UNDERLYING CONCEPTS
NAME OF THE VARIABLE
3. The name of the variable is 'Total cash income'. For reasons discussed in the 'Framework for standard cash income variables', cash income, rather than total income (including in kind receipts) is the preferred proxy measure of economic wellbeing. 'Total cash income' is the full label for use in table titles, wafer titles, headings, stubs and text. However it has sometimes been shortened to 'Total income' or 'Income' in ABS publications.
DEFINITION OF THE VARIABLE
Nominal definition
4. The standard nominal definition of 'Total cash income' is:
Total current, usual, regular and recurring cash receipts and receipts from business less operating expenses, but before deduction of income tax.
5. The main considerations in developing this definition relate to whether to measure current or financial year receipts, whether to measure actual or usual income, and whether to measure income before or after income tax. These issues are discussed in further detail in the Conceptual issues section of the 'Framework for standard cash income variables'.
Operational definition
6. The standard operational definition of 'Total cash income' is:
The sum of amounts of cash income from wages, salary, all government pensions and allowances, interest, dividends, superannuation, profit/loss from own business or rental property, and any other regular source reported for the applicable reference period in response to one or more questions, calculated as a weekly equivalent.
7. The reason the concept is operationally defined in this way is that different modules collect the basic concept in significantly different ways. Specifically, for reasons enunciated in the Conceptual issues section of the 'Framework for standard cash income variables', work related expenses are only deducted from cash income received from Unincorporated business and rent. Because respondents are unlikely to be able to calculate such deductions accurately for the current period, where possible, they are collected for the last financial year.
- The Short and One-question modules collect 'Total cash income' from all sources with a single question relating to usual receipts.
- The remote area Indigenous Social Survey (ISS) module collects separate amounts from each of five separate specific sources on a current basis.
- The Basic modules collect amounts from unincorporated business and property sources from the last financial year. Receipts from all other sources are collected on a usual current basis in a separate question. The two amounts are summed to derive 'Total cash income'.
- The Full question module collects separate amounts from a variety of individual sources. 'Total cash income' is then derived by calculating a weekly value for each source and summing the results. Unlike the Basic module, the Full module has checks to ensure that respondents reporting receipts of income from sources collected on a last financial year basis are still receiving income from those sources. Neither module collects a value for current unincorporated business income or rental income from units who are engaged in such activity in the current period but did not report receipts from these sources in the previous financial year.
Scope of the variable
8. The cash income concept applies to persons, income units, families and households. The total cash income of a unit is equal to the sum of the total cash incomes of all its members aged 15 and over. Although cash income is usually collected on a person basis, 'Total cash income' is a more useful indicator of economic wellbeing when analysed at the income unit, family or household level.
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