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7 Household collections conducted by the ABS which cover housing for Indigenous Australians are:
8 Care should be taken when comparing data from the different sources due to the different methodologies used in these collections.
Changes in this issue
9 Key changes which impact this issue include:
Changes to the survey sample
10 The expansion in the 2009-10 sample for an extra 4,200 households was maintained in the 2011-12 SIH. This additional sample of households outside capital cities better supports Council of Australian Governments (COAG) performance indicator reporting, particularly in regard to housing affordability and home ownership measures required under COAG intergovernmental agreements.
11 The additional sample of metropolitan households whose main source of income was a government pension, benefit and/or allowance included in the 2009-10 SIH and HES samples has not been maintained in the 2011-12 sample. The main purpose of this additional sample was to support improved analysis for the Pensioner and Beneficiary Living Cost Index (PBLCI).
12 In 2007-08 the ABS revised its standards for household income statistics following the adoption of new international standards in 2004 and review of aspects of the collection and dissemination of income data. The income estimates from 2007-08 onwards apply the new income standards, and are not directly comparable with estimates for previous cycles.
13 To the extent possible, the estimates for 2003-04 and 2005-06 shown in the time series tables in this publication also reflect the new treatments.
14 For more detail on the nature and impact of the changes on the income data see Appendix 4 of Household Income and Income Distribution, Australia, 2007-08 (cat. no. 6523.0).
15 Errors in processing the 2009-10 income data have been corrected, resulting in an average decrease of $1 for mean equivalised disposable household income across all households. This was reflected largely in a decrease of 0.04% in the mean equivalised disposable household income of households in the second and third deciles. The income estimates for 2009-10 shown in this publication have been revised. The second edition of the 2009-10 CURF includes the revised estimates.
CONCEPTS AND DEFINITIONS
16 The concepts and definitions relating to the statistics in this publication are described in the following section. Other definitions are included in the Glossary.
17 The household is the basic unit of analysis in this publication. A household consists of one or more persons, at least one of whom is at least 15 years of age, usually resident in the same private dwelling. The persons in a household may or may not be related. They must live wholly within one dwelling. A group of people who make common provision for food and other essentials of living but live in two separate dwellings are in two separate households.
18 The household is adopted as the basic unit of analysis because it is assumed that sharing of the use of goods and services occurs at this level. If smaller units, say persons, are adopted, then it is difficult to know how to attribute to individual household members the use of shared items such as food, accommodation and household goods. Intra-household transfers, however, are excluded. For example, if one member of the household were to pay board to another member of the same household then this is not considered as an increase in the amount of income or housing costs of the household. If such transfers were to be included there would be double counting.
19 Although the household has been adopted as the basic level of analysis in this publication, tenure data have been included on an income unit basis in table 38. An income unit is a single person or a group of related persons within a household, whose command over income is assumed to be shared. Income sharing is assumed to take place within married (registered or defacto) couples, and between parents and their dependent children. The income unit is similar, but not identical, to the unit used in determining the eligibility of people for many government pensions and allowances such as Centrelink payments.
20 Housing costs are the recurrent outlays by household members in providing for their shelter for themselves. The data collected on housing outlays in the SIH are limited to major outlays on housing, that is, mortgage repayments, rent, property and water rates as well as body corporate fees. Housing costs are shown in this publication as weekly equivalents.
21 Only payments which relate to the dwelling occupied by the household at time of interview, that is, a respondent's usual place of residence, are included. Housing costs only include mortgage/loan payments if the purpose of the loan at the time it was initially taken out was primarily to buy, build, add to or alter the occupied dwelling.
22 There are a number of limitations to the housing costs information presented in this publication due to practical data collection considerations. These limitations should be especially borne in mind when comparing the housing costs of different tenure and landlord types, that is, when comparing the costs of owner occupiers with the costs of renting households, and when comparing the costs of households renting from state and territory housing authorities with the costs of other renters.
