Poverty rates in OECD countries

Although the Organisation for Economic and Social Development (OECD) uses the  50% median income poverty line, differences in research methodology mean that the results are close to but not identical to those reported in this website for Australia.

2021 or latest data

This graph shows poverty rates among the Organisation for Economic and Social Development (OECD) countries in 2021 (or latest data), using the 50% median income poverty line. The OECD’s estimate for the overall rate of poverty in Australia according to this graph is 12.6% (compared with our estimate for 2019-20 of 13.4%). This makes Australia’s poverty rate the 15th highest among the 38 OECD countries.

2017-18

This graph shows poverty rates among the Organisation for Economic and Social Development (OECD) countries in 2016, using the 50% median income poverty line. The OECD’s estimate for the overall rate of poverty in Australia according to this graph is 12.1% (compared with our estimate for 2017-18 of 13.6%). This makes Australia’s poverty rate the 16th highest of the OECD countries.

2015-16

This graph shows poverty rates among the Organisation for Economic and Social Development (OECD) countries in 2014-15, using the 50% median income poverty line. The OECD’s estimate for the overall rate of poverty in Australia according to this graph is 12.8% (compared with our estimate for 2015-16 of 13.2%). This makes Australia’s poverty rate the 14th highest of the OECD countries.


ACOSS and Cohealth release health inequality infographic

Everyone should have equal access to health care in Australia. But there is a huge difference in health outcomes depending on income. This is especially true for particular groups in the community, such as people living in precarious housing, or those dealing with the impacts of family violence.

ACOSS and Cohealth have partnered to produce an infographic on how poverty and inequality make us sick: 

Download it at http://povertyandinequality.visualise.today/wp-content/uploads/2019/10/ACOSS_Cohealth_health-inequality-infographic.pdf


Trends in real average household disposable income

This graph shows the average annual growth in household after-tax incomes for each quintile from 1999-00 to 2017-18. 

During this period, average annual growth for the highest 20% (after taking account of inflation), compared with 2.2% for the middle 20% and 2% for the lowest 20%. While this is the case, there were major shifts in income growth and distribution before and after the Global Financial Crisis (GFC) in 2008. During the boom years growth in high incomes suprassed that of middle and lower income households. The average after-tax incomes of the highest 20% rose from $2,581 per week in 1999-00 to $3,619 in 2087-08 (5%0 per year). This compares with an increase from $1,308 to $1,733 for the middle 20% (4.1% a year) and an increase from $519 - $680 for the lowest 20% (3.9% a year). The income of the highest 5% rose during the boom from $3,514 a week to $5,611 (7.5% a year). After the GFC, growth in household income generally flat-lined, along with the trend in income inequality.


Who sits in the lowest 40% and top 20%?

This shows what kinds of households sit in the highest, middle and lowest 20% household income groups, by main income source and the employment status of the household reference person (usually the household member with the highest income). It shows that most people in the lowest 20% are in households that rely mainly on government pensions and allowances (60%) for their income.

Unsurprisingly, most (58%) of people in the lowest 20% belong to  households in which the reference person is not in the labour force (for example, retired, has a disability, or caring for a family member)Another 7%  are in households whose reference person is unemployed. More surprisingly, 20% of the lowest income group are in households whose reference person is employed full time. These are mainly families with children, since we have adjusted their household incomes downwards to reflect their higher costs. For this reason, almost half (46%) of the lowest 20% are in families with children, including a disproportionately high share of sole parents (12%). Single people without children (20%) are also over-represented in this income group.

As we move up the income ladder, a growing share of household income comes from earnings. Among people in the second 20% from the bottom of the income rankings, 62% live in households where  the main income is earnings. Their wages would be relatively low. Among all people in this income group, 50% are in households whose reference person is employed full-time and 20% where they are  employed part-time. Only 1% are in households whose reference person is unemployed, as they are more likely to be found in the lowest 20%. On the other hand, 20% of people in this income group are in ‘older’ households whose reference person is retired. This group is more likely to include couples with significant investment income.

A majority (55%) of people in the second 20% are in families with children, but with a much smaller representation of sole parents (9%) than in the lowest 20%. We find fewer singles (8%) and couples (17%) without children generally in this income group. Turning to  the highest 20%, 87% live in households where earnings are the main income source, and 87% are in households whose reference person is employed full time. A significant share (9%) of people in the highest 20%live in households where investments are the main source of income. This implies that their investment incomes are equivalent to the earnings typically received by high-income households. No people in the highest 20% are in households whose main income is social security.


Average weekly disposable income

These charts show average weekly household incomes (including social security payments and after tax has been deducted), by household income group in 2015-16 and 2017-18. For this purpose, individuals have been divided into five equal groups ranked by household income. At the highest and lowest ends of the income scale, extra columns have been added to show the average household incomes of the highest and lowest 10% and 5%.

