The at-risk-of-poverty rate is an international measurement which counts the share of people with an equivalent income that is below the at-risk-of-poverty threshold, which is set at 60% of the national median equivalent incom.
- The at-risk-of-poverty threshold is the equivalent income determining whether a person is at risk of poverty. Anyone with an equivalent income below the poverty rate is at risk of poverty. It is important to keep in mind that it is the median income that determines the at-risk-of-poverty-threshold.
- The poverty gap is calculated as the difference between the median income of those below the 60% poverty line and the actual 60% at-risk-of-poverty rate. This figure provides the ration by which the mean income of the poor falls below the 60% poverty line.
- Equivalent income figures are based on an equivalised disposable income consisting of a household’s total income, divided by the number of household members converted into equalised persons weighed according to their age. With this calculation method, incomes of different types are made comparable by taking account of shared consumption benefits. A large household needs a higher total income than a small one; however, a large household has shared consumption benefits. For example, a five-person household does not need to pay five times for everything (e.g. energy, domestic appliances, etc.)
- Income is money received through work or through proceeds from one’s own business, state benefits such as pension, unemployment benefits, interest subsidies and student grants, plus capital gains such as interest and dividends.
- Gross income is the total income before subtraction of taxes and other statutory deductions.
- Net income is income remaining after taxes and other statutory charges have been deducted.
- Median income is the income amount dividing the population into two equal groups, with half of the population having an income higher than this amount and the other half lower.
- Average income is calculated as a normal average.
- A household is defined as the number of people who are registered as persons having the same residence the last day in the year. Residents of institutions or boarding houses are not included in household statistics. This means that household figures do not represent the total population. An additional requirement for inclusion in a household statistic is that at least one person in the household has been fully taxable the entire year. Adults are 18 years or older.
- The income in a given percentile group is the average income of the person in the percentile group.
See also Riks of povertry.
Income figures have a lag of approx. one year, since income statistics are based on tax authority TAKS’s tax list, which is not completed until just over a year after the registration year when all income assessments have been concluded.