Housing costs and household income
23 Housing costs are often a major component of total living costs. Therefore housing costs are often analysed as a proportion of total income, sometimes referred to as affordability ratios. However, comparisons between these measures are subject to the limitations of housing cost estimates obtained in the SIH that are described in the previous paragraph. Housing affordability ratios derived from SIH data are further impacted by the inclusion of CRA in the value of income collected. CRA is estimated, on average, to represent about 5% of the reported income of households receiving CRA and about 1% of the reported income of all households renting from landlords other than the state/territory authorities.
24 To illustrate the difficulties discussed above, consider two couples that are renting their dwellings. Both receive government pensions of $400 per week. One rents from a public housing authority and pays rent of $100 per week. The other pays $135 rent per week to a private landlord and receives CRA of $35 per week. In SIH, the housing costs of the latter household would be recorded as $135 and their income would be recorded as $435. The couple renting from the public housing authority has a housing costs/income ratio of 25%. The housing costs/income ratio for the latter household would be derived as 31%. However, if CRA receipts are excluded from housing costs and income the housing costs/income ratio for the latter couple is also 25%, highlighting that there is no substantive difference between the housing costs or income situation of the two couples. The treatment of CRA is of particular importance when considering changes in affordability ratios over time, since there has been a shift from providing public housing to providing CRA as a means of supplying affordable housing to low income people.
25 While housing costs can be a major component of total living costs, the difference between the housing costs of a larger household and a smaller household would not be expected to be as great as the difference in many other costs, such as food or clothing. In other words, larger households can be expected to experience economies of scale in the supply of housing. This means that if a larger household and smaller household both have the same standard of living, it could be expected that on average the larger household will have a lower housing costs/income ratio. Therefore relatively high housing costs/income ratios are more of a concern with respect to larger households than smaller households. This should be borne in mind when comparing ratios across different household sizes.
26 In comparing households' housing costs with their income, it should be noted that households have a variety of housing preferences. Some people may choose to live in an area with high property values because it is close to their place of employment and therefore they have lower transport costs. Some people choose to incur relatively high housing costs because they prefer a relatively high standard of housing compared with other consumption possibilities. High mortgage repayments might reflect a choice to purchase a relatively expensive home, or pay off a mortgage relatively rapidly, as a form of investment.
27 In this issue, households with nil or negative income have been excluded from calculations of housing costs as a proportion of gross income. These households make up 0.5% of all households.
28 Some households report extremely low income in the survey, which places them well below the safety net of income support by social security pensions and allowances. As explained in paragraphs 50 to 54 below, the incomes of these people are not always an appropriate indicator of the economic resources available to them. These households are likely to have high housing costs/income ratios.
29 Households with relatively low income, and housing costs greater than a certain proportion of income, often 30%, are sometimes said to be in "housing stress". Table 5 provides information on housing costs as a proportion of gross income separately for all and lower income households. (Lower income households are defined here as those containing the 30% of people with equivalised disposable household income between the 10th and 40th percentiles). However, such measures should be interpreted with care because of the lack of comparability of the ratios across tenure and landlord types and the difficulties of comparing across different household sizes, as described in the previous paragraphs.
30 The concept of housing utilisation in this publication is based upon a comparison of the number of bedrooms in a dwelling with a series of household demographics such as the number of usual residents, their relationship to one another, age and sex. There is no single standard or measure for housing utilisation. However the Canadian National Occupancy Standard presented in this publication is widely used internationally.
31 The Canadian National Occupancy Standard for housing appropriateness is sensitive to both household size and composition. The measure assesses the bedroom requirements of a household by specifying that:
32 Households living in dwellings where this standard cannot be met are considered to be overcrowded.
Tenure type and landlord type
33 The concept of housing tenure is based on the type of legal right of the occupant/s to occupy the dwelling. Tenure is determined according to whether the unit (household, income unit or person) owns the dwelling outright, owns the dwelling but has a mortgage or loan secured against it, is paying rent to live in the dwelling or has some other arrangement to occupy the dwelling.
