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8 Household collections conducted by the ABS which cover housing for Aboriginal and Torres Strait Islander people are:
9 Care should be taken when comparing data from the different sources due to the different methodologies used in these collections.
CHANGES IN THIS ISSUE
10 The key change in 2017–18 compared with 2015–16 is:
Refer to the 'Explanatory Notes' of Household Income and Wealth, Australia (cat. no. 6523.0) for details on other changes to the 2017–18 SIH.
11 To protect the confidentiality of individuals, a technique called perturbation is used to randomly adjust cell values. 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.
12 After perturbation, a given published cell value will generally be consistent across all tables. However, adding up cell values to derive a total will not necessarily give the same result as published totals.
13 The introduction of perturbation in publications ensures that these statistics are consistent with statistics released via services such as Table Builder.
CONCEPTS AND DEFINITIONS
14 The concepts and definitions relating to the statistics in this publication are described in the following section of this publication. Other definitions are available from the ‘Glossary’ section of this publication.
15 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.
16 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.
17 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.
18 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.
19 Income includes receipts from:
20 Receipts of Family Tax Benefit are treated as income, regardless of whether they are received fortnightly or as a lump sum. The Newborn Supplement and Newborn Upfront Payment replaced the Baby Bonus on 1 March 2014 and those eligible receive it as part of their Family Tax Benefit Part A payments for a period of 13 weeks or with their lump sum. The Paid Parental Leave payments have also been included as income.
21 The Energy Supplement is included in income from government pensions or allowances. This tax-exempt, indexed payment is paid to pensioners, other income support recipients, families receiving Family Tax Benefit payments and Commonwealth Seniors Health Card holders, provided they meet eligibility requirements.
22 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. The change in income level in 2007–08 is partly due to the change in methods but also partly due to real change in income. To the extent possible, the estimates for 2003–04 and 2005–06 shown in the time series tables also reflect the new treatments.
23 For more information on the nature and impact of changes to income data, see Appendix 4 of Household Income and Income Distribution, Australia, 2007–08 (cat. no. 6523.0).
24 Gross income is the sum of income from all sources before income tax and the Medicare levy have been deducted.
25 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. 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).
26 Income tax liability is estimated for all households using taxation criteria for the relevant financial year and the income and other characteristics of household members reported in the survey (such as private health insurance fund membership).
27 Prior to 2005–06 the derivation of disposable income also included the addition of Family Tax Benefit (FTB) paid through the tax system or as a lump sum by Centrelink. For practical reasons it was not included in the gross income estimates. From 2005–06 to 2013–14, FTB amounts were modelled for some households where amounts were not reported by the respondents. These amounts are not included in gross or disposable income from 2015–16. The introduction of a new model in 2015–16 for micro-editing government payments includes modelling of FTB values. These have been utilised where the reported amount was missing, significantly above the maximum eligible amount or where other payments, related to FTB, were reported by survey respondents, such as single parents with children under 8 years who receive Parenting Payment. More information about the effect of this change is available in the User Guide.
Equivalised disposable income
28 Most analyses in this publication use equivalised disposable household income rather than gross or disposable income. Using an equivalising factor for household income enables the direct comparison of the relative economic wellbeing of households of different size and composition (for example, lone person households, families and group households of unrelated individuals).
29 Equivalised disposable household income is calculated by adjusting disposable income by the application of an equivalence scale. The scale is based on the principle that larger households require a higher level of income to achieve the same standard of living as a smaller household. However, there are economies of scale, so each additional person does not equally add to the income needed to support household consumption.
30 Whereas disposable income includes negative values, these are adjusted to zero for the purpose of equivalised disposable household income.
31 After 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.
32 It is the number of people who belong to households with particular characteristics, rather than the number of households with those characteristics, that is of primary interest in measuring income distribution and leads to the preference for the equal representation of those persons in such analysis. For example, if the person is used as the unit of analysis rather than the household, then the representation in the income distribution of each person in a household comprising four persons is the same as that for each person in a two person household. In contrast, if the household were to be used as the unit of analysis, each person in the four person household would only have half the representation of each person in the two person household.
33 For that reason, in this publication wherever equivalised disposable household income quintiles are presented they are calculated with respect to persons, including children. Such measures are sometimes known as person weighted estimates. They are described in more detail in the User Guide. Nevertheless, as most of the relevant characteristics of persons relate to their household circumstances, the tables of this publication are of households rather than persons. Hence, each quintile of equivalised disposable household income is not 20% of households but rather estimates the proportion of households that contains the 20% of persons in each quintile.
