In the Survey of Income and Housing (SIH), income refers to regular and recurring cash receipts from employment, investments and transfers from government, private institutions and other households.
Sources from which income may be received include:
- wages and salaries (whether from an employer or own incorporated business), including income provided as part of a salary sacrifice arrangement
- profit/loss from own unincorporated business (including partnerships)
- investment income (interest, rent, dividends, royalties)
- government pensions and allowances
- private cash transfers (e.g. superannuation, regular workers' compensation, income from annuities, child support, and other transfers from other households).
Receipts which are excluded from income because they are not regular or recurring cash payments include the following:
- income in kind including employee benefits such as the provision of a house or a car and employer contributions to pension and superannuation funds. However, income in kind provided as part of a negotiated salary sacrifice arrangement can be regarded as cash or 'near cash' income and included within the scope of cash income
- capital transfers such as inheritances and legacies, maturity payments on life insurance policies, lump sum compensation for injuries or other damage, capital repayment of loans from other households
- capital gains and losses.
More detail on the various components of income are included in Section 1.4 'Components of income'.
Gross income is the sum of income from all sources before income tax and the Medicare levy have been deducted.
Disposable income better represents the economic resources available to meet the needs of households. Disposable income is derived by deducting estimates of personal income tax and the Medicare levy from gross income. Note that while child support and other transfers from other households are included in the income of the households receiving the transfers, they are not deducted from the disposable income of the households making the transfers.
Final income is a measure that takes into account the impact of government social transfers in kind (ie non-cash benefits) and taxes on production on the economic wellbeing of households. It is only derived in years when the Household Expenditure Survey (HES) is run, since it requires detailed information on expenditure patterns. For details see Government Benefits, Taxes and Household Income, Australia, 2003-04 (cat. no. 6537.0).
COMPARISON WITH AUSTRALIAN SYSTEM OF NATIONAL ACCOUNTS
The concepts of income used in SIH have many similarities to the household income definition used in the Australian System of National Accounts (ASNA), but also differ in some respects. A detailed comparison of 1997-98 SIH and ASNA estimates was published as an appendix to the 1997-98 issue of Income Distribution, Australia, 1997-98 (cat. no. 6523.0). Comparison of SIH data from 1994-95 to 2005-06 with ASNA data indicated that the relationship between the two estimates had not changed significantly over that period.