2019-20: The highest 20% income group received $4,306 per week after tax ($305,000 per year before tax) twice the disposable income of the middle 20% ($1,989 per week or $122,000 per annum) and five times that of the lowest 20% ($794 per week or $43,000 per annum). The highest 5% (with $6,495 per week or $569,000 per annum) had three times the disposable income of the middle 20% and eight times that of the lowest 20%.

2017-18: A person in the highest 20% of households has $4,166 per week, more than twice the income of the middle 20% ($1,884 per week) and nearly 6 times that of the lowest 20% ($753 per week). The highest 5% (with $6,796 per week) has nearly 4 times the income of the middle 20% and 9 times that of the lowest 20%.

2015-16: A person in the highest 20% group lives in a household with more than twice the average disposable income of the middle 20% ($3,978 per week compared with $1,779. The average household income of the middle 20% ($1,779 a week) is two and half times that of the lowest 20% ($735). At the extremes of the income scale, the average household income of the lowest 5% is $436. In contrast,  the average household income of the highest  5% is $6,063.


Shares of national household disposable income

This shows how all household income  in Australia is shared among five groups ranked by income, each comprising 20% of the population.

2019-20: In 2019-20, the 20% of people in the highest income group received 41% of all household income in Australia. This was more than that received by the middle 20%, which received 17% of all household income.  Those in the lowest 20% received only 6% of all household income, while those in the second lowest income group received 12% of all household income.

2017-18: In 2017-18, the 20% of people in the highest income group received 42% of all household income in Australia. This was more than that received by the lowest 3 income groups, who received 35% of all household income. Those in the lowest 20% received only 6% of all household income, while those in the second lowest income group received 12% of all household income.

2015-16: The graph shows that, in 2015-16, the 20% of people in households with the highest income group received 40% of all household income in Australia. This was more than the income received by the lowest three income groups – the lowest 60% - who received 38% of all household income. Those in the lowest 20%  received only 8% of all household income, while the second lowest income group received 13% of all household income.


Overall trends in income inequality

This graph shows the overall trends in income inequality from 1999-00 to 2017-18 using the Gini coefficient by both weekly and annual income. A higher Gini represents greater overall inequality.

When the weekly income measure is used, the Gini rises from 0.304 to 0.319 between 1999-00 and 2007-08 and ends up at 0.315 in 2017-18.

When the annual income measure is used, inequality increases more sharply from 0.305 in 1999-00 to 0.344 in 2007-08, falling back to 0.329 in 2014-15.

In theory, we would expect the Gini coefficient for annual income to be lower than that for weekly income, as incomes are smoothed out throughout the year. One explanation for the higher Gini for annual incomes  is that fluctuating one-off incomes such as dividends and capital gains were under-reported in the weekly income measure. Another is that the annual income measure does not accurately pick up fluctuations in social security payments through the year. Find out more by reading our methodology page.


Main income source of each income group

This chart shows the main sources of household income for people ranked by the income of their households.

2019-20: Wages and salaries contributed most of the before-tax income of all income groups except the lowest 20%. Social security payments comprised half the income (50%) of the lowest 20% but contributed less than 10% of the incomes of the highest 60% of households. Investment income only contributed a sizeable share of the incomes of the highest income groups. For example, it contributed 23% of the income of the highest 5%.

2017-18: Wages and salaries represent the main source of income for all income groups except the lowest. Social security payments are the largest income source for the lowest 20% (54% of their income) but  these payments comprise 25% or less of total income for all higher-income groups. Investment income only forms a sizeable share of the incomes of the highest income groups, for example 29% of the income of the highest 5%.

2015-16: Wages and salaries represent the main source of income for all income groups except the lowest 20%, which instead received most of its income (60%) from social security payments. Investment income and income from own-businesses and self-employment are much smaller components of income overall. However, together they comprise 20% or more of the  incomes of the highest and lowest 5%. Note that there are doubts about the placement of many households reliant on investments or self-employment in the lowest 5% , as their incomes often appear to be under-reported.


Labour force status of household reference person in each income group

This shows the employment status of all adults in each of the income groups.

Only 24% of adults in the lowest 20% have paid employment, and less than half of these workers are in full-time jobs.

In the middle 20%, 68% of adult household members are employed, with 42% of these workers in full-time jobs. Typically in these households there is a primary income-earner in full-time paid work and a secondary income-earner in part-time paid work.

Within the highest 20%, 87% of adult households members have paid work, with 67% of them in full-time jobs. This suggests that these households are more likely than the middle 20% group to have two full-time wage earners.