Low-income households

Note: The data and text for this section is sourced in whole or in part from the following report: Ministry of Social Development (2008), Children and Young People: Indicators of Wellbeing in New Zealand 2008.  Wellington: Ministry of Social Development.

Definition

The proportion of young people aged 12 to 24 living in households with disposable income below a specific threshold.(1)

Relevance

Living in a low-income household restricts young people’s quality of life, affects access to goods and services, and limits the capacity of young people to engage in social and community activities.  Access to financial resources as a young adult has potential long-term consequences as it may influence young people’s participation in post-compulsory education, career selection and patterns of paid employment.

Current level and trends

In 2007, 14 percent of young people aged 12 to 17, and 17 percent of those aged 18 to 24 were living in a low-income household.

This is defined in this indicator as a household with an income less than 60 percent of the 1998 median equivalent household income net-of-housing-costs. 

The proportion of youth living in households with low incomes increased significantly in the early 1990s.  Rates have since reduced but remain higher in 2007 than in the 1980s.

Proportion of young people aged 12 to 24 living in low income households, by age, selected years 1986-2007

Proportion of young people aged 12 to 24 living in low income households, by age, selected years 1986-2007

Source: Derived from Statistics New Zealand's Household Economic Survey by the Ministry of Social Development. Median income benchmarked at 1998 and adjusted forward and back using the Consumer Price Index.  Note that the Household Economic Survey was collected two-yearly until 1998 and three-yearly thereafter. 

Notes

1. The definition of a “low-income household” for national data is a household with real disposable (after-tax) income less than 60 percent of the national median, benchmarked at 1998, adjusted for inflation and equivalised for household size and composition, with 25 percent deducted for average housing costs.  A different definition is used for regional data; see note on relevant table.