1287.0 - Standards for Cash Income Statistics, 1997  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 19/12/1997   
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CLASSIFICATION AND CODING

59. 'Total cash income' is a continuous variable typically analysed and output in quintiles or deciles, as discussed in the section on Classification and coding in the standard for the variable 'Total cash income'.

60. 'Sources of cash income' and 'Principal source of cash income' are classified to the Standard classification of sources of cash income. This is a three level hierarchical classification and is described in detail in the following sections.


THE CLASSIFICATION CRITERIA

61. Classification criteria form the basis for grouping observations according to their characteristics and for distinguishing categories from each other.

62. Cash income may be received from employment (Employee cash income), as a profit or loss from an unincorporated enterprise (Unincorporated business cash income), from the ownership of assets (Property cash income). Income may also be derived from current transfers from government (pensions and benefits) or from private sources, such as superannuation funds. An individual may receive cash income from more than one source.

63. At the top level of the Classification of sources of cash income, sources of regular cash receipts are classified according to whether they are:

  • the person or organisation that employs the recipient, including their own incorporated business
  • the recipient's own unincorporated business
  • a government instrumentality making regular cash transfers under a program for providing such payments to eligible persons
  • any other source

64. At the second level, Government cash pensions and allowances are distinguished by whether they are targeted to recipients whose entitlement is determined:
  • on the basis that they are students or unemployed persons
  • on the basis that they are aged persons or persons with a disability paid under a Centrelink program
  • on any other basis

These categories reflect the practice in HES output. documented in ABS 2000, p. 51.

65. Other cash income is further classified at the second level on the basis of whether the receipts are:
  • cash returns for 'lending of assets' (i.e. Property cash income)
  • regular remittances from a superannuation fund or annuity
  • regular transfer payments from a private organisation
  • regular transfer payments from another household
  • any other regular cash transfer

66. At the base level of the classification, specific, named Government cash pensions and allowances each have their own code. Two digits are allocated to allow for the provision of a new code for each new payment. These categories are updated in line with changes in payment types as they occur.

67. Property cash income is further classified on the basis of whether the regular payments arise from:
  • interest on deposits in financial institutions
  • dividends for investment in public companies
  • rent for use of property
  • royalties for use of intellectual property
  • 'lending' of any other asset

68. Transfers from private organisations are classified at the base level as:
  • receipts from workers compensation, accident or sickness insurance
  • non-government scholarships or study allowances
  • any other transfer from a private organisation

69. Transfers from other households are classified at the bottom level as:
  • receipts from a non-custodial parent
  • receipts from other non-resident relatives
  • any other transfer from another household


THE STANDARD CLASSIFICATION AND CODE STRUCTURE

70. This section presents the Standard classification of sources of cash income and the associated code structure at the broad (one-digit), narrow (two-digit) and detailed (four-digit) levels.

Broad level

1 Employee cash income
2 Unincorporated business cash income
3 Government cash pensions and allowances
9 Other cash income

Narrow level

1 Employee cash income
11 Employee cash income
2 Unincorporated business cash income
21 Unincorporated business cash income
3 Government cash pensions and allowances
31 Allowances for students and the unemployed
32 Centrelink pensions for the aged and persons with a disability
39 Other Government cash pensions and allowances
9 Other cash income
91 Property cash income
92 Superannuation/annuities
93 Transfers from private organisations
94 Transfers from other households
95 Scholarships
99 Other cash income nec

Detailed level

1 Employee cash income
11 Employee cash income
1101 Employee cash income
2 Unincorporated business cash income
21 Unincorporated business cash income
2101 Unincorporated business cash income
3 Government cash pensions and allowances
31 Allowances for students and the unemployed
3101 Newstart allowance
3102 Youth allowance
3103 Mature age allowance
3104 Sickness allowance
3105 Austudy payment
3106 ABSTUDY payment
32 Centrelink pensions for the aged and persons with a disability
3201 Age pension
3202 Disability support pension
39 Other Government cash pensions and allowances
3901 Family Tax Benefit (Parts A and B)
3902 Parenting Payment
3903 Double Orphan Pension
3904 Carer Allowance
3905 Wife Pension
3906 Bereavement Allowance
3907 Widow Allowance (Widow B Pension)
3908 Carer Payment
3911 Service pension (DVA)
3912 Disability pension (DVA)
3913 Partner Allowance
3914 War Widow's Pension (DVA)
3915 Special Benefit
3916 Mobility Allowance
3917 CDEP Participant Supplement
3918 Pensions and allowances from overseas governments
3999 Other Government cash pensions and allowances nec
9 Other cash income
91 Property cash income
9101 Interest
9102 Dividends
9103 Rent
9104 Royalties
9199 Property cash income nec
92 Superannuation/annuities
9201 Superannuation/annuities
93 Transfers from private organisations
9301 Workers' Compensation/Accident/Sickness Insurance
9399 Transfers from private organisations, nec
94 Transfers from other households
9401 Child Support
9402 Gifts from relatives
9499 Cash transfers from other households, nec
95 Scholarships
99 Other cash income nec
9999 Other cash income nec

