Are you REALLY a middle income household?

[AnyDream]

I've found out how you can work out whether the govt thinks your family REALLY is a low, middle or high income.

It's a statistical measure called Equivalised Disposable Household Income (EDHI) and it gives a measure of what your income is worth in real terms based on your family's structure.

STEPS:
1. Calculate the gross income, minus the tax and medicare you paid for the whole year = disposable income.

2. Each member of the household gets a score (based on the idea of how much of the household's resources that person uses compared to how much they contribute).
1st adult = 1.0
Each additional person who is older than 15 yrs = 0.5
Each child under the age of 15 years = 0.3

Add the scores up for each person in your household (Eg, mum dad & 3 kids one of whom is a teenager = 1.0 + 0.5 + 0.5 + 0.3 + 0.3 = 2.6)

3. Divide the total from step 1 by the figure from step 2.

4. Divide that number by 52 to get the weekly figure.

That's your Equivalised Household Disposable Income figure. The average EHDI is $859.

Divided into 5 quintiles or layers (each layer being 20% of all households),
AVERAGE income for each 20% of the popn:
1st 314
2nd 524
3rd 721
4th 975
5th 1704

So if your figure is somewhere around those middle values, you're a middle income family. If it's around or above the average figure in the 4th quintile, you're a high income family. And if it's around or below the average value in the 2nd quintile, you're a low income family.

Expressed as the weekly EHDI at the TOP of each 10th percentile:
10th 344
20th 425
30th 525
40th 619
50th 715
60th 832
70th 971
80th 1145
90th 1448
This means that if your EHDI was $619 p.w. then your income is more than 40% of households in Australia.

Got it?

I was surprised to discover that although I thought we were pretty solidly middle-income, we're much more marginally middle-income, and in fact there are a LOT more households doing better than us . Add the exhorbitant child care costs (yes, we pay more than double the "average" weekly cost) and it's no wonder we seem to be going backwards!!


* ABS Household and Income Distribution 09-10 Figures from the tables on p.16 and calculation from Appendix 3.