34 In this publication, tenure information is provided at both the household and income unit levels. Person level tenure was also enumerated in the 2011-12 SIH and is available on the CURF. Tenure information at household, income unit and person levels enables users to analyse within household tenure arrangements, such as subletting and boarding.
35 Owners are divided into two categories - owners with mortgages and owners without mortgages. A household's tenure type is owner with a mortgage if there is any outstanding mortgage or loan secured against the dwelling. This mortgage or loan may have been initially obtained primarily for either the purchase or the building of the dwelling, or for undertaking alterations or additions, or for some other purpose such as the purchase of a vehicle or an investment property. However, mortgage payments where the initial purpose of the loan was not primarily for housing are not treated as housing costs. A household's tenure type is owner without a mortgage if there are no loans or mortgages secured against the dwelling.
36 Renters are occupants who pay money as rent to another person or organisation, referred to as the landlord, in return for being allowed to occupy the dwelling. Renters can be further classified according to type of landlord. The landlord may be a relative or an unrelated person in another dwelling, or can be a real estate agency, a state or territory housing authority, a community organisation, a trust, or an employer.
37 Household income consists of all current receipts, whether monetary or in kind, that are received by the household or by individual members of the household, and which are available for, or intended to support, current consumption.
38 Income includes receipts from:
39 Receipts of family tax benefit are treated as income, regardless of whether they are received fortnightly or as a lump sum. The aged persons' savings bonus and self-funded retirees' supplementary bonus, paid as part of the introduction of The New Tax System in 2000-01 are regarded as capital transfers as they were designed to help retired people maintain the value of their savings and investments following the introduction of the GST. However, the one-off payment to older Australians paid in 2000-01, 2005-06 and 2007-08, the one-off payment to families paid since 2003-04, and the one-off payments to carers paid since 2003-04, were included as income as they were primarily a supplement to existing income support payments. The maternity payment introduced in July 2004, referred to as the Baby Bonus, is also included as income.
40 The one-off clean energy advance payment paid in May 2012 and June 2012 is also included as income. This one-off payment was paid to pensioners, other income support recipients, families receiving Family Tax Benefit payments and Senior Supplement recipients, provided they met eligibility requirements.
41 Also included as income is the one-off Education Tax Refund that was paid to eligible families in June 2012. This one-off payment was made payable to families receiving Family Tax Benefit Part A, plus young people in school receiving Youth Allowance and some other income support and veterans' payments, providing they met the age and education requirements.
42 Income is collected using a number of different reporting periods, such as the whole financial year for own unincorporated business and investment income, and the usual payment for a period close to time of interview for wages and salaries, other sources of private income and government pensions and allowances. The income reported is divided by the number of weeks in the reporting period. Estimates of weekly income in this publication therefore do not refer to a given week within the reference year of the survey.
43 Gross income is the sum of the income from all sources before income tax and the Medicare levy have been deducted. Prior to 2005-06, family tax benefit paid through the tax system or as a lump sum was excluded from gross income for practical reasons but deducted in deriving disposable income. Since 2005-06, these payments have been included in gross income.
44 Disposable income better represents the economic resources available to meet the needs of households. It is derived by deducting estimates of personal income tax and the Medicare levy from gross income. The Medicare levy surcharge was also calculated and deducted from gross income while calculating disposable income (as it was for the first time in 2007-08).
45 Income tax is estimated for all households using taxation criteria for 2011-12 and the income and other characteristics of household members reported in the survey.
46 Prior to 2005-06 the derivation of disposable income also included the addition of family tax benefit paid through the tax system or as a lump sum by Centrelink since, for practical reasons, it was not included in the gross income estimates.
Equivalised disposable income
47 Analyses by income quintile in this publication use equivalised disposable income rather than gross or disposable income since it enables comparison of the relative economic wellbeing of households of different size and composition. Equivalised disposable income is calculated by adjusting disposable income by the application of an equivalence scale. This adjustment reflects the requirement for a larger household to have a higher level of income to achieve the same standard of living as a smaller household. Where disposable income is negative, it is set to zero equivalised disposable income.