Sources of cash income - Definitions of categories

71. Identification (and classification) of the various sources of cash income is useful for both the collection and analysis of 'Total cash income'. This section provides definitions and some explanatory material for each category. Each of the standard source categories is also defined in the Glossary.
    1 Employee cash income
    Gross current usual cash payments from an employer or own limited liability company, including wages or salary, tips, piece rates, penalty rates, loadings, regular bonuses, payment for time not worked (e.g. sick leave, public holidays) and directors' fees.

    Employee cash income comprises the cash component of the 1973 ILO definition of earnings (International Labour Office 1979, pp. 23-24; International Labour Office 1973, p. 52; Hussmanns, R., Mehran, F. & Verna, V. 1990, p. 353). Employer contributions to superannuation or pension schemes are excluded.

    Wages and salaries comprise the bulk of employee income which is often abbreviated as wages and salaries. However, employee income also includes: tips, commissions and regular bonuses; other profit sharing bonuses; piecework payments; payment for recurring odd jobs and casual work; penalty payments and shift allowances; directors' fees for working directors; remuneration for time not worked such as holiday pay, sick pay, pay for public and other holidays and other paid leave; worker's compensation paid by the employer; and leave loading.

    An employee may receive cash income from an employer or from his or her own incorporated enterprise (limited liability company). The cash income standard does not differentiate between the two types of employee income although there is an important difference between company owners and other employees in the degree of control or influence over the amount of payment received. This is because neither the cash income question modules nor the 'Status in employment' questions in Labour force modules collect the information required to distinguish them.

    2 Unincorporated business cash income
      The profit or loss that accrues to owners of, or partners in, unincorporated enterprises. Profit or loss is the value of the gross output of the enterprise after the deduction of operating expenses (including depreciation and operating taxes, but not income tax). Losses occur when operating expenses are greater than gross receipts and are treated as negative income.
    For unincorporated enterprises, all of the profits of the enterprise are assumed to be disbursed to the owner(s) (See Inter-Secretariat Working Group on National Accounts, pp. 87, 93 (4.4, 4.49)). Similarly, if the enterprise operates at a loss in the reference period, the loss is also disbursed to the owner(s) and is classified as a negative income flow.

    Unincorporated business cash income is net of operating expenses including: labour costs in the form of wages, salaries and supplements; the value of raw materials and services purchased; the repair and maintenance of equipment (including vehicles); the purchase of fuel; indirect taxes; interest paid in connection with the business; and rent paid for buildings and land used in the business.

    Unincorporated business cash income is also net of depreciation of capital, such as machinery, vehicles and tools used in the business.
3 Government cash pensions and allowances
      Gross current usual cash receipts from government agencies under income support and related programs, comprising:
    • Payments to students and the unemployed
    • Centrelink pensions for the aged and persons with a disability
    • Other government cash pensions and allowances (including those from overseas governments)
    The categories at the narrow group level are defined in terms of the specific named government payments allocated to them (see Glossary).

    Government cash pensions and allowances comprise payments made under specific income support programs by the Department of Family and Community Services and a range of other government departments through Centrelink, as well as such payments from the Department of Veterans Affairs.. They also include pensions paid to residents by overseas governments. Note that scholarships do not constitute a government income support program and are classified to 95 'Scholarship'.

    The standard allows for their classification by individual entitlement, e.g. the Age Pension, Youth Allowance, etc. and, at a broader level, by the purpose for which they are granted, e.g. Centrelink pensions for the aged and persons with a disability, etc.

    31 Payments to students and the unemployed
      Gross, usual cash receipts paid through Centrelink income support programs to persons entitled to such support by virtue of their unemployed or student status.
    32 Centrelink pensions for the aged and persons with a disability
      Gross, current, usual cash receipts paid through Centrelink as retirement pensions to persons entitled to such pensions by virtue of their age or disability.
    39 Other Government cash pensions and allowances
      Government cash pensions and allowances other than those included in the categories Allowances for students and the unemployed and Centrelink pensions for the aged and persons with a disability, including pensions and allowances from the Department of Veterans' Affairs and from overseas governments.
    9 Other cash income
      Cash income derived from sources other than employment, own unincorporated business and Government cash pensions and allowances. The category includes Property cash income, Superannuation/annuities, Transfers from private organisations, Transfers from other households, Scholarships and all other regular transfer payments.
    91 Property cash income
      Receipts accruing as a result of ownership of assets. It comprises returns from financial assets (interest, dividends), from physical assets (rents) and from intellectual assets (royalties).
    9101 Interest
      Gross receipts accrued in the previous financial year from deposits (including term deposits) with financial institutions; receipts (excluding principal repayments) from loans to persons in other households, expressed as a weekly equivalent.
    Interest consists of receipts from deposits (including term deposits) with banks, building societies, credit unions, and other financial institutions. Also included is interest received from government bonds/loans and securities, debentures and interest received from personal loans to others outside the household.

