6524.0.55.002 - Estimates of Personal Income for Small Areas, 2011-2015 
Quality Declaration
Quality Declaration ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 28/04/2017
Page tools:
 Print Page
 Print All
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
INTRODUCTION
Please note that income income tax return labels and names may change over time, the relevant item is used for each financial year. Own unincorporated business income 15 Own unincorporated business income is the profit or loss that accrues to owners of, or partners in, their own unincorporated businesses. Profit or loss is the value of the gross output of the enterprise after the deduction of operating expenses, including reportable superannuation contributions, depreciation and operating costs, but before income tax is taken out. Losses occur when operating expenses are greater than receipts and are treated as negative income. This category includes the following data items from the individual income tax return:
16 The data excludes distributions from trusts for non-primary production activities as this may include aspects of investment income. It also excludes the income of working directors/owners of incorporated businesses who are classified as employees; consequently their income is included under Wage and salary income.
Investment income 18 Investment income includes the following data items on the individual income tax returns:
Please note that income income tax return labels and names may change over time, the relevant item is used for each financial year. Superannuation and annuity income 19 Superannuation and annuity income includes the following data items on the individual income tax returns:
Please note that income income tax return labels and names may change over time, the relevant item is used for each financial year. 20 A change to legislation relating to superannuation, taking effect from 1 July 2007, meant that people aged 60 years and over who receive superannuation income in the form of a lump sum or income stream (such as a pension) from a taxed source, receive that income tax free. Therefore, if a person has no other income, or their total income is below the tax-free threshold, or any tax payable is mitigated by a tax offset (such as Senior Australian Tax Offset), then this person is not required to lodge a tax return. 21 Due to such changes, the superannuation estimates (persons, income) published in this publication are regarded as partial, subject to under-coverage. A more comprehensive snapshot of superannuation income (at aggregate state/territory level) can be obtained from the ABS Survey of Income and Housing - see Household Income and Wealth, Australia, 2013-14. Other income (excluding Government pensions and allowances) 22 Other income (excluding Government pensions and allowances) comprises income items reported on the individual income tax return that were not allocated to one of the above categories. For example, Other income can include transfer or trust income, controlled foreign company income, net foreign pension and annuity income, and foreign investment and life assurance income. Other income (excluding Government pensions and allowances) includes the following data items on the individual income tax returns:
23 As indicated, Government pensions, benefits or allowances are excluded from the ABS income data and do not appear in Other income or Total income. Pension recipients can fall below the income threshold that necessitates them lodging a tax return, or they may only receive tax free pensions or allowances. Hence they will be missing from the personal income tax data set. Recent estimates from the ABS Survey of Income and Housing (which records Government pensions and allowances) suggest that this component can account for between 9 to 11% of Total income. Total income (excluding Government pensions and allowances) 24 Total Income is the sum of all income derived from Employee income, Own unincorporated business, Superannuation and annuities, Investments and Other income (excluding Government pensions, benefits or allowances), as defined above. INCOME DISTRIBUTION INDICATORS Gini coefficient
26 The Gini coefficient is provided here for total income (excluding Government pensions and allowances). This is a single statistic that lies between 0 and 1 and is a summary indicator of the degree of inequality in income between members of the tax form lodging population. Values closer to 1 represent greater inequality. 27 The Gini coefficients shown in this publication can be regarded as indicative but not definitive. They should not be directly compared with apparently similar ABS information at state/territory level, as per Household Income and Wealth, Australia, 2013-14. The Gini coefficients presented in this publication are also calculated from gross personal income and not from equivalised disposable income as presented in Household Income and Wealth, Australia, 2013-14.There is also an acknowledged under-coverage of certain income groups in taxation data due to tax exemptions, and people being under the tax free threshold. For instance, persons aged 60 years and over who are mostly dependent on superannuation income and those mostly reliant on government pensions and allowances may be missing from the tax data. 28 From another perspective, the coefficients have been included to demonstrate the finer regional data capability afforded by the ATO personal income tax data set. The majority of sample surveys with an income aspect cannot support the production of reliable estimates for granular geographies such as SA2, SA3 or LGA. Percentiles 29 Personal income data derived from the taxation dataset are presented in percentiles. When all persons in the tax form lodging population are ranked from the lowest to the highest based on a common characteristic such as total income, they then can be divided into equal sized groups. Division into 100 groups gives percentiles. For example, the highest value of the characteristic in the twentieth percentile is denoted P20. The median or top of the 50th percentile is denoted as P50. P20, P50 and P80 denote the highest values in the 20th, 50th and 80th percentiles respectively. Ratios of values at the top of selected percentiles, such as P80/P20, are termed percentile ratios. 