What problem arises when the poverty line is set too low? What problem arises when the poverty line is set too low? Many families with incomes that put them just below poverty line may have a lower standard of living because a certain amount of earned income is required in order to receive any form assistance. Many families with incomes that put them just above the poverty line may have a lower standard of living than those with incomes that place them below the poverty line because the former do not qualify for the assistance (e.g., health care, housing) they need. The median annual income for those in the middle class declines. Internal migration stagnates