LOW, MIDDLE AND HIGH INCOME AND WEALTH HOUSEHOLDS
Households with middle and high incomes tend to have a corresponding level of economic resources and wellbeing. Low income households, however, do not always have a lower level of economic wellbeing, because a low income household may have a high level of wealth which helps to support consumption. For this reason, it is important to consider income and wealth distributions together to better understand the economic wellbeing of households.
In this section, the characteristics of households with different income and wealth levels are compared. For this comparison:
- High income households are those in the highest equivalised disposable household income quintile
- Middle income households are those in the third equivalised disposable household income quintile
- Low income households are those in the lowest equivalised disposable household income quintile, adjusted to exclude the first and second percentiles.
This low income definition replaces the definition used in previous cycles, which was households in the second and third deciles. The new definition better captures genuinely low income households by excluding those with nil or negative income, or income significantly below government pension rates. Such households may be experiencing a temporary economic setback, or have high levels of wealth to support their consumption expenditure compared to other households in the lowest income quintile.
To compare different wealth levels:
- High wealth households are those in the highest net worth quintile
- Middle wealth households are those in the third net worth quintile
- Low wealth households are those in the lowest net worth quintile.
For more information see the Survey of Income and Housing, User Guide, Australia, 2013–14
(cat. no. 6553.0).