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Low Incomes

Volume 472: debated on Wednesday 5 March 2008

To ask the Secretary of State for Work and Pensions (1) how his Department defines a low income household; and whether this definition has changed since 1997; (185938)

(2) how his Department defines a household in poverty; and whether this definition has changed since 1997;

(3) what measures his Department uses for (a) child poverty, (b) working-age poverty and (c) pensioner poverty; and what criteria were taken into account in determining these measures;

(4) whether the way his Department measures (a) child poverty, (b) working-age poverty and (c) pension poverty has changed since 1997.

Poverty is a complex and multidimensional issue and, as such, there are many possible measures of poverty.

It is generally accepted that low income is central to any poverty measurement. Definitions of low income households are set out in the annual National Statistics publication Households Below Average Income. This reports numbers of individuals in households below or persistently below 50 per cent., 60 per cent. and 70 per cent. of median household income before and after deducting housing costs.

Statisticians have made a number of methodological improvements since 1997 in line with international best practice, following full consultation with users and National Statistics protocols. Improvements have been explained in the relevant publications. HBAI presents a consistent time series reflecting all changes that have been made.

As no single measure captures all aspects of poverty, the new public service agreement “Tackle poverty and promote greater independence and wellbeing in later life” includes a range of indicators related to low income for pensioners. These are relative low income (below 50 and 60 per cent. contemporary median household income), and absolute low income (below 60 per cent. of 1998-99 median income uprated in line with prices). Further information is given in the Government’s PSA Delivery Agreement 17, which is available in the Library.

The public service agreement (PSA) to halve child poverty sets out indicators of child poverty. These are relative low income (below 60 per cent. of contemporary median household income) absolute low income (below 60 per cent. of 1998-99 median income uprated in line with prices), and combined low income and material deprivation (based on below 70 per cent. of contemporary median household income). The three indicators of child poverty reflect that income is a key aspect of child poverty. The combined low income and material deprivation indicator provides a wider measure of families’ living standards. Further information is given in the conclusions document of the Department’s “Measuring Child Poverty” consultation, which is available in the Library.