Tackling child poverty delivery plan 2018-2022: annex 2

Detailed definitions of income and material deprivation

In order to calculate poverty, we use the following definition of income:

Earnings from employment and self-employment

Social security income (including Council Tax Reduction)

Cash value of certain benefits in kind (including Free School Meals and Healthy Start Vouchers)

Other cash income (including investment income, child maintenance, educational maintenance allowance)

Income is net of the following items:

Income tax and national insurance

Council Tax

Other payments (pension contributions, all maintenance and child support payments, parental contributions to students living away from home, student loan repayments)

And the definition of poverty used for the Child Poverty Act is also net of Housing Costs:

Rent, water rates, mortgage interest payments, structural insurance premiums, ground rent and service charges.

For the purposes of the material deprivation measure, ability to afford the following goods and services are assessed:

Child items
(1) Outdoor space or facilities nearby to play safely
(2) Enough bedrooms for every child over 10 of different sex to have his or her own bedroom
(3) Celebrations on special occasions such as birthdays, Christmas or other religious festivals
(4) Leisure equipment (for example, sports equipment or a bicycle)
(5) A holiday away from home at least one week a year with his or her family
(6) A hobby or leisure activity
(7) Friends round for tea or a snack once a fortnight
(8) Going on a school trip at least once a term for school-aged children
(9) Play group/nursery/toddler group at least once a week for children of pre-school age
(10) Attends organised activity outside school each week
(11) Fresh fruit and vegetables eaten by children every day
(12) Warm winter coat for each child

Adult items
(13) Enough money to keep home in a decent state of decoration
(14) A holiday away from home for one week a year, not staying with relatives
(15) Household contents insurance
(16) Regular savings (of £10 a month) for rainy days or retirement
(17) Replace any worn out furniture
(18) Replace or repair broken electrical goods such as refrigerator or washing machine
(19) A small amount of money to spend each week on yourself
(20) In winter, able to keep accommodation warm enough
(21) Keep up with bills and regular debt payments

A prevalence weighted approach has been used, in combination with a relative low income threshold. The income threshold is 70 per cent of the median income. Prevalence weighting is a technique of scoring deprivation in which more weight in the deprivation measure is given to households lacking those items that most in the population already have. This means a greater importance, when an item is lacked, is assigned to those items that are more commonly owned in the population.

More information can be found in the Scottish Government’s statistical publication on Poverty and Income Inequality in Scotland, available here.