34 For more information on equivalised income, see the User Guide.
Lower income households
35 Lower income households are generally defined in this publication as those containing the 38% of people with equivalised disposable household income between the 3rd and 40th percentiles, and excluding the 1st and 2nd percentiles. The 1st and 2nd percentiles are excluded as some households in these percentiles exhibit high wealth and expenditure characteristics and income types other than employee income and government pensions and allowances. An exception to this definition of lower income households is in data cube 21. Rental Affordability, Lower Income Renter Households, National Housing and Homelessness Agreement basis. See the appendix: National Reporting of Rental Affordability Measures, for details of that definition.
36 This definition of lower income households differs from that used in the Household Income and Wealth publication (6523.0) in which low income households are defined as households in the lowest income quintile excluding the 1st and 2nd percentiles. For more information on the definition employed in that publication see that publication's Explanatory Notes especially paragraphs 29–35, 'Lowest income decile'.
37 Equivalised income generally provides a useful indicator of economic wellbeing. However, some households report extremely low and even negative income in the survey. Households may under report their incomes in the survey at all income levels, including low income households. Households may also correctly report low levels of income if they have incurred losses in their unincorporated business or have negative returns from other investments.
38 Some of the households included in the lowest two income percentiles are unlikely to be suffering extremely low levels of economic wellbeing. Income distribution analysis may lead to inappropriate conclusions if such households are used as the basis for assessing low levels of economic wellbeing.
Housing costs and household income
42 As housing costs are usually a major component of total living costs they are often analysed in relation to income, and referred to as a housing affordability ratio. In data cube 4, Housing Costs as a Proportion of Income (available in the downloads page of this product), we calculate this in two ways. In table 4.1 the housing costs of a group (cell in the table) are summed, and divided by the summed gross weekly household income of that group of households. This is called housing costs as a proportion of gross household income. Table 4.2 presents the median ratio of all of the households' ratios of housing costs to gross weekly household income for that group of households (or cell in the table). These ratios are expressed as percentages.
43 However, comparisons using these measures are subject to the limitations of housing cost estimates obtained in the SIH as described in the 'Housing Costs' section of these Explanatory Notes. Housing affordability ratios derived from SIH data are further impacted by the inclusion of Rent Assistance (RA) in the value of income collected. RA is estimated, on average, to represent about 5% of the reported income of households receiving RA, in 2017–18. To illustrate, 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 RA of $35 per week. In Housing Occupancy and Costs, 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 to income ratio of 25%. The housing costs to income ratio for the latter household would be derived as 31%. However, if RA receipts are excluded from both housing costs and income the housing costs to income affordability ratio for the latter couple is also 25%, highlighting that there is no effective difference between the housing costs or income situation of the two couples. The treatment of RA is of particular importance when considering changes in housing affordability ratios over time, since there has been a shift from providing public housing to providing RA as a means of supplying affordable housing to lower income households.
44 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 benefit from 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 to income ratio. Therefore, relatively high housing costs to income ratios are of greater concern with respect to larger households than smaller households. This should be kept in mind when comparing such ratios across different household sizes.
45 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 savings.
46 It is commonly assumed that higher income households have more capacity both to choose the proportion of their income spent on housing, as well as to bear a higher proportion without this negatively affecting their ability to pay for other costs of living, unlike lower income households, who are assumed to have less choice and capacity in this regard. Consequently, housing affordability ratios expressed in ranges are most commonly presented for lower income households only.
47 Households with relatively low income and housing costs greater than a certain percentage of income, commonly 30%, are sometimes said to be in "housing stress". However, such a conclusion cannot always be reliably drawn from such an indicator, which should be interpreted with care, for the reasons described in the previous paragraphs.
48 With the above caution in mind, data cube 5, table 5.2, does present estimated proportions of lower income households in a number of ranged categories of housing costs as a proportion of income, cross-tabulated with selected household classifications, as follows:
49 For comparison purposes, a similar table presenting proportions of all households (except those with nil or negative income) in the above housing costs as a proportion of income ranges appears in table 5.1.
