At the same time, the report shows that the number of elderly living in poverty is much higher than previously calculated.
The U.S. poverty rate, taken in September using the traditional measure, was at 15.1 percent. The new measure places U.S. poverty at 16 percent.
The new method of calculating poverty - meant to give a more accurate picture of deprivation in America - looks at factors that the traditional method does not.
For one thing, it takes into account the benefits that the poor receive - including food stamps, earned-income-tax credits, special aid to young mothers, and school meals.
On the other side of the ledger, the new method also calculates how much a family has to pay out to survive - including health-care costs, taxes, child care, and housing costs.
The traditional measure of poverty, which has been used for nearly 50 years, has long been criticized as failing to take a full measure of what it costs to live in America. It states that a family of four is poor if it makes less than $22,314 annually.
That older measure, based on how Americans lived in the 1960s, also fails to show that the cost of living in the nation varies widely depending on geography. For example, a Philadelphia apartment rent is higher than one in Bismarck, N.D.
"This much-improved poverty measure accounts for realistic needs and resources," said Curtis Skinner, director of family economic security at the National Center for Children in Poverty at Columbia University's Mailman School of Public Health.
"The big takeaway from the report is that things are working. You can look at the effect on poverty of specific programs. It's not money thrown away."
Poverty for children under age 18 is 18 percent under the new calculation, compared with 22.5 percent under the traditional method.
