Glossary of terms
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The most widely used definition of poverty is living in a household that has a disposable income below 60 per cent of the median income. The median is the mid-point of the income distribution, so half the population will always have an income below the median by definition. There is no mathematical reason why anybody should have an income below 60 per cent of the median, and in some societies virtually nobody does.
Income figures are usually adjusted to reflect the number of people living in the household and their age. Incomes data on this basis is reported in the annual Department for Work & Pensions publication Households below average income.
The median is the number in the middle of a sequence of numbers. In this instance, if you create a list of all UK household incomes, the median income will be the number in the middle which has an equal amount of numbers above it and below it.
Poverty can be measured in two ways before housing costs and after housing costs, sometimes referred to in research as AHC and BHC. Inner London presents a clear example of the differences that arise in the use of the two measures, with 53 per cent of children in poverty 'after housing costs' AHC), which falls to 34 per cent with the 'before housing costs' (BHC) measure. Source: DWP, Family Resources Survey, 2004/05
Before Housing Costs (BHC)
The Before Housing Costs measure of net income is taken as the total income from all sources (e.g. earnings, social security benefits, pensions, maintenance payments, educational grants and cash values of payments in kind such as free school meals) for all members of the household, minus income tax, national insurance, pension contributions and maintenance or support payments made to people outside the household.
After Housing Costs (AHC)
The After Housing Costs measure is measured by deducting certain housing costs from the Before Housing Costs measure. The housing costs include rent, mortgage interest payments (but not principal repayments), and other charges such as water charges and structural insurance premiums.
A household with no adult members in employment or self-employment and with at least one adult of non-pensionable age. Source: Department for Work and Pensions, Family Resources Survey 3 year average: 2002/03-2004/05
Black and minority Ethnic (BME)
Black and minority ethnic groups include all ethnic groups except White.
Someone who is disabled by physical and or social barriers.