Adjusted after-tax income of person not in 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.

Person not in economic family refers to persons who do not live in an economic family. This includes persons who live with people, none of whom are related to them either by blood, marriage, common-law union, adoption or a foster relationship. Persons living alone are always included here.

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 persons not in an economic family, the adjusted after-tax income is equivalent to the after-tax income as the adjustment factor is equal to 1.

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Relation to previous version

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