multiple children are highly likely to be ALICE.
• Survival budgets include the annual costs of housing, childcare, food, transportation, healthcare, technology, taxes, and miscellaneous spending. The amount varies based on a household's location and number of dependents — and can also be impacted by tax credits. The lowest household survival budget in the US is still around $60,000 for a family of four with two younger children.
• Access to government assistance is frequently based on the federal poverty line. An ALICE family might be low-income but fall short of qualifying for housing assistance or out of reach of programs like SNAP and Medicaid.

If you live above the poverty threshold but are unable to cover all expenses in your survival budget, you're probably an ALICE.

Certain groups are more likely to be ALICE

Demographically, ALICE Americans are more prevalent across some generations and professions.

• Americans who are ALICE often work in retail, healthcare, and food services, and just 61% of all full-time workers earn enough to match their household survival budget.
• Black and Hispanic families are more likely to fall at or below the ALICE threshold compared to white families.
• More Gen Zers and boomers are ALICE compared to millennials and Gen X. Inflation has forced many boomers, especially, to continue working into their 60s and 70s. In 2022, over half of US households 65 or older were below the ALICE threshold because it's becoming increasingly difficult for millions of Americans to survive solely off of Social Security benefits or their retirement funds. The ALICE 65+ Survival Budget ranges from anywhere between $767 and $2,780 per month more than Social Security payments nationwide.
• Parents are hit especially hard by the high costs of raising children and the national lack of affordable childcare options. Between 2010 and 2022, married ALICE households with children grew 12%, single-female-headed ALICE households grew 14%, and single-male-headed households grew 35%. However, childfree adults also struggle to get financial help when they need it — having financially dependent children is often a prerequisite for tax credits and government assistance programs.

With the cost of living rising across the US, United for ALICE predicts more families to become ALICE over time. The end of pandemic-era assistance has also made it more difficult for ALICE families to recover from financial hardship.

Do you live above the federal poverty line but struggle to afford daily expenses? Are you open to sharing your story? If so, reach out to these reporters at allisonkelly@businessinsider.com, nsheidlower@businessinsider.com, and jkaplan@businessinsider.com.