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What Is Gross Monthly Household Income – And How Does It Affect You In Singapore?

Living under the same roof doesn’t mean you’re in the same household.

For better or worse, household income is one of the key metrics that the Singapore government uses in formulating many of its policies, and assessing whether or not you qualify for a particular scheme.

Household income determines the types of HDB flat you can buy, how much CPF Housing Grants you’ll receive (if at all), and whether you are eligible for social support, including recent Temporary Relief Fund.

We examine how household income is defined in Singapore, what per capita household income is, and clarify some of the misconceptions floating around this concept.

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What Is A Household – According To The Singapore Government

A household is a basic unit of society used by various branches of the Singapore government to assess needs and monitor outcomes when formulating policies.

It is little wonder that the Singapore Department of Statistics tracks numerous data points around households, including income, expenditure, size, age group, dwelling type, and whether it is nuclear or inter-generational.

As far as the government is concerned, the following is the definition of a household.

Source: SingStat

As we can see, there can be multiple households living in a same dwelling, such as unrelated tenants, and a single family can be spread across multiple households.

Read Also: 5 Earning And Spending Trends We Learned About Singapore Households From SingStat’s Household Expenditure Survey 2017/18

Household Income And Household Income Per Capita

As mentioned in the introduction, monthly household income is an important and common metric used as criteria for many government schemes.

Gross monthly household income is defined as the total amount of income – from employment or business – earned by all members from the same household, excluding foreign domestic workers. This includes amortisation of annual bonuses (1/12 of the amount) but excludes taxes.

Source: SingStat

Another important associated metric would be the gross monthly household income per capita, which is the gross monthly household income, divided by the number of members in the household. This would give an indication of the income-earning potential of the household relative to its needs, as reflected by the number of household members.

Read Also: Understanding Employment, Unemployment And Retrenchment In Singapore: Here’s What The Statistics Mean

Limitations To Using Household Income

As many have highlighted over the years, the household income metric isn’t a complete reflection of each person’s financial circumstances – and there probably will never be.

The most common issue being raised is that some might be unfairly penalised for simply living with (high income earning) family members with whom they have otherwise little financial relationship with or dependence on.

Another issue with this metric is that it doesn’t take into account one’s financial commitments. A household with a sole-breadwinner, a homemaker and 2 kids will have the same household income and per capita household income as another household with 2 retirees, a working adult, and someone who’s taking a sabbatical after working for a long time, though it is obvious that the latter household is much more financially independent.

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Balancing With Other Metrics And Being Flexible With Criterion

Due to the limitations of a single metric like household income as discussed above, it is seldom used as the sole determinant for how much social support one can receive or what kind of flat they qualify for.

Instead, household income and household income per capita is often just one criteria among many others, including annual value of property and ownership of property.

What is also clear is that household income changes over time, due to job circumstances or living arrangements, so even if we might not be eligible for a certain benefit, we could find ourselves qualifying in future.

Furthermore, another safeguard to ensure people get the help they need, even if they do not qualify because of a technicality, is the ability to appeal and have your case reviewed by the relevant officials.

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