Author Topic: Minimum income for a healthy life (Australia)  (Read 1577 times)

Freshwater

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Minimum income for a healthy life (Australia)
« on: August 22, 2017, 07:14:44 PM »
This article might be a useful data point for Australians thinking about their budget.

A study has found that a single working person with no kids needs a minimum of $600pw / $31,200 pa to live a healthy life. A couple without kids needs $830 pw / $43,160. The amounts are lower for the unemployed, I guess it assumes little travel. These figures include rent (not sure what the actually amount is for a single or couple but for a family it assumes $460pw) but zero luxuries.

http://www.smh.com.au/comment/revealed-the-minimum-income-for-a-healthy-life-and-how-the-dole-falls-way-short-20170821-gy1a21.html

What do you think? How does it compare to your bare bones budget?


HappierAtHome

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Re: Minimum income for a healthy life (Australia)
« Reply #1 on: August 22, 2017, 08:10:44 PM »
Interesting that it says 'no luxuries' but includes a few drinks a week.

Still pondering it, might have more meaningful comments to make later :-)

Ozstache

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Re: Minimum income for a healthy life (Australia)
« Reply #2 on: August 22, 2017, 09:53:24 PM »
As a couple, our barebones budget is $19K pa excluding rent (as we own our own place). Adding in $460 a week rent would put us right on the $43K pa for a couple stated in the article and a similarly meagre existence. Fortunately, we don't need to be so bare bones in our approach, but it is interesting to know how far we could pare back if we had to.

bigchrisb

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Re: Minimum income for a healthy life (Australia)
« Reply #3 on: August 22, 2017, 10:17:04 PM »
I saw this article this morning.  Interesting read.  I'm unconvinced about some of the inclusions as being actually "bare bones", and I'm on a high income, but choose to shop at aldi and take advantage of coupons...  Never the less, its a useful data point.

The other conclusion I took from this (which the sponsors, ACOSS and United Voice choose not to mention) is that the age pension ($888/fortnight, $353/fortnight higher than Newstart) is $75/week above their "bare bones" budget.  Gives Australian's a very useful safety net if they do draw down their whole portfolio.  This makes a "SWR failure" scenario much less harmful, and inclines me to think that Australian's can probably get away with slightly higher draw down rates, due to this form of social worst case insurance!

Freshwater

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Re: Minimum income for a healthy life (Australia)
« Reply #4 on: August 22, 2017, 10:25:19 PM »
Interesting that it says 'no luxuries' but includes a few drinks a week.

Still pondering it, might have more meaningful comments to make later :-)

'straya, eh? Got to have a drink!

Freshwater

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Re: Minimum income for a healthy life (Australia)
« Reply #5 on: August 22, 2017, 10:32:24 PM »
I saw this article this morning.  Interesting read.  I'm unconvinced about some of the inclusions as being actually "bare bones", and I'm on a high income, but choose to shop at aldi and take advantage of coupons...  Never the less, its a useful data point.

The other conclusion I took from this (which the sponsors, ACOSS and United Voice choose not to mention) is that the age pension ($888/fortnight, $353/fortnight higher than Newstart) is $75/week above their "bare bones" budget.  Gives Australian's a very useful safety net if they do draw down their whole portfolio.  This makes a "SWR failure" scenario much less harmful, and inclines me to think that Australian's can probably get away with slightly higher draw down rates, due to this form of social worst case insurance!

I imagine pharmacy costs and various help you might need as you get older might easily eat up that $75, but then half the population would probably be living mortgage free and have quite a chunk for luxuries.

samusugiru

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Re: Minimum income for a healthy life (Australia)
« Reply #6 on: August 23, 2017, 06:59:55 AM »
 I commented on this article under "money moustache, " ☺
I think the sums were quite generous, for eg they budgeted $80 a week for extra-curricular activities for the 2 children family. That's  $4,160 pa. We send our kids to the fancy pants Sydney Conservatory for music lessons, 2k pa which is less than half the budget they had down. Museum membership is 80 a year so I have no idea what fancy extra curriculars they are doing to spend twice as much as we do. There were other areas they could cut back on, utilities and other household expenses were high and they assume families need a room for each child. We budget around the same, except we include a trip to Europe in that amount and I don't consider our budget bare bones. So much free stuff for families these days, they've seen numerous concerts for free, free bike riding lessons in the park, free museum open days. Big w has big sales for school supplies and y he kids get a birthday invite to some fun activity every second weekend. Bought their bikes and scooters from Gumtree and will sell them back when they outgrow them. Our gas and electricity are 300 a quarter and that's using an old fridge that isn't energy efficient.

I will say, aussies have it good, two minimum wage earners can easily support a family on their budget. I wouldn't say the same for someone in the UK.

limeandpepper

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Re: Minimum income for a healthy life (Australia)
« Reply #7 on: August 24, 2017, 03:49:23 AM »
A study has found that a single working person with no kids needs a minimum of $600pw / $31,200 pa to live a healthy life. A couple without kids needs $830 pw / $43,160.