48 When household income is adjusted according to an equivalence scale, the equivalised income can be viewed as an indicator of the economic resources available to a standardised household. For a lone person household, it is equal to income received. For a household comprising more than one person, equivalised income is an indicator of the household income that would be required by a lone person household in order to enjoy the same level of economic wellbeing as the household in question.
49 For more information on the use of equivalence scales, readers are referred to Appendix 3 in Household Income and Income Distribution, Australia, 2011-12 (cat. no. 6523.0)
Lowest income decile
50 While equivalised income generally provides a useful indicator of economic wellbeing, there are some circumstances which present particular difficulties. Some households report extremely low and even negative income in the survey, which places them well below the safety net of income support provided by social security pensions and allowances. Households may under report their incomes in the survey at all income levels, including low income households. However, households can correctly report low levels of income if they incur losses in their unincorporated business or have negative returns from their other investments.
51 Studies of income and expenditure reported in HES surveys have shown that such households in the bottom income decile and with negative gross incomes tend to have expenditure levels that are comparable to those of households with higher income levels (and slightly above the average expenditures recorded for the fifth income decile). This suggests that these households have access to economic resources such as wealth, or that the instance of low or negative income is temporary, perhaps reflecting business or investment start up. Other households in the lowest income decile in past surveys had average incomes at about the level of the single pension rate, were predominantly single person households, and their main source of income was largely government pensions and allowances. However, on average, these households also had expenditures above the average of the households in the second income decile, which is not inconsistent with the use of assets to maintain a higher standard of living than implied by their incomes alone.
52 It can therefore be reasonably concluded that many of the households included in the lowest income decile are unlikely to be suffering extremely low levels of economic wellbeing. Income Analysis may lead to inappropriate conclusions if such households are used as the basis for assessing low levels of economic wellbeing. For this reason, tables showing statistics classified by income quintile include a supplementary category comprising the second and third income deciles, which can be used as an alternative to the lowest income quintile. (For an explanation of quintiles and deciles, see Appendix 1 of Household Income and Income Distribution, Australia, 2011-12 (cat. no. 6523.0)).
53 Whenever a HES is conducted, analysis of households in the lowest income decile can be improved through direct observation of the expenditure and net worth of these households. An examination of the characteristics and economic circumstances of people living in households with low economic resources from 2009-10 HIES is included in the feature article in Household Wealth and Wealth Distribution, Australia, 2009-10 (cat. no. 6554.0).
54 Although expenditure data was not collected in SIH 2011-12, analysis on people living in households with low economic resources such as low income or low wealth is provided in the feature article is published in a feature article in Household Income and Income Distribution, Australia, 2011-12 (cat. no. 6523.0).
55 In this publication, the income quintiles are calculated with respect to persons, including children. Such measures are sometimes known as person weighted estimates. Nevertheless, as most of the relevant characteristics of persons relate to their household circumstances, most of the tables in this publication primarily describe households.
56 The survey collects information by personal interview from usual residents of private dwellings in urban and rural areas of Australia (excluding very remote areas), covering about 97% of the people living in Australia. Private dwellings are houses, flats, home units, caravans, garages, tents and other structures that were used as places of residence at the time of interview. Long-stay caravan parks are also included. These are distinct from non-private dwellings which include hotels, boarding schools, boarding houses and institutions. Residents of non-private dwellings are excluded.
57 Usual residents excludes:
58 Information for each household was collected using:
59 Sample copies of the above documents are included in Survey of Income and Housing, User Guide, Australia, 2011-12 (cat. no. 6553.0), released in August 2013.
60 The sample was designed to produce reliable estimates for broad aggregates for households resident in private dwellings aggregated for Australia, for each state and for the capital cities in each state and territory. More detailed estimates should be used with caution, especially for Tasmania, the Northern Territory and the Australian Capital Territory (see Appendix 2).
