Objectives: To identify the chronic health conditions associated with multidimensional poverty. Design: Cross-sectional study of the nationally representative Survey of Disability, Ageing and Carers, conducted by the Australian Bureau of Statistics. Setting: Australian population in 2003. Participants: 35 704 individuals randomly selected from the Australian population by the Australian Bureau of Statistics. Outcome measures: Multidimensional poverty status, costs of disability, short form 6D health utility score, income, education attainment. Results: Among those who were multidimensionally poor, 75% had a chronic health condition and the most common health conditions were back problems (11% of those in multidimensional poverty had back problems) and arthritis (11%). The conditions with the highest proportion of individuals in multidimensional poverty were depression/mood affecting disorders (26% in multidimensional poverty) and mental and behavioural disorders (22%). Those with depression/ mood affecting disorders were nearly seven times (OR 6.60, 95% CI 5.09 to 8.55, p<0.0001) more likely to be multidimensionally poor than those with no health condition. Equivalising for the additional costs of disability increased the proportion of individuals in multidimensional poverty for all conditions and the conditions with the highest proportion of individuals in multidimensional poverty changed. Conclusions: Owing to the influence of certain health conditions on poverty status, health interventions have the potential to improve national living standards and poverty rates in a similar way that 'traditional' policy responses such as changes to welfare payment currently do. Using a multidimensional poverty measure reveals the health conditions that should be the focus of such efforts.