6523.0 - Household Income and Wealth, Australia, 2015-16 
Quality Declaration
Quality Declaration ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 13/09/2017
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This document was added or updated on 08/12/2017. EXPLANATORY NOTES
Confidentiality 7 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. 8 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. 9 The introduction of perturbation in publications ensures that these statistics are consistent with statistics released via services such as Table Builder. CONCEPTS AND DEFINITIONS 10 The concepts and definitions relating to income statistics are described in the following section of this publication. Other definitions are included in the ‘Glossary’ section of this publication. Person and household data 11 Income is a major determinant of economic wellbeing for most people and households. While income is usually received by individuals, it is normally shared between partners in a couple relationship and, often, with dependent children. To a lesser extent, it may be shared with other children, other relatives and possibly other people living in the same household, for example through the provision of free or reduced accommodation costs. Even when there is no transfer of income between members of a household, and no provision of free or reduced accommodation costs, household members are still likely to benefit from some economies of scale that arise from sharing dwellings. 12 Income and wealth have a collective effect at the household level. As a result, households are the main unit of analysis in this publication. However, 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. 13 In this publication, the income distribution measures are all 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, data cubes available from the ‘Downloads’ tab of this publication primarily describe the households to which people belong. Income 14 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. 15 Income includes receipts from:
16 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 payment has also been included as income. 17 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. 18 The twice-yearly Schoolkids bonus payment that was paid to eligible families, carers and students from January 2013 to July 2016 has been included in income from government pensions and allowances. This payment, paid in January and July, was made payable to families receiving Family Tax Benefit Part A. Young people enrolled in school who were receiving Youth Allowance and other specific income support or receiving an education allowance from Department of Veteran's Affairs are also entitled to this payment, providing that they meet the age and education requirements. Income measures 19 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. 20 For more detail on the nature and impact of the changes on the income data see Appendix 4 of Household Income and Income Distribution, Australia, 2007-08 (cat. no. 6523.0). Gross income 21 Gross income is the sum of income from all sources before income tax and the Medicare levy have been deducted. Disposable income 22 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). 23 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). 24 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 in 2015-16. The introduction of a new model 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 will be available in the User Guide. Equivalised disposable income 25 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). 26 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. 27 Whereas disposable income includes negative values, these are adjusted to zero for the purpose of equivalised disposable household income. 28 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. 29 For more information on equivalised income, see the User Guide. Lowest income decile 30 Throughout the next few paragraphs, the terms quintile, decile and percentile are used. If a distribution, such as household income, is put in order from lowest to highest, and then divided into 100 equal groups, each group is a percentile. Ten percentiles make up a decile (ten equal groups) and twenty percentiles make up a quintile. 31 Equivalised income generally provides a useful indicator of economic wellbeing. However, some households report extremely low and even negative income in the survey, which places them well below the safety net of income support provided by government pensions and allowances. 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. 32 Studies of income and expenditure reported in HES surveys have shown that such households in the bottom income decile and with negative gross incomes tend to have expenditure levels that are comparable to those of households with higher income levels (and slightly above the average expenditures recorded for the fifth income decile). This suggests that these households have access to economic resources such as wealth, or that the instance of low or negative income is temporary, perhaps reflecting business or investment start up. Other households in the lowest income decile in past surveys had average incomes at about the level of the single pension rate, were predominantly single person households, and their main source of income was largely government pensions and allowances. However, on average, these households also had expenditures above the average of the households in the second income decile, which is not inconsistent with the use of assets to maintain a higher standard of living than implied by their incomes alone. 33 Other households in the lowest income decile in past surveys
However, on average, these households also had expenditures above the average of the households in the second income decile, which may be because these households are using assets to maintain a higher standard of living than their income alone could allow. 34 Some of the households included in the lowest income decile 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. 35 For this reason, in previous surveys, tables showing statistics classified by income quintiles included a supplementary category comprising the second and third income deciles, which were used as an alternative to the lowest income quintile. 