    9102 Dividends
      Gross cash income received from investments such as ownership of shares.

    9103 Rental income
      Profit or loss from rental properties after expenses.
    Rent comprises receipts from property other than owner-occupied dwellings. Analogous with Unincorporated business cash income, rent is net of operating expenses including repairs and maintenance, interest payments and depreciation.

    9104 Royalties
      Cash payments paid to the owners of intellectual property rights in return for the right to use the intellectual property.
    9199 Property cash income nec
      This category includes all forms of property cash income other than Interest, Dividends, Rent and Royalties, including licensing fees, endorsement payments and distributions from trusts.
    92 Superannuation/annuities
      Regular cash receipts from superannuation funds and other retirement investment plans.
    Superannuation/annuities includes all pensions and regular superannuation payments other than those received under government social security and related schemes. They include annuities from life insurance paid to survivors. They include pensions paid out of both funded and unfunded schemes.

    93 Transfers from private organisations
      Transfers from organisations other than those from government departments under income support and related programs, comprising:
      • Workers' Compensation/Accident/Sickness insurance
      • Any other transfers from private organisations nec

    9301 Workers' Compensation/Accident/Sickness insurance
      Regular cash payments from an insurance scheme to support those unable to work due to illness or injury, excluding those paid by the government (e.g. Sickness Allowance) or the recipient's own employer (which are a form of Employee cash income).
    9399 Transfers from private organisations nec
      Any regular cash transfer from a private organisation other than Workers' Compensation, Accident or Sickness insurance payments.
    94 Transfers from other households
      Transfers from private individuals usually resident in households other than the recipient's, comprising:
      • Child support
      • Gifts from relatives
      • Any other transfers from other households

    Transfers from other households include regular receipts in the form of child support/maintenance payments and regular cash gifts from relatives or others not living in the same household.

    9401 Child support
      Regular cash transfers from a non-custodial parent.
    It should be noted that under the present system in Australia, child support/maintenance may be paid on a voluntary basis or via compulsory collection through the taxation system. It remains, however, a transfer from household to household even though the payment may be backed up by law and/or paid via the Child Support Agency (CSA) or some other third party.

    9402 Gifts from relatives
      Regular and recurring cash receipts from persons related to the recipient but usually resident in another household.
    9499 Cash transfers from other households nec
      Any other regular cash receipts from persons not usually resident in the recipient's household.
    95 Scholarships
      Regular payments to students under a scholarship arrangement.
    99 Other cash income nec
      Regular cash transfers from bodies other than government, private organisations, organisations providing scholarships and other households.

SCOPE OF THE CLASSIFICATION

72. Excluded from the scope of cash income are:
  • income in-kind
  • transfers of financial instruments
  • irregular receipts or lump sums such as maturity payments received on insurance policies etc., lump sum inheritances, windfall gains, lottery prizes, etc.
  • drawings on savings or running down or sale of other assets
  • loans received, etc.
  • refunds
  • intra-household transfers

See Appendix A: Cash receipts not considered income for a list of common exclusions.

73. The classification of Sources of cash income applies to all persons, income units, families and households for which cash income data have been collected on a source by source basis, or where sources have been collected using the Basic question module or Short question module.

74. It also applies to all persons, income units, families and households for which a Principal source of cash income has been collected. Principal source of cash income for a unit is derived by summing the amounts received from each source for each member of the unit. In the simpler modules, respondents are asked to report directly on their main source of income.


CODING PROCEDURES

75. Only the HES and SIHC collect cash income data in sufficient detail to enable full coding of 'Sources of cash income'. The Short question module allows self coding of responses on 'Sources of cash income' to the top level of the classification. 'Sources of cash income' can be coded from data collected using the Basic question module in accordance with the coding table in Collection methods: Sources of cash income.

76. Only the HES and SIHC collect cash income data in sufficient detail to enable full coding of 'Principal source of cash income'. Data collected in the Basic module or the optional question in the Short module may be coded to each level of the classification in accordance with the coding table in 'Principal source of cash income'.

77. Cash income receipts not separately identified in the classification are included in residual or 'Not elsewhere classified' (nec) categories. Note that all government payments known at present, apart from those individually classified in the code structure and those not regarded as income, should be coded to '3999 Other Government cash pensions and allowances nec'.

78. Note that income from Government cash pensions and allowances includes such payments from all government sources, not only Centrelink, and is coded to source at individual pension, benefit, allowance level. However, in published output, these are always aggregated to at least the two digit level, and usually to the broad category Government cash pensions and allowances.



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