Classification and coding

Income units are classified according to the following criteria: 

• whether they comprise one person or more than one person
• among those comprising more than one person, whether a couple relationship exists and
• among those where a couple relationship exists, whether any dependent children are present.

Note that one-parent income units always include dependent children. In a one parent family with non-dependent children only, each individual comprises a separate one-person income unit.

The standard classification of 'Income unit composition' is:

1 Couple only
2 Couple with dependent children
3 One parent with dependent children
4 One person

All income units can be coded to one of the substantive categories of the 'Relationship in household' data so residual categories and codes are not required.

A supplementary code of '0 Inadequately described' is provided for those cases where 'Relationship in household' data are insufficient to identify and classify the component income units.

The categories of the classification are defined as follows:

• Couple only income unit: an income unit comprising two partners in a couple relationship.
• Couple with dependent children income unit: an income unit comprising two partners in a couple relationship and all of their dependent children.
• One parent income unit: an income unit comprising a lone parent and all of their dependent children.
• One person income unit: an income unit comprising a person who is not party to either a couple or parent/dependent child relationship. Specifically this includes all persons identified by the 'Relationship in household' variable as a non-dependent child, an other related individual or a non-family member.

The classification applies to all income units.

'Income unit composition' is coded from data obtained from 'Relationship in household'. The rules and procedures for allocating individuals to income units are the same as those for identifying families which were explained in detail in the 'Family composition' standard, except that persons who are not in couple or one parent income units are not allocated to any form of 'Other family' income unit. Such persons form instead one person income units. The procedures are as follows:

Where a couple relationship is identified, the couple will form the nucleus of an income unit. If 'Relationship in household' data reveal the presence of one or more natural, adopted, step, or foster dependent children of that couple, the couple and the dependent children will be coded as a Couple with dependent children income unit. A couple without dependent children will be coded as a 'Couple only' income unit.

Once any couple relationships have been identified in the household, if there is a lone parent with one or more natural, adopted, step, or foster dependent children, that parent and the children will be coded as a 'One parent' income unit.

Any person in a household aged 15 or over who is not allocated to an income unit using these procedures will be coded as a 'One person' income unit. Specifically, non-dependent children of any age, lone parents without dependent children, other related individuals and non-family members in family households - and all persons in group households and lone person households - comprise 'One person' income units.

Any child under 15, who is not the natural, adopted, step or foster child of anyone in the household, is allocated to an income unit as a 'nominal child'. The ABS uses the concepts of the 'nominal child' and 'nominal parent' where to all intents and purposes a 'parent-child' relationship exists, to facilitate a more accurate and analytically useful picture of the arrangements that may exist in the household. Children under 15 who are not the natural, adopted, step or foster child of anyone in the household are allocated to an income unit in the same way as a 'nominal child' is allocated to a 'nominal parent' in family coding. See the 'Family composition' standard for more details. A nominal parent is allocated to a nominal child by applying the following rules in the order shown below. The role of nominal parent is given to:

• The nominal child's eldest sibling who is over the age of 25.
• The nominal child's closest non-sibling relative aged 25 or more. If necessary, relationships by lineage (vertical) take precedence over other types of relationships, e.g. a grandmother over an aunt, or an aunt over a cousin.
• Persons in a couple relationship.
• A female in preference to a male, e.g. an aunt over an uncle.
• The eldest person usually resident in the dwelling.

Where an unattached child under 15 is allocated to an income unit in accordance with the procedures detailed above, the child is treated in the same way as a natural, adopted, step or foster child. The composition of the nominal parent's income unit is then established in accordance with the procedures set out above. This may result in a 'Couple only' income unit becoming a 'Couple with dependent children' income unit or a 'One person' income unit becoming a 'One parent with dependent children' income unit.

In summary:

• Couple relationships are identified first. Each identified couple, along with their own dependent children, comprises a separate 'Couple only' or 'Couple with dependent children' income unit.
• Any lone parents and their own dependent children form separate 'One parent with dependent children' income units.
• Any other person aged 15 or over forms a separate 'One person' income unit.
• Children under 15 who are not the children of any couple or lone parent in the household are attached to an income unit as a nominal child as prescribed above.