1287.0 - Standards for Income Variables, Jun 2015  
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  • Glossary

GLOSSARY

Annual income
All income obtained from all sources over a period of a year. It can relate to the previous financial year, the last 12 months as at the date of interview, or the current financial year.

Annuities
See Superannuation pensions/annuities.

Assets
Economic resources, both financial and non-financial, owned by the household or its members, and from which economic benefits may be derived by holding or use over a period of time.

Capital transfers
The acquisition or disposal of assets when the receiving party makes no payment to the provider of the asset, for example inheritances, lump sum retirement benefits.

Cash receipts
Money received in the form of currency, negotiable instruments such as cheques, or through electronic transfer on behalf of the recipient.

Child support
Cash transfers from a non-custodial parent.

Conceptual definition of income
See Nominal definition of income.

Current consumption
Services and non-durable consumer goods (i.e. goods which have a single use or an otherwise limited life of less than one year) that are used by persons or households for the direct satisfaction of their individual needs or wants.

Current income
Income received or expected to be received in a given reference period. Depending on the nature of the income item the reference period varies. For regular recurring payments it may be the last payment or pay period before interview. For less regular payments, income in the last three months, or the current financial year may be collected.

Current receipts
See Current income.

Current transfers
Transactions, other than those classified as capital transfers, in which one entity provides a non-durable good (i.e. good with a single use or an otherwise limited life of less than one year), service or cash to another entity without receiving from the latter anything of economic value in return.

Current transfers offset against expenditure
Current transfers that are treated as negative expenditures rather than as income. Examples are gambling winnings and non-life insurance claims.

Decile
A grouping derived by ranking all units households or persons in the population in ascending order according to some continuous variable such as their income, and dividing the ranked population into ten equal groups, each comprising 10% of the population.

Depreciation
The reduction in value of an asset held over time, generally brought about by the use of the asset.

Disposable income
Total or gross income net of income tax and compulsory levies.

Dividends
Gross income received from investments such as the ownership of shares. Includes dividends reinvested and franking credits.

Employee
A person who:

  • works for a public or private employer and receives remuneration in wages, salary, a retainer fee from their employer while working on a commission basis, tips, piece rates or payment in kind, or
  • operates his or her own incorporated enterprise with or without employees.

Employee income
A person's total remuneration, whether monetary or in kind, received in return for labour from an employer or from a person's own incorporated business. It comprises wages and salaries, bonuses, amounts salary sacrificed, non-cash benefits such as the use of motor vehicles and subsidised housing, and termination payments.

Employers' social contributions
Payments by employers to social insurance schemes for the benefit of their employees. Includes employers' contributions to workers' compensation insurance, superannuation schemes and the provision of subsidised social infrastructure such as employer owned social centres, medical facilities, etc.

Employment income
Income earned by employees and by self-employed persons in their own incorporated or unincorporated businesses.

Equivalised total household income
Total household income that has been adjusted using an equivalence scale. Equivalence scales are used to adjust the actual incomes of households in a way that enables the analysis of the relative wellbeing of people living in households of different size and composition. Also see Modified OECD equivalence scale.

Family
Two or more persons, one of whom is at least 15 years of age, who are related by blood, marriage (registered or de facto), adoption, step relationship or fostering, and who are usually resident in the same household. The basis of a family is formed by identifying the presence of a couple relationship, lone parent-child relationship or other blood relationship. Some households will, therefore, contain more than one family.

Final income
Disposable income plus government social transfers in kind, less taxes passed on to households in the prices paid for goods and services (also referred to as taxes on production).

Financial support from family members not living in household
Receipts, whether monetary or in kind, received from family members not living in the recipient's household.

Gini coefficient
A single statistic that lies between 0 and 1 and is a summary indicator of the degree of inequality in a measure of economic resources (e.g. income or wealth) between statistical units in a population. Values closer to 0 represent a lesser degree of inequality, and values closer to 1 represent greater inequality.

Government pensions and allowances
Income support payments from government to persons under social security and related government programs. This includes pensions and allowances received by aged, disabled, unemployed and sick persons, families and children, veterans or their survivors, and study allowances for students. Also includes overseas pensions and benefits, although some may not be paid by overseas governments. One-off payments to support current consumption are also included, such as carer’s lump sum payments, Newborn Upfront Payment, and Child Disability Assistance Payment paid to recipients of Carer Allowance.

Government social transfers in kind
Non-cash benefits and services provided by the government to households for education, health, housing, social security and welfare. It includes reimbursements of approved expenditures for goods and services such as the Medicare Rebate, the Private Health Insurance Rebate, the Child Care Benefit and the Child Care Rebate.

Gross income
See Total income.

Holding gains or losses
Holding gains or losses refer to changes in the value of financial and non-financial assets and liabilities over a reference period. A holding gain, the result of an increase in the value of assets or a reduction in the value of liabilities, increases the net worth of the owner's assets while a holding loss has the opposite effect.

Household
One or more persons, at least one of whom is at least 15 years of age, usually resident in the same private dwelling.

Household collections
Surveys, censuses or administrative data sets containing information about persons, income units, families or households.

Household income
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 by the household.

Household production of services for own consumption
Services provided by use of owner-occupied housing, i.e. imputed rent, and by unpaid household work.

Imputed rent
The flow of household consumption services conferred by home ownership. Gross imputed rent is the estimated market rent that a dwelling would attract if it were to be commercially rented. Net imputed rent is gross imputed rent less the housing costs normally incurred by landlords. Imputed rent can also be estimated for households paying subsidised rent or occupying their dwelling rent-free.

In kind income
Receipts other than cash receipts (as defined), including goods and services, use of a vehicle, and subsidised housing or other non-cash benefits.

Income
See Household income.

