Adjusted after-tax income of economic family

Status: This standard was approved as a recommended standard on March 21, 2016.

Definition

Adjusted after-tax income refers to after-tax income of the statistical unit that is adjusted for economies of scale. The adjustment factor, also known as the equivalence scale, is the square root of the number of persons in the statistical unit. The adjusted after-tax income is calculated by dividing the after-tax income by this adjustment factor. The adjustment made to income addresses the fact that individuals living together can share resources and the marginal increase in need decreases as the number of individuals sharing resources increases.

Economic family refers to a group of two or more persons who live in the same dwelling and are related to each other by blood, marriage, common-law union, adoption or a foster relationship. A couple may be of opposite or same sex.

By definition, all persons who are members of a census family are also members of an economic family. Examples of the broader concept of economic family include the following: two co-resident census families who are related to one another are considered one economic family; co-resident siblings who are not members of a census family are considered as one economic family; and, nieces or nephews living with aunts or uncles are considered one economic family.

Usage

Adjusting income facilitates the comparison of income of different family or household sizes and comparisons to persons not in families, as the adjustment factors address the lower relative needs of additional members, as compared to a single person.

Adjusted income can be used to calculate statistics or to form deciles, quintiles and quartiles groups.

Measurements

  • 'Amount of income' is expressed in Canadian dollars. The data presentation should specify any adjustments made, including whether the unit of measure is current dollars or constant dollars. Amount of income can range from the lowest negative number on the file to the maximum positive number on the file. October 15, 2012 to current

Additional information

For economic families, adjusted after-tax income is computed as the economic family after-tax income divided by the square root of economic family size.

See:

Relation to previous version

  • Adjusted after-tax income of economic family March 21, 2016 to current

    This is the current standard.

  • Adjusted after-tax income of economic family September 11, 2013 to March 20, 2016

    This standard was replaced by a new recommended standard on March 21, 2016.

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