What do you think? How does it compare to your bare bones budget?

Um... assuming no unfortunate circumstances such as expensive medical bills and whatnot, to me that's a comfortable, even luxurious life. I'm actually kind of disgusted that they're describing it as the "minimum" for a "healthy" life, lol.

When I was living in Melbourne a few years ago my annual expenses were around $20k/year. This was sharing a two-bedroom apartment in a great convenient suburb, eating well (and also eating out), martial arts classes, and the occasional holiday. Let's say with inflation that will now be more like $25k/year... still several thousand less than $31.2k AND it's for a life that I personally regard as well above basic.

marty998

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Re: Minimum income for a healthy life (Australia)
« Reply #8 on: August 24, 2017, 04:08:18 AM »
I think I'm around $20k too... probably less. It's not luxury, but its certainly comfortable.

Freshwater

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Re: Minimum income for a healthy life (Australia)
« Reply #9 on: August 24, 2017, 04:35:46 AM »
Marty, L&P - I think they are saying you need to eat another $200 of fruit and veg a week, ha ha!

I couldn't find the original piece with the breakdown, does someone have a link?

limeandpepper

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Re: Minimum income for a healthy life (Australia)
« Reply #10 on: August 24, 2017, 07:34:51 AM »
Found this PDF with the breakdown of costs:

http://apo.org.au/system/files/103781/apo-nid103781-420196.pdf

The housing costs are on the high side... I can perhaps understand it for Sydney but otherwise just no. Unless everyone "deserves" to have a place of their own and never sharehouse in their life.

Single Adult Rent: $315.80/week

Interestingly, Couple with no children, Couple with one 6-year-old, and Single Parent with one 6-year-old all get the same estimate of $392.50/week allocation for rent. I'm guessing they all get a 2-bedroom apartment, even though a couple with no kids can do fine with a 1br.

From the document:

Quote
It is important to emphasise that the guiding principle that underpins the new budgets was that all items, prices and lifetimes were chosen to ensure that the budgets reflect the minimal monetary amounts required to achieve the MIHL standard. The aim was to produce budgets that reflect how much is required to satisfy basic needs, not to allow people to acquire all that they want. There is no allowance for even the most modest or occasional ‘luxuries’ and wastage was kept to an absolute minimum. The budgets are thus extremely ‘tight’ and provide no room for further reductions without compromising the attainment of the MIHL standard.

No allowance for even the modest or occasional luxuries and wastage kept to a minimum? Budgets are extremely tight? Sorry I don't buy that when they're being so generous with rent.

I note that when people are unemployed (rather than just low-income), then suddenly the allocated weekly rent is about $100 cheaper.

The document explains away the difference with:

Quote
This difference reflects several factors, including the increased costs associated with working, the higher MIHL standard applied to those in work and the cost saving strategies used by those who are unemployed.

P.S. I also learned from this document that apparently all this time I have been living under the poverty line...

Freshwater

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Re: Minimum income for a healthy life (Australia)
« Reply #11 on: August 24, 2017, 02:33:43 PM »
Share places are $300pw where I am and a crappy one bed is $450 or more but of course the study picked cheap outer suburbs, so yes, I guess they are assuming no sharing. I think as you get older sharing would be pretty unappealing. Not sure why a couple must have 2 beds, we had a studio for a while, was great!

Thanks for the link.

limeandpepper

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Re: Minimum income for a healthy life (Australia)
« Reply #12 on: August 25, 2017, 01:20:21 PM »
Yeah, and I give a bit more leeway for Sydney rent, but the study takes data from Melbourne and Brisbane as well so I think the overall figure for rent should be lower. Also I get that most people would prefer to not share, which is fine if they can afford it, but if the study is going to be about what's "minimum" and "basic", then not taking into account sharehousing is a huge fail for me.

stashgrower

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Re: Minimum income for a healthy life (Australia)
« Reply #13 on: August 26, 2017, 10:55:17 PM »
I think the budget is generous! I could add several luxuries to my healthy life and still come in under the report's amounts. I agree that housing reduction/sharing is an option.

Edited for clarity.

Kuznec

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Re: Minimum income for a healthy life (Australia)
« Reply #14 on: September 06, 2017, 01:26:55 PM »
You have a very expensive life in Australia. We have a family with two children can comfortably live at 4 000 per year.

Freshwater

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Re: Minimum income for a healthy life (Australia)
« Reply #15 on: September 06, 2017, 05:01:48 PM »
You have a very expensive life in Australia. We have a family with two children can comfortably live at 4 000 per year.

And where do you live? I imagine our average earnings are a lot higher too. Someone working in a minimum wage job can earn $35k easily enough.