50 In this issue, households with nil or negative income have generally been excluded from calculations of housing costs as a proportion of gross income. In the 2017–18 SIH, these households made up 0.4% of all households.
51 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 measure presented in this publication is based on the Canadian National Occupancy Standard (CNOS).
52 The CNOS is sensitive to both household size and composition in determining housing requirements. The measure assesses the bedroom requirements of a household by specifying that:
53 Households living in dwellings where this standard cannot be met are considered to be overcrowded. The CNOS can also be used to derive an estimate of spare bedrooms based on household composition and number of bedrooms.
Tenure type and landlord type
54 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 with a mortgage or a loan secured against it, is paying rent to live in the dwelling or has some other arrangement to occupy the dwelling.
55 In this publication, tenure information is provided at the household level. Person level and income unit level tenure were also enumerated in 2017–18 SIH and are available on the confidentialised unit record file (CURF). Tenure information at household, income unit and person levels enables users to analyse within household tenure arrangements, such as subletting and boarding.
56 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.
57 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.
58 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.
59 'Usual residents' excludes:
60 Information for each household was collected using:
61 Sample copies of the above collection tools are included in the User Guide.
62 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.
63 For the 2017–18 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.
64 Of the selected dwellings there were 23,049 households in the scope of the survey. Of this initial sample, 3,967 dwellings (17%) were excluded as no contact was able to be made (e.g, vacant dwelling, holiday homes). A further 5,022 (22%) did not respond at all to the questionnaire, or did not respond adequately. Most of these were not able to take part in the survey during the collection period. Other reasons included:
65 357 households were excluded because the main income earners in the household did not adequately respond to questions about income sources and amounts.
Partial response and imputation
66 Partial imputation is completed for all households with missing data items. 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 SIH sample includes 3,745 households (27% of households) and 9,946 person records (30% of persons aged 15 years or over) which had at least one imputed value. Of all the relevant items (continuous variables), 4.1% of values were imputed. This is slightly higher than SIH 2015–16 where HES was jointly collected (3.5%) and similar to the last SIH only cycle 2013–14 (3.9%).
68 Of the selected dwellings (19,082) that were contacted and in scope of the survey, 14,060 (74%) households 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). 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.
70 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 2017–18 are built up from the 2016 Census.
71 In the 2017–18 SIH, as in 2007–08, 2009–10, 2011–12, 2013–14 and 2015–16, 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.
72 The benchmarks used in the calibration of the final weights for the 2017–18 SIH were:
73 Estimates produced from the survey 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 most detailed data were only collected for people 15 years and older.
74 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.
75 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. The User Guide 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
76 The estimates provided in this publication are subject to two types of error, non-sampling and sampling error.
77 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.
78 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 editing and quality control procedures during data processing.
79 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.
80 The following methods were adopted to reduce the level and impact of non-response:
81 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). In this publication, estimates with an RSE of 25% to 50% are annotated with a cell comment to indicate that the estimate has a high level of sampling error relative to the size of the estimate, and should be used with caution. Estimates with an RSE over 50% are annotated with a cell comment to indicate they are generally considered too unreliable for most purposes.
82 Another measure is the Margin of Error (MoE), which are provided for proportions to assist users in assessing the reliability of these data. Estimates of proportions with an MoE more than 10% are annotated to indicate they are subject to high sample variability and particular consideration should be given to the MoE when using these estimates. Depending on how the estimate is to be used, an MoE greater than 10% may be considered too large to inform decisions. In addition, estimates with a corresponding standard 95% confidence interval that includes 0% or 100% are annotated with a cell comment to indicate that they are usually considered unreliable for most purposes.
83 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.
PRODUCTS AND SERVICES
84 Summary results from the SIH are available in spreadsheet form from the 'Downloads' tab in this release.
85 For users who wish to undertake more detailed analysis you can access SIH microdata products. These include:
Further information about ABS microdata, including conditions of use, and access is available via the Microdata Entry page on the ABS website.
86 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.
88 The Survey of Income and Housing, User Guide, Australia, 2017–18 (cat. no. 6553.0) includes information about the purpose of the survey, the concepts and contents, and the methods and procedures used to collect the data and derive the estimates. It also outlines the differences between the 2017–18 survey and earlier SIH surveys. Its purpose is to help users of the data understand the nature of the survey, and its potential to meet user needs. The User Guide is available from the 'Related Information' tab in this release.
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