61 For the 2011-12 SIH, dwellings were selected through a stratified, multistage cluster design from the private dwelling framework of the ABS Population Survey Master Sample. Selections were distributed across a twelve month enumeration period so that the survey results are representative of income patterns across the year.
62 Of the selected dwellings there were 18,298 in scope of the survey. Of these, 3,729 did not respond at all to the questionnaire, or did not respond adequately. Of these 3,729 non-responding households, 49% were not able to be contacted during the survey enumeration and 32% were contacted but either refused to respond or were not able to respond. The remainder of these households included:
Partial response and imputation
63 Some households did not supply all the required information but supplied sufficient information to be retained in the sample. Such partial response occurs when:
64 In the first two cases, the data provided are retained and the missing data are imputed by replacing each missing value with a value reported by another person (referred to as the donor).
65 For the third type of partial response, the data for the persons who did respond are retained, and data for each missing person are provided by imputing data values equivalent to those of a fully responding person (the donor).
66 Donor records are selected by finding fully responding persons with matching information on various characteristics (such as state, sex, age, labour force status and income) as the person with missing information. As far as possible, the imputed information is an appropriate proxy for the information that is missing. Depending on which values are to be imputed, donors are randomly chosen from the pool of individual records with complete information for the block of questions where the missing information occurs.
67 The final sample includes 5,850 households which had at least one imputed value. For 29.4% of these households only a single value was missing, and most of these were for income from superannuation or interest and investments.
68 The final sample on which estimates were based is composed of persons for which all necessary information is available. The information may have been wholly provided at the interview (fully-responding) or may have been completed through imputation for partially responding households. Of the selected dwellings, there were 18,298 in the scope of the survey, of which 14,569 (80%) were included as part of the final estimates.
69 Weighting is the process of adjusting results from a sample survey to infer results for the total in scope population whether that be persons or households. To do this, a 'weight' is allocated to each sample unit (e.g. a person or a household). The weight is a value which indicates how many population units are represented by the sample unit. The first step in calculating weights for each unit is to assign an initial weight, which is the inverse of the probability of being selected in the survey. For example, if the probability of a household being selected in the survey was 1 in 600, then the household would have an initial weight of 600 (that is, it represents 600 households).
70 An adjustment is then made to the initial weights to ensure that seasonal variation is appropriately represented in survey estimates. After this initial adjustment, the sum of the weights of households in each quarter is in proportion to the length of the quarter (which align across the financial year with pension indexation dates rather than calendar quarters).
71 The initial weights are then calibrated to align with independent estimates of the population of interest, referred to as 'benchmarks'. Weights calibrated against population benchmarks ensure that the survey estimates conform to the independently estimated distribution of the population rather than to the distribution within the sample itself.
72 Most of the independent person and household benchmarks are based on demography estimates of numbers of persons and households in Australia. The benchmarks are adjusted to include persons and households residing in private dwellings only and to exclude persons living in very remote areas, and therefore do not, and are not intended to, match estimates of the Australian resident population published in other ABS publications. The demography estimates of persons (estimated resident population - ERP) and households used in SIH 2011-12 are built up from the 2006 Census.
73 In the 2011-12 SIH, as in 2007-08 and 2009-10, all persons in each household were assigned a weight. This differs from the 2005-06 SIH where children aged 0-14 years were not given separate weights, but household counts of the number of children were benchmarked to population totals.
74 The benchmarks used in the calibration of the final weights for the 2011-12 SIH were:
75 Estimates produced from the SIH are usually in the form of averages (e.g. average weekly income of couple households with dependent children), or counts (e.g. total number of households that own their dwelling or total number of persons living in households that own their own dwelling). For counts of households, the estimate was obtained by summing the weights for the responding households in the required group (e.g. those owning their own dwelling). For counts of persons, the household weights were multiplied by the number of persons in the household before summing. The SIH collects data on the number of people, including children, in each household but separate records with income and other detailed data were only collected for people 15 years and older.