30 Percentile ratios summarise the relative distance between two points in a distribution. To illustrate the full spread of an income distribution, percentile ratios often present points near the extremes of the distribution, for example as a P80/P20 ratio. However, for personal income tax data, the P80/P20 ratio is thought to better illustrate the magnitude of the range within which the income of the majority of people fall. The P80/P50 and P50/20 ratios focus on comparing the ends of the income distribution with the midpoint. Medians 31 Median income is that level of income which divides the units in the reference population into two equal parts, one half having incomes above the median and the other half having incomes below the median. Quartile 32 Quartiles are groupings that result from ranking all persons who lodged tax returns in ascending order according to total income, and then dividing them into four equal groups, each comprising 25% of the reference population. In this publication Australia's quartile ranges are used to compare the income distributions of regions to Australia. Income share 33 Income share (% of income held by the top 1%, 5% and 10% of all earners, per region) has also been produced. The aggregate income of the units in each percentile is divided by the overall aggregate income of the entire population to derive income shares. Main Source of Income 34 Main source of income is the source from which a person derives most of their income. In this publication, main source of earners is presented as a proportion of the population in that region. 35 If a region is particularly reliant on one source, it may be susceptible to policy or economic changes that affect that income type - hence the inclusion. Where persons receive exactly the same amount across multiple sources of income, they have been excluded from the derivation of this indicator. Persons with negative or nil income total income have also been excluded. Median Age of Earners 36 Median age by income type has been provided for all geographies in this publication. See paragraph 31 for explanation of medians. Counts of individuals 37 Individuals may receive income from a number of sources. Also, net income from a specific source may be positive or negative. For example, an individual may have positive income from Employee income yet negative net income from Investment income. The number of individuals for each income source includes all persons with either positive or negative net income from that source. 38 Readers should note that the total number of individuals in receipt of income from at least one source cannot be calculated as the sum of the individuals in each income category, since people can have more than one source of income in any given year. For example, an individual could derive income from multiple sources such as Employee income, investments and their own unincorporated business and thus contribute to the regional person count in all three income categories. DATA CONSIDERATIONS 39 There are several considerations that users should be mindful of when interpreting the ATO data. See paragraphs 40 and 41 below. Overall, these considerations are not seen as being so severe that they would lead to the production of misleading information. Nonetheless, readers are advised to take them into account when analysing the results. 40 Generally, the ATO considers someone to be an Australian resident for tax purposes if they have either always lived in Australia or have come to Australia to live permanently, or they have been in Australia for more than half of the financial year (unless their usual home is overseas and they don't intend to live in Australia), or they have been in Australia continuously for six months or more and for most of that time have been in the one job and living in the same place, or they are an overseas student enrolled in a course of study for more than six months duration. 41 For the purposes of providing statistical measures for the entire population, the ATO database has some limits to its coverage. As indicated previously, persons who receive an income below certain levels are not necessarily required to lodge a tax return. This can include persons who derive their income from Government pensions and allowances. Consequently, the coverage of low income earners, including people receiving government pensions and allowances, is incomplete in ATO records. In addition, some Commonwealth of Australia Government pension, benefit and allowance payments are exempt from income tax and are therefore do not need to be reported in tax returns. As such, the ATO data should be regarded as an indicative though not complete picture of all individual income earned in Australia. Non-lodgers 42 Some individuals may not lodge a tax return, this population may have income that is in scope of this publication and as such their absence should be taken into consideration. For the first time the ABS has been able to access data from payment summaries. The payment summaries data is cross checked against income tax returns to see if the data has been declared. If it has not been declared, the data from the payment summary is added to the aggregate income figures for each individual region, and is also used in calculating mean and median employee and total incomes. 43 As payment summaries only contain limited data, it is only used purely to fill the gap with employee and total incomes. The payment summary data is not used where certain demographic or employment characteristics are needed e.g. occupation, age, and sex. Hence, non-lodgers are not used in the cross classified datacubes: Employee Income by Age and Sex, Employee Income by Occupation and Age, Employee Income by Occupation and Sex. Processing of tax returns 44 The data presented in this publication were compiled before the processing of all income tax returns for any given year may have been completed. Data provided to the ABS by the ATO are from returns processed up to 31 October, 16 months after the end of the financial year. Any returns lodged after this date are not included. For example, returns processed after 31 October 2014 are not included in the estimates for the 2012-13 financial year presented in this publication. 45 Because of the late lodgement of tax returns in any tax reference year, the data provided in this report underestimates the total taxable income for any given financial year. It is estimated that up to 5-6 per cent of tax returns for any reference year are lodged 3-4 years later. Changes in taxation policy 46 Users of the data should note that there may be taxation policy changes that will influence the lodging of tax returns, as well as the amounts declared. One change that may impact the data is the increase of the tax-free threshold of $6,000 to $18,200 for the 2012-13 financial year, this may result in less people needing to lodge a tax return. The ABS strongly encourages users of the data to research policy changes that may impact in the comparability of the data year to year. For more information on taxation policy change, the ATO publishes changes in their Taxation Statistics publications. CONFIDENTIALITY 47 All individual income tax statistics have been provided by the ATO in form and then geocoded to Statistical Area Levels 1, 2, 3 & 4 and Local Government Areas. 