§ Mr. RedmondTo ask the Secretary of State for Social Security how a household of(a) below-average income and (b) above-average income is calculated.
§ Mr. JackIn the technical annex to the publication "Households below Average Income A Statistical Analysis 1981–87", published in July 1990, pages 75 to 78 are details of the definition of income, of how income is equivalised across households, and of the calculation of average income.
Each household's income is calculated as the total net income of all household members, either before or after housing costs. This amount is then divided by the equivalence value of the household concerned, using the DSS'sequivalence scales. This produces "equivalised household incomes", and takes account of the different income levels required by households of different compositions to achieve the same overall living standard.
The average equivalised household income is then calculated across the whole population. Thus this average is the sum of the equivalised household incomes of all people in the survey, divided by the total number of people. Each household's equivalised income is then either above or below this average.