Wales
Low income by work status
Key points
- Unless all adults in the family are working (and at least one of them full time), the risks of being in low income are substantial: 80% for unemployed families; 55% for economically inactive families; and 20% for those with some paid work.
- These risks have remained largely unchanged since the mid-1990s for all family types.
- Of those working-age people who were in low income households, 24% were in families where the adults were counted as unemployed in the mid-1990s. That proportion has now almost halved, to 14%.
- By contrast, the proportion of working-age people in households in low income with at least one adult in the family in work rose from 38% in the mid-1990s to 47% in recent years.
- As a result, three times as many working-age people are now in 'in-work poverty' as from poverty arising from unemployment.
Graph 1: Risks over time
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Graph 2: Shares over time
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Definitions and data sources
The first graph shows the risk of a working-age person being in a low income household, with the data shown separately for the following family work statuses: all working (single or couple, with one in full-time work and the other - if applicable - in full-time or part-time work); part working (couples where one is working and the other is not plus singles or couples where no one is working full-time but one or more are working part-time); workless - unemployed (head or spouse unemployed) and workless - economically inactive (includes long-term sick/disabled and lone parents). The self-employed and pensioner families are excluded from the analysis. The left hand bars show the average for the three years 1994/95 to 1996/97 and the right hand bars show the average for the years 2003/04 to 2005/06.
The second graph shows a breakdown of the low income working-age people by family work status. The inner ring shows the average for the three years 1994/95 to 1996/97 and the outer ring shows the average for the three years 2003/04 to 2005/06. The self-employed are included in the 'part working' category as their risks of low income are similar, and much higher than the 'all working' category.
The data source for both graphs is Households Below Average Income, based on the Family Resources Survey (FRS). Income is disposable household income after deducting housing costs and the low income threshold is the same as that used elsewhere, namely 60% of contemporary median household income. All data is equivalised (adjusted) to account for differences in household size and composition. Note that in 2007 DWP made some technical changes to how it adjusted household income for household composition (including retrospective changes) and, as a result, the data is slightly different than previously published figures. The averaging over three-year bands has been done to improve the statistical reliability of the results.
The term 'family' is used to cover an adult and their spouse (if applicable) whereas the term 'household' is used to cover everyone living in a dwelling. So, a young adult living with their parents would count as one 'household' but two 'families'. In analysing the rates of low income by work status, the work status is analysed by family whereas the income is analysed by household. This is the main reason why the low income rates for workless families is much less than 100 per cent. Note that an alternative – and more technically correct - term for 'family' is 'benefit unit'. For a more detailed discussion of this issue, see the page on households, families and benefit units. Note that families where at least one of the adults is of pensionable age are excluded from the analysis.
Overall adequacy of the indicator: high. The FRS is a well-established annual government survey, designed to be representative of the population as a whole.
External links
See the HM Revenue & Customs sites on tax credits.