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Leaving low income from benefits

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Abstract:

The indicators show gross earnings levels expressed as a percentage of average full time earnings, required for a family to reach a 60% median income threshold from benefits of last resort. Benefits of last resort are paid when all other sources of income are exhausted. 60% was shown because many countries have benefits of last resort above 50%. Benefit income includes family‐related benefits and housing benefits (with and without), on top of core benefits. It is expressed as a percentage of average full‐time wages. Income tax and social security as well as tax‐related benefits are also counted. The indicators are shown for 2009 and for lone‐parents and couples with two children aged 4 and 6. In the married‐couple case, a one earner couple is assumed. Family incomes in these situations are simulated using the OECD Tax‐Benefit Model (methodology available in Benefits and Wages 2007 and on‐line: www.oecd.org/els/social/ workincentives). Median incomes come from Growing Unequal? (2008). They relate to the mid‐2000s and are converted to 2009 prices. No bars are shown for countries where the sum of all benefits, excluding earnings, exceeds 60% of median income. For Australia, Canada, Israel, New Zealand, Switzerland, Turkey and Korea, the indicators are for 2008.

Document Type: Review Article

Publication date: 2011-04-01

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