76 Average income values are obtained in two different ways, depending on whether mean gross household income or mean equivalised disposable household income is being derived. Estimates of mean gross household income are calculated on a household weighted basis. They are obtained by multiplying the gross income of each household by the weight of the household, summing across all households and then dividing by the estimated number of households. For example, the mean gross household income of couple households with dependent children is the weighted sum of the gross income of each such household divided by the estimated number of those households.
77 Estimates of mean equivalised disposable household income are calculated on a person weighted basis. They are obtained by multiplying the equivalised disposable income of each household by the number of people in the household (including children) and by the weight of the household, summing across all households and then dividing by the estimated number of people in the population group. Appendix 3 in Survey of Income and Housing, User Guide, Australia, 2011-12 (cat. no. 6553.0) released in August 2013, illustrates the differences between mean gross household income calculated on a household weighted basis and mean equivalised disposable household income calculated on a person weighted basis.
RELIABILITY OF ESTIMATES
78 The estimates provided in this publication are subject to two types of error, non-sampling and sampling error.
79 Non-sampling error can occur in any collection, whether the estimates are derived from a sample or from a complete collection such as a census. Sources of non-sampling error include non-response, errors in reporting by respondents or recording of answers by interviewers, and errors in coding and processing the data.
80 Non-sampling errors are difficult to quantify in any collection. However, every effort is made to reduce non-sampling error to a minimum by careful design and testing of the questionnaire, training of interviewers and data entry staff, and extensive editing and quality control procedures at all stages of data processing.
81 One of the main sources of non-sampling error is non-response by persons selected in the survey. Non-response occurs when people cannot or will not cooperate or cannot be contacted. Non-response can affect the reliability of results and can introduce a bias. The magnitude of any bias depends upon the level of non-response and the extent of the difference between the characteristics of those people who responded to the survey and those who did not.
82 The following methods were adopted to reduce the level and impact of non-response:
83 The estimates are based on a sample of possible observations and are subject to sampling variability. The estimates may therefore differ from the figures that would have been produced if information had been collected for all households. A measure of the sampling error for a given estimate is provided by the standard error, which may be expressed as a percentage of the estimate (relative standard error). Further information on sampling error is given in Appendix 2.
84 ABS publications draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued cooperation is very much appreciated: without it, the wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act 1905.
SPECIAL DATA SERVICES
85 The ABS offers specialist consultancy services to assist clients with more complex statistical information needs. Clients may wish to have the unit record data analysed according to their own needs, or require tailored tables incorporating data items and populations as requested by them. Tables and other analytical outputs can be made available electronically or in printed form. However, as the level of detail or disaggregation increases with detailed requests, the number of contributors to data cells decreases. This may result in some requested information not being able to be released due to confidentiality or sampling variability constraints. All specialist consultancy services attract a service charge, and clients will be provided with a quote before information is supplied. For further information, contact ABS information consultants on 1300 135 070 from 9:00am to 4:30pm AEST Monday to Friday (International callers +61 2 9268 4909).
UNIT RECORD FILE
86 A basic confidentialised unit record file (CURF) from the 2011-12 SIH will be released on CD-ROM in August 2013. A more detailed (expanded) SIH CURF is also available through the ABS Remote Access Data Laboratory. All clients wishing to access the SIH 2011-12 basic and expanded CURFs should refer to the How to Apply for Microdata web page. Clients should familiarise themselves with the User Manual: Responsible Use of ABS CURFs and other related microdata information which are available via the Microdata web pages, before applying for access through MiCRO.
87 The ABS/Universities Australia Agreement provides participating universities with access to a range of ABS products and services. This includes access to CURF data. For further information, university clients should refer to the ABS/Universities Australia CURF Agreement web page.
88 The Microdata Entry page on the ABS website contains links to microdata related information to assist users to understand and access microdata. For further information users should contact the microdata access team by email: firstname.lastname@example.org or telephone (02) 6252 7714.
89 In addition to this publication, users may wish to refer to the following ABS products which are produced from the SIH. All publications can be downloaded free of charge from the ABS website.
90 Other ABS products which relate to housing statistics include:
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