Administrative disposable income

Description

Purpose and brief description The administrative disposable income is a third pillar in the income statistics published by Statbel, alongside tax revenue and the poverty indicators based on EU-SILC, and offers possibilities to answer different types of questions from SILC and fiscal statistics. SILC uses the disposable income at household level as income concept, taking the income of all household members together. In the next step, this disposable income is converted into an equivalised disposable income by adjusting for household composition. The poverty risk figures are published based on this survey, down to the provincial level. However, the sample size does not allow for analyses at a lower geographical level. Statistics based on tax revenue are available down to the statistical sector level, but are limited to taxable incomes in the context of personal income tax returns. Non-taxable incomes are not included, nor is there an adjustment for household composition. The variable “administrative equivalised disposable income” meets an increasing demand for municipal income and poverty figures. It uses an income concept based on administrative sources that tries to match the income concept of SILC as closely as possible. For the entire population, both taxable and non-taxable incomes are included. These are taken together for all household members to obtain an administrative disposable income of the household. After adjusting for household composition, the variable “administrative equivalised disposable income” is created and can be used for municipal income and poverty figures. Construction of the variable “administrative equivalised disposable income” The construction of the variable “administrative equivalised disposable income” involves several steps. 1. Backbone First, Statbel’s demographic database Demobel is used as backbone. This database provides an overview of individuals within households for the legal Belgian population, and includes both individuals living in private and collective households. Persons living in a collective household are considered singles for this variable if they are aged 18 or older. Persons under 18 living in a collective household are excluded from the population, as well as private households consisting of only minors. 2. Income sources In a second step, taxable, non-taxable and simulated individual-level incomes are added to the population: Source of taxable incomes (gross taxable): IPCAL and Belcotax databases of the FPS Finance (professional income, social benefits due to unemployment, sickness, disability, retirement, rental income, income from capitals, maintenance payments received). Sources of non-taxable incomes: (Equivalised) integration benefit database of the PPS Social Integration Databases on the care budget for elderly persons requiring care of the FPS Social Security, Flemish Community, AVIQ and Iriscare Database on the care budget for the severely dependent persons of the Flemish Community Database on the care budget for persons with disabilities of the Flemish Community Database on the income replacement allowance of the FPS Social Security Database on the integration allowance of the FPS Social Security Simulated incomes: Birth contribution Family allowances A number of items are then deducted: Maintenance allowances paid Payroll tax Advance payments Special social security contributions Finally, the settlement of income taxes is taken into account, by deducting the amount to be reimbursed, or adding the amount to be recovered. The income and expenditure items of all individual household members are added up to obtain the “administrative disposable income” at household level. 3. Making equivalent In a third step, the administrative disposable income at household level is converted into an administrative equivalised disposable income. This is so to speak the portion of household income allocated to each household member. For this purpose, we do not divide the total administrative disposable income at household level by the number of household members, because these members share certain costs. We therefore use an equivalence scale, the same as that used in SILC which is calculated as follows: A weight of 1 is assigned to the reference person in the household. A weight of 0.5 is assigned to every other person aged 14 or over. A weight of 0.3 is assigned to every other person aged 13 or under. 4. Data treatment However, the administrative equivalised disposable income of some individuals appears to be very low or zero. Some of them can be identified as international officials based on information from the IPCAL database, the National Register and the List of European Institutions. For them and their household members, we assume incomes located at the top of the income distribution, and impute a notional administrative equivalised disposable income equal to the value of the 95th percentile, taking the household composition into account. This is not a problem as only quartiles, an administrative poverty threshold (based on the median) and an administrative poverty rate (based on the administrative poverty threshold) are published. For the remaining zero incomes and low incomes, an additional analysis is carried out based on the 5th percentile at municipal level. On this basis, the so-called “too low administrative equivalised disposable income” limit is determined annually. Persons with an administrative equivalised disposable income below that limit have an abnormally low value that is changed to a missing value for further analyses. In other words, these individuals are not included in the calculations. Finally, there are also individuals whose administrative equivalised disposable income consists solely of simulated income (birth contributions and family allowances). These values are also set to missing and are not included in the calculations. The variable “administrative equivalised disposable income” is now final. Population The Belgian legal population on 1 January of the year following the income reference year (both in private and collective households). For example, the figures of 2021 refer to the incomes of 2021 for the population on 1 January 2022. Persons in collective households are considered as people living alone. People under 18 in collective households are excluded from the population. Private households consisting of only minors are also excluded from the population. Periodicity Annual, available since 2015. Release calendar Results are available about 27 months after the reference period. Definitions Administrative poverty threshold: The administrative poverty threshold is calculated in the same way as the official poverty threshold based on SILC, i.e. 60% of the national median administrative equivalised disposable income. Administrative poverty risk: The administrative poverty risk is calculated in the same way as the official poverty risk based on SILC, i.e. the percentage of persons with an equivalised administrative disposable income below the administrative poverty threshold. Remarks These figures make it possible to publish income and poverty figures at municipal level. The methodology approaches that of SILC as closely as possible, but the income concept in SILC is even broader than that of the administrative disposable income; SILC also includes educational allowances, additional rental income, housing allowances, transfers received besides alimony, income from capital, transfers paid besides alimony and property tax. So these figures do not replace in any way the national, regional and provincial poverty figures based on SILC that are published by Statbel. To guarantee the reliability of the statistics published, it is checked, for each municipality, whether the percentage of persons whose administrative equivalised disposable income is set to missing (zero, below the limit “too low administrative equivalised disposable income”, only simulated) is not too high: If it is lower than 10%: publication. If it is between 10% and 15%: publication with warning. If it is higher than 15%: no publication. To guarantee the reliability of the statistics published, it is checked, for each municipality, whether the percentage of persons whose administrative equivalised disposable income is imputed because of international employment is not too high: If it is lower than 10%: publication. If it is between 10% and 15%: publication with warning. If it is higher than 15%: no publication. Detailed information on international officials from the list of European institutions has only been available since 2020, as well as tax incomes of persons considered non-resident by the FPS Finance. Figures up to 2019 are therefore of slightly lower quality and cannot be compared with figures from 2020 onwards. Because of the small population in Herstappe, the results for Herstappe and Tongeren were merged.

Resources

Name Format Description Link
54 https://statbel.fgov.be/nl/themas/datalab/administratief-beschikbaar-inkomen
54 https://statbel.fgov.be/fr/themes/datalab/revenu-disponible-administratif
54 https://statbel.fgov.be/fr/themes/datalab/revenu-disponible-administratif
54 https://statbel.fgov.be/nl/themas/datalab/administratief-beschikbaar-inkomen
54 https://statbel.fgov.be/en/themes/datalab/administrative-disposable-income
54 https://statbel.fgov.be/en/themes/datalab/administrative-disposable-income

Tags

  • datalab

Topics

  • ECON

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