Legislation sets out how child poverty is measured
The Child Poverty Reduction Act 2018 specifies three primary measures[8] of child poverty (and six supplementary measures): the after-housing-costs fixed-line measure (AHC50), which focuses on household incomes after the cost of housing, eg, after rent has been paid; the before-housing-cost moving-line measure (BHC50), which measures incomes before paying for housing costs; and material hardship, which aims to measure the living standards of a household through access to the basics. Given the complexity of the issue, it is important that these measures are considered together, as no single measure tells us the complete story of child poverty on its own. More information about these measures is outlined in the following table.
| After-housing-costs, fixed-line measure (AHC50) |
Before-housing-costs, moving-line measure (BHC50) |
Material hardship | |
|---|---|---|---|
| What does this measure? | The number of children in households with incomes much lower than a typical 2018 household, after they pay for housing costs and adjusting for the cost of living. | The number of children in households with much lower incomes than a typical household in the measurement year. | A direct measure of living standards and households going without the basics. It picks up the impact of the level of income and other resources, the costs of housing and other essentials, and other social and personal factors. |
| How do we measure it? | The threshold line is 50 percent of the median household income in 2017/18 adjusted for cost of living increases, and after housing costs are removed. | The threshold line is 50 percent of the median household income in the year measured. | The threshold line is a lack of six or more of the 17 items in the material deprivation index, which includes things like having two pairs of shoes in good condition and not putting off visits to the doctor. |
What does this tell us?
|
How many children are in households that have very low incomes relative to previous years, after considering housing costs and increases to the cost of living. | How many children are in households that have much lower incomes than typical households. An increase in median incomes leads to an increase in the threshold, which can make it harder to lift households out of poverty. | How many children are in households that do not have access to the essential items for living. |
Notes
- [8] Persistent poverty is the fourth primary measure, targets for which are required for and after the financial year commencing on 1 July 2025.