Definition: Disposable income of households

Category: National accounts

Disposable income of households may be defined as the net amount they have earned, or received as social transfers, during the accounting period excluding exceptional flows linked to capital transfers or changes in the volume/value of their assets. It is mainly composed of wages received, revenues of the self-employed and net property income such as interest received on deposits minus interest paid on loans and dividends.

Adjusted gross disposable income also includes social transfers in kind that account for the flows of individual services which are provided free of charge by the government. These services mainly consist of education, health and social services but also housing, cultural and recreational services. (…) They exclude collective services that are provided simultaneously to all members of the community, such as security and defence, legislation and regulation.

Adjusted disposable income improves the comparison of income levels across countries by taking into account the different degrees of involvement of governments in the provision of free services to households. http://ec.europa.eu/eurostat/product?code=KS-SF-09-029&mode=view