Housing affordability - short life working group: final report 2022 to 2024
As part of the Housing to 2040 strategy we committed to work with stakeholders to develop a shared understanding of affordability. The working group brought together experts from across Scotland’s housing sector. The final report of the group makes nine key recommendations to Ministers.
Annex 3 Illustration of the JRF Minimum Income Standard as Residual Income
Worked examples using the 2024 Joseph Rowntree Foundation Minimum Income Standard
The Joseph Rowntree Foundation Minimum Income Standard (MIS) is widely used to understand minimum thresholds of income for different kinds of households. Indeed, it forms the basis of the residual income calculation of the Scottish fuel poverty definition now enshrined in statute.
The table below looks at different weekly residual incomes after-housing costs (AHC), calculated from the 2024 MIS calculator spreadsheet. This follows on from the statutory fuel poverty definition which for its purposes takes 90% of the MIS. Here, we apply 100% of the after-housing costs MIS for different working age household combinations and then calculate 75% and 90% bands. The impact of equivalence scales for different household combinations (number of adults and children by age) is apparent. A single working age adult has a weekly MIS residual income (AHC) of just £293 while a working age couple with no children have an equivalent MIS of £459. Assuming children of pre-primary school age, a single parent with two 2-4 years age children requires a residual income £608; for a couple with two such children, the figure is £763. For further details, see Davis et al (2024).
| Household type illustrations | Weekly MIS budget (ie 100%) | 75% of AHC weekly MIS | 90% of AHC Weekly MIS |
|---|---|---|---|
| Single person working age | £293.22 | £219.91 | £263.89 |
| Couple working age | £489.05 | £366.78 | £440.14 |
| Single pensioner | £228.73 | £171.54 | £205.85 |
| Couple pensioner | £375.39 | £281.54 | £337.85 |
| Lone parent two children (2-4) | £608.01 | £456.00 | £547.20 |
| Couple two children (2-4) | £767.91 | £575.93 | £691.11 |
Source: Davis et al (2024) - Joseph Rowntree Foundation MIS Budget Calculator 2024
Note: After housing costs includes rent, council tax, water charges and childcare.