The indicator describes the distribution of disposable money income of households and income differentials between different socio-economic groups.
Disposable money income is arrived at when current transfers paid are deducted from gross income. The household's current transfers paid are mainly formed of direct taxes and social security contributions. In addition, current transfers paid include compulsory pension and unemployment insurance premiums and child maintenance support paid.
Equivalent income is the household's disposable money income divided by the number of consumption units in the household. In consumption unit scale the first adult of the household receives the weight 1, other over 13-year-olds receive the weight 0.5 and children receive the weight 0.3 (0 to 13-year-olds are defined as children). Equivalent income is an income concept by which incomes of households of different types are made comparable by taking account of shared consumption benefits.
The socio-economic group of the household is determined by the household's reference person.