36 More recent analysis suggests that this approach may have over-estimated the economic wellbeing of low income households, and unnecessarily excluded some of the most vulnerable households in the lowest income decile. The 2015–16 SIH uses the adjusted lowest income quintile that was introduced for the 2013-14 SIH cycle. The adjusted lowest income quintile is made up of the lowest two deciles, excluding the first and second percentiles, and has been calculated for previous cycles to create a time series of these data, available from the ‘Downloads’ tab of this publication. Current income 37 Income is collected using a number of different reporting periods. The reporting period is the whole financial year for own unincorporated business and investment income. In contrast, for wages and salaries, other sources of private income and government pensions and allowances, the reporting period is the most recent or usual payment, close to the time of interview. The income reported is divided by the number of weeks in the reporting period. Estimates of weekly income in this publication do not therefore refer to a given week within the reference period of the survey. Annual income 38 The tables in the main body of this publication refer to 'current' weekly income, that is, income being received at the time the data were collected from respondents. The survey also produces measures of 'annual' income that reflect total incomes for the previous financial year. Previous financial year information for most income sources will not be collected in future SIH cycles. The User Guide explains how current income differs from annual income, notes some of the advantages and disadvantages of the two types of measure and presents some 'annual' income estimates. Imputed rent 39 Imputed rent is an estimate of the amount of money that owner occupiers would have spent on housing if they were renting. The ABS estimates imputed rent to be able to compare household characteristics such as income across tenure types (owners, renters, non-market renters). Imputed rent may be understood as an adjustment to the income which takes into account the savings made by owning the household home or renting it at a subsidised rate. 40 Gross imputed rent is an estimate of how much it would cost to rent the household home. 41 Net imputed rent is gross imputed rent with housing costs (such as repairs and insurance) deducted, as these costs are incurred by owner occupiers, but generally not incurred by market renters. 42 The ABS implemented an experimental methodology for estimating gross imputed rent for household level estimates in the 2013–14 SIH, which will be finalised for the 2015-16 estimates. Although the methodology for deriving net imputed rent will not change, the net imputed rent estimates are impacted by the change in gross imputed rent estimates. 43 Imputed rent estimates for the 2015–16 SIH will be available in a secondary release later in 2017. 44 Imputed rent is included in income on a net basis. Child care payments 45 Childcare subsidies assist families with dependent children with the costs of childcare. Two subsidies are collected and modelled in the 2015–16 SIH. These are the Child Care Benefit and Child Care Rebate. 46 Child Care Benefit (CCB) is a payment from the Australian Government that assists families with the costs of registered or approved child care. The scheme is means-tested and allocates an hourly amount that can either be provided to child care consumers after child care has been paid, or directly paid to child care providers, thereby reducing the upfront child care fees payable by the consumer. 47 Child Care Rebate (CCR) is also an Australian Government payment that, like CCB, assists families with the cost of child care. Each childcare consumer is entitled to CCR, which is 50% of their net childcare costs. That is, a childcare consumer is entitled to 50% of their childcare costs after CCB has been deducted from the cost if they receive it, or else 50% of the whole cost. CCR payments accrue up to a per child, per year limit ($7,500 per child per year in 2015–16). CCR, like CCB, may be paid either to the consumer in a lump sum or directly to childcare providers, thereby further reducing the upfront cost of childcare. 48 Estimates of CCB and CCR are collected from the child care questions, however there has been a substantial gap between the reported number of households receiving childcare subsidies and the total value of that assistance, compared to administrative records. CCB and CCR have been modelled to improve the accuracy of estimates of these payments. The output data is made up of both reported and modelled data. Child care assistance is conceptually treated as social transfers in kind, including administrative overhead as part of the value of the transfer. Social transfers in kind 49 Social transfers in kind consist of goods and services provided free or at subsidised prices by the government. The allocation of social transfers in kind presented in this publication is restricted to government expenditure that is relatable to particular types of households. Information reported in the 2015–16 SIH and HES was used as the basis for allocating social transfers in kind for the provision of education, health, housing, child care, electricity concessions and other social security and welfare services. 50 The total value of social transfers in kind was defined as Commonwealth, state or territory and local government expenses, net of intra-government transfers, minus government pensions and allowances paid in cash minus government revenue from the sale of goods and services. 51 The User Guide provides estimates of social transfers in kind and outlines the methodologies used to allocate the social transfers in kind to individual households in 2015–16. Net worth 52 Net worth, often referred to as wealth, is the value of a household's assets less the value of its liabilities. Assets can take many forms including:
53 Liabilities are primarily the value of loans outstanding including:
54 In the 2015–16 SIH, some asset and liability data were collected on a net basis rather than collecting for each component listed above. In particular, if a survey respondent owned or part owned a business, they were asked how much they would receive if they sold their share of the business and paid off any outstanding debts. Metropolitan Accessibility/Remoteness Index of Australia (Metro ARIA) 55 The Metropolitan Accessibility/Remoteness Index of Australia (Metro ARIA) is a geographic index which quantifies service accessibility within metropolitan areas. The index reflects the ease or difficulty people face accessing basic services within metropolitan areas, derived from the measurement of road distances people travel to reach different services, and covers five different service themes:
56 Metro ARIA covers 2011 Greater Capital City Statistical Area (GCCSA) by 2011 Statistical Area 1. Areas outside GCCSAs are defined as non-metropolitan. Non-metropolitan should not be interpreted as lower accessibility; it is simply that the region is located outside the capture area detailed Metro ARIA. Further information regarding Metro ARIA and maps can be found via the following link: https://aurin.org.au/projects/data-hubs/metro-aria/ Housing tenure 57 Changes were made to ABS housing standards in 2015-16, aimed at better reflecting current housing tenure arrangements. Rent/buy arrangements are no longer prevalent and the collection of shared equity arrangements has been updated as a result. Rent/buy arrangements are a type of shared equity scheme where equity is purchased for part of the property and rent payments are made on the remainder. Current shared equity arrangements available to prospective home owners typically involve no rent component. For previous SIH cycles there is double reporting of repayments for shared equity respondents. Users should note that rent-to-buy schemes, where a potential buyer agrees to rent a property for a specified period of time with an option to buy the dwelling after this lease period has lapsed, are considered as renters in SIH. SURVEY METHODOLOGY Scope 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:
Data collection 60 Information for each household was collected using:
Sample copies of the above collection tools are included in the User Guide (cat. no. 6503.0). Sample design 61 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. 62 For the 2015-16 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. 63 For the 2015-16 SIH there was an additional sample of households in Greater Capital City areas, designed to collect information specifically from households whose main source of income was government pensions, benefits and/or allowances. These households were enumerated using a separate sample design, and received the combined SIH and HES questionnaire. Dwellings for the additional pensioner sample were also selected using a stratified, multistage cluster design from the ABS Population Survey Master Sample in capital cities. A short screening questionnaire was used to identify households who were likely to report a main source of income was from government pensions, benefits or allowances. From this additional sub-sample, one in four of the selected dwellings completed HES and SIH surveys, regardless of the result of the screening questionnaire. Information from this sample were used to assess the outcomes from the screening questionnaire for the whole sub-sample. Non-responding households 64 Of the selected dwellings there were 29,815 households in the scope of the survey. Of this initial sample, 4,883 dwellings (16%) were excluded as no contact was able to be made (e.g, vacant dwelling, holiday homes). A further 7,164 (24%) 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. The remainder were:
65 126 households were excluded because the main income earners in the household did not adequately respond to questions about income sources and amounts. 229 households that were collected as part of the HES sample (see cat. no. 6530.0) but did not have sufficient expenditure diary information were retained as part of the SIH sample. Partial response and imputation 66 388 partially responding households were retained in the final sample after full record imputation of person(s) in the household who were not the main income earners. For these households, any missing values were imputed by replacing each missing value with a value reported by another person (referred to as the donor). 67 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. 68 The final SIH sample includes 5,117 households (29% of households) and 8,079 person records (24% of persons aged 15 years or over) which had at least one imputed value. Of all the relevant items (continuous variables), 3.5% of values were imputed. This is slightly lower than in SIH 2013-14 (3.9%) and slightly higher than in the last SIH cycle where HES was jointly collected (2.6%). 244 full records were imputed (0.5% of all SIH person level records). Final sample 69 Of the selected dwellings (24,932) that were contacted and in scope of the survey, 17,768 (71%) households were included as part of the final estimates. 70 Survey of Income and Housing, Final sample, 2015–16
71 The SIH sample is not evenly balanced over the course of the year. Due to under-performance of the sample design in the first half of the collection year, a top-up sample was selected and collected from January - July 2016. The fully responding households by quarter are provided in the table below. Weights adjust by quarter to ensure representativeness across the year. BALANCE OF FULLY RESPONDING HOUSEHOLDS, 2015-16 collection year
Weighting 72 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. 73 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 2015–16 are built up from the 2011 Census. 74 In the 2015–16 SIH, as in 2007–08, 2009–10 and 2011–12 and 2013–14, 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. 75 As in 2009-10, an additional sample was used to provide detailed income and expenditure information for households where the main source of income is government pensions, benefits and allowances. The additional households completed the full SIH questionnaire and contribute to the published SIH estimates. The pensioner sample is incorporated using a pooled estimation approach. This differs from the method used in 2009-10, where the base HES and additional pensioner samples were combined using composite estimation after weighting each component separately. 76 The benchmarks used in the calibration of the final weights for the 2015–16 SIH were:
Estimation 77 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. 78 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. 79 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 80 The estimates provided in this publication are subject to two types of error, non-sampling and sampling error. Non-sampling error 81 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. 82 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. 83 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. 84 The following methods were adopted to reduce the level and impact of non-response:
Sampling error 85 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). Further information on sampling error is given in the User Guide. ACKNOWLEDGMENT 86 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. SPECIAL DATA SERVICES 87 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 If the information you require is not available from the publication or the data cubes, please contact the National Information and Referral Service (NIRS) on 1300 135 070, (international callers +61 2 9268 4909) or via email <client.services@abs.gov.au>. The NIRS can be contacted from anywhere in Australia between 8:30am and 5:00pm (AEST) Monday to Friday. The ABS Privacy Policy (www.abs.gov.au/privacy) outlines how the ABS will handle any personal information that you provide to us. UNIT RECORD FILE 89 A basic confidentialised unit record file (CURF) from the 2015–16 SIH will be released on CD-ROM in late 2017. All clients wishing to access microdata from the SIH should visit the How to Apply for Microdata web page. Clients should familiarise themselves with the User Manual: Responsible Use of ABS CURFs and other related microdata information which are available via the Microdata web pages, before applying for access through MiCRO. Australian universities 90 The ABS/Universities Australia Agreement provides participating universities with access to a range of ABS products and services. This includes access to CURF data. For further information, university clients should refer to the ABS/Universities Australia Agreement web page. Other clients 91 The Microdata Entry page on the ABS website contains links to microdata related information to assist users to understand and access microdata. For further information users should contact the microdata access team by email: microdata.access@abs.gov.au or telephone (02) 6252 7714. USER GUIDE 92 The User Guide (cat. no. 6503.0) 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 2015–16 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. It also contains information for users of the SIH confidentialised unit record files (CURFs). The 2015–16 User Guide is expected to be released in October 2017. Document Selection These documents will be presented in a new window.
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