Objective Low income is known to be associated with having arthritis. However, no longitudinal studies have documented the relationship between developing arthritis and falling into poverty. The purpose of this study was to evaluate Australians who developed arthritis to determine if they had an elevated risk of falling into poverty. Methods Survival analysis using Cox regression models was applied to nationally representative, longitudinal survey data obtained between January 1, 2007 and December 31, 2012 from Australian adults who were ages 21 years and older in 2007. Results The hazard ratio for falling into income poverty was 1.08 (95% confidence interval [95% CI] 1.06-1.09) in women who were diagnosed as having arthritis and 1.15 (95% CI 1.13-1.16) in men who were diagnosed as having arthritis, as compared to those who were never diagnosed as having arthritis. The hazard ratio for falling into multidimensional poverty was 1.15 (95% CI 1.14-1.17) in women who were diagnosed as having arthritis and 1.88 (95% CI 1.85-1.91) in men who were diagnosed as having arthritis. Conclusion Developing arthritis increases the risk of falling into income poverty and multidimensional poverty. The risk of multidimensional poverty is greater than the risk of income poverty. Given the high prevalence of arthritis, the condition is likely an overlooked driver of poverty.