Income unit
A group of two or more people who are usually resident in the same household and are related to each other through a couple relationship and/or parent/dependent child relationship, or a person not party to either such relationship. Income sharing is assumed to take place within married (registered or de facto) couples, and between parents and dependent children.

Incorporated business
A business enterprise possessing a separate legal entity from its owners, limiting their liability for any action or inaction of the corporation. The outright owner of an incorporated business is seen as an employee of that business and their remuneration is classified as Employee income.

Interest
Gross receipts accrued from deposits (including term deposits) with financial institutions and receipts (excluding principal repayments) from loans to persons in other households.

Investment income
Receipts that arise from the ownership of assets that are provided to others for their use. It comprises returns from financial assets (for example, interest and dividends), from physical assets (rents) and from intellectual assets (royalties). Investment income is also referred to as property income.

Liabilities
Obligations or debts owed to another person or company, including bank loans and accounts payable.

Main source of income
The source from which a person, income unit, family or household receives the greatest amount of income, both monetary and in-kind. If total income is nil or negative the main source is undefined. As there are several possible sources, the main source may account for less than 50% of total income.

Modified OECD equivalence scale
A scale used to calculate equivalised household income. The first adult in the household has a weight of one point, each additional person who is 15 years or older is allocated 0.5 points, and each child under 15 years is allocated 0.3 points. The sum of the equivalence points derived for the household is divided into total household income to calculate equivalised income.

Monetary
Money in the form of currency, negotiable instruments such as cheques, or electronic transfer of funds.

Negative income
Income may be negative when a loss accrues to a household as an owner or partner in unincorporated businesses, rental properties, or other investment income. Losses occur when interest paid, other operating expenses and depreciation exceed the gross receipts. Excludes capital losses incurred from the sale of assets.

Net worth
The value of a household's assets (both financial and non-financial) less the value of a household's liabilities. Net worth is negative when household liabilities exceed household assets.

Nominal definition
A definition that states what should, in principle, be included/excluded in a comprehensive measure of income, without regard to the feasibility of capturing the information required.

Non-cash income
See In kind income.

Operating expenses
The expenses incurred in deriving income from an unincorporated enterprise or rental property, including wages and salaries paid to employees, interest, rent, indirect taxes, and repairs and maintenance costs.

Operational income measures
Income items that are actually measured and contribute to income estimates. These are more limited in scope than the conceptual definition of income, due to data availability constraints and other operational considerations.

Payments from accident/sickness insurance
Payments from income protection insurance or life insurance annuities. Excludes workers' compensation payments from compulsory employer schemes.

Person
Individual members of households.

Private income
Total income less all benefits received from government, both monetary and in kind.

Production of household services for own consumption
Activities undertaken by a household that could be purchased in the market place. Includes unpaid domestic services such as cleaning, and the use of household assets such as houses and consumer durables such as fridges and televisions. See also Imputed rent.

Profit/loss
The net receipts of an enterprise after deducting operating expenses and the value of depreciation of assets used in production. The concept also applies to income from rental properties.

Property income
See Investment income.

Quantile
A grouping derived by ranking all units in the population in ascending order according to some continuous variable such as their income and dividing the ranked population into equal groups, each comprising a given equal percentage of the population. See, for example, Decile and Quintile.

Question module
A set of questions designed to collect data for the measurement of a particular variable or group of related variables.

Quintile
A grouping derived by ranking all units in the population in ascending order according to some continuous variable such as their income and dividing the ranked population into five equally sized groups, each comprising 20% of the population.

Rental income
Profit or loss from rental properties after expenses such as interest, land rates, insurance and repairs and maintenance costs are deducted.

Royalties
Payments made to the owners of intellectual property rights in return for the right to use the intellectual property.

Scholarships
Payments to students other than those paid as part of a government income support program, i.e. Youth Allowance, Austudy and ABSTUDY. Includes scholarships provided by government funded educational institutions.

Self-employment income
The profit or loss that accrues to persons as owners of, or partners in, unincorporated businesses. Profit or loss consists of the value of gross output of the business after the deduction of operating expenses and depreciation. It excludes profits from capital investments of partners who do not work in these enterprises, that is, silent partners. Losses occur when operating expenses are greater than gross receipts and are treated as negative income.

Source of income
The variable that classifies persons, income units, families and households according to the sources from which the unit receives income.

Statistical unit
The basic unit for which information is sought and for which statistics are compiled. The main statistical units for income data are: person, income unit, family, and household.

Superannuation pensions and annuities
Receipts from superannuation funds and other retirement investment plans. Excludes retirement benefits paid as a lump sump.

Total income
Total (or gross) income, is the sum of income from all sources, whether monetary or in kind, before income tax, the Medicare Levy and the Medicare Levy surcharge are deducted.

Transfers
Income, both monetary and in kind, which are not paid as a return for labour or the use of capital. Includes government pensions and allowances, and transfers from private organisations such as charities and other households.

Transfers from non-profit institutions
Money, goods and services provided free or at a subsidised rate to households by charities and other organisations whose status does not permit them to be a source of profit to the units that establish or control them.

Transfers from other households
Money, goods and services provided free or at a subsidised rate to households by private individuals who do not reside with the recipients. This includes child support, financial support from family members not living in the household, regular receipts from trust funds, and any other transfers from other households.

Unincorporated business
A business enterprise that is not recognised as a separate legal identity from its owners, who bear full liability for any action or inaction of the business.

Unincorporated business income
See Self-employment income.

Usual income
The income usually received around the time of a given reference period. Where there is significant variation from period to period, it is sometimes necessary to take an average of all receipts over a longer period; for example, the average of the three payments before interview.

Workers' compensation payments
Payments to workers injured as a result of their employment to compensate for foregone earnings and to meet ongoing medical costs.