48 To minimise the risk of identifying individuals in aggregate statistics, a confidentialisation process called perturbation has been applied to the data. Perturbation involves small random adjustment of the statistics and is considered the most satisfactory technique for avoiding the release of identifiable statistics while maximising the range of information that can be released. These adjustments have a negligible impact on the underlying pattern of the statistics. Some cells have also been suppressed due to low counts. 49 Apparent outlier values are treated to ensure more coherent data (less skewed values) at the regional level. Other additivity features (e.g. totals may not exactly match the sum of components) also reduce the risk of deducing real values. COMPARISON WITH OTHER ABS INCOME DATA 50 The ABS Survey of Income and Housing (SIH) collects information on sources of income, amounts received and the characteristics of persons aged 15 years and over resident in private dwellings throughout Australia. Some data on income earned by children is also captured. Since 2003-04, SIH has been conducted biennially, with the most recent snapshots being the 2009-10, 2011-12 and the 2013-14 income years. Additional SIH estimates of annual income are produced for the survey gap years. Hence, SIH produces both estimates of current income as well as estimates of annual income with respect to the previous financial year. The latter source has been used to create the comparison of SIH household income with ATO personal income data, for 2012-13, shown in Table 1, below. For further information about the concepts, definitions, methodology and estimation procedures used in SIH, please refer to Survey of Income and Housing, User Guide (cat. no. 6553.0). 51 SIH employee income includes all payments received by individuals as a result of their current or former involvement in paid employment. In addition to the regular and recurring cash receipts captured by SIH, employee income also includes non-cash benefits, bonuses, termination payments and payments for irregular overtime. Details of the composition of employee income derived from ATO sources are provided in Explanatory Note 14 (above). 52 Table 1 below presents a selection of reasonably comparable income data items, sourced from ATO and the SIH, for 2011-12 and 2013-14.
53 Differences in collection methodologies, data collection/extraction periods, definitions, scope/coverage etc., can all contribute to variations between EoPI and SIH income data. Also, as mentioned before, SIH presents data for low income households whereas the EoPI series may be missing some individuals with low incomes (for example those under the $18,200 tax free threshold) because they may not need to lodge tax returns. Please see the Quality Declaration in the publication for more information about coherence. 54 Since changes were applied to the reporting superannuation income in 2007 (see paragraphs 20-21), the SIH estimate is thought to provide a more accurate, complete indication of the level of income derived from Superannuation and annuities. However, SIH estimates only include superannuation pension streams and not superannuation lump sum payments. STATISTICAL GEOGRAPHY 55 All geographic variables are based on the individual's residential address as stipulated on the income tax return, or for non-lodgers, the address listed on the payment summary.
56 The Australian Statistical Geography Standard (ASGS), July 2016, is used by the ABS for the collection and dissemination of geographically classified statistics. 57 The ASGS is an essential reference for understanding and interpreting the geographic context of statistics published by the ABS and its use enables comparability across datasets. The ASGS has been implemented by the ABS, in part, to obtain more consistency in population size across similar region types, to achieve more data stability and continuity and thereby minimise the need for annual geographic review and change. 58 Further information - including access to ASGS boundaries which underpin the data presented in this publication - can be accessed from Australian Statistical Geography Standard (ASGS): Volume 1 - Main Structure, July 2016. Geographic regions
59 The statistics in this release are presented according to the Australian Statistical Geography Standard (ASGS), July 2016. Under this classification, statistical areas are defined as follows:
60 Further information regarding the ASGS regions, including the detailed classification, metadata, maps and downloadable boundary files, can be accessed from the ABS Statistical Geography Portal on the ABS website. 61 Details of income earners from regions unknown (not stated or indeterminate), or who are lodging returns from overseas, have been classified as such and included in the totals shown. Therefore, the totals shown for Australia may not necessarily be the sum of all state and territory totals. 62 The sum of sub state geographies (GCCSA, SA4, SA3, SA2 and LGA) may not equal the state estimates due to some records having inadequate address information to be geocoded. Where a record was unable to be geocoded to an SA2, it has not been included in totals for SA2 right through to GCCSA. However, where possible, these records have been included in the state and Australia totals.
63 Confidentiality rules have been applied to the estimates to ensure there is no likely risk of individuals in the aggregate statistics presented in this publication. Therefore, the sum of sub-state estimates may also not equal state estimates due to some regions being suppressed through the confidentialising process.
FURTHER INFORMATION 65 For further information about these and other statistics, please contact the National Information and Referral Service on (Phone) 1300 135 070 or Email regional.statistics@abs.gov.au. For example, some of the data published in this catalogue can also be produced for Commonwealth Electoral Division regions, on a consultancy basis. Sub-SA2 data cannot be provided, however, because of confidentiality limitations. Document Selection These documents will be presented in a new window.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
