About this dashboard

• Title: Financial vulnerability of Austrian households
• Number: 5/2020
• Date: June 22, 2020
• Author: HFCS Team, OeNB (Austrian Central Bank) & Maximilian Propst (WU, Vienna)
• Data: HFCS Austria 2017, OeNB

What we do

• This dashboard is the sixth in our series of Household Finance and Consumption Survey (HFCS) dashboards.
• Each dashboard is designed to provide concise information on a specific topic.
• All information displayed - be it figures, tables or text - is based on HFCS data.

Who we are

• We are the HFCS team of the Oesterreichische Nationalbank (OeNB).
• As such, we are tasked with collecting and analyzing data on Austrian households’ finances and consumption.
• For more information on the HFCS in Austria, visit our website for the HFCS Austria.
• For general information on the Eurosystem’s HFCS, visit the website of the ECB’s Household Finance and Consumption Network (HFCN).

How to contact us

• If you have any questions ask us using our contact tool.

Find out more by clicking on the Question tab!

Question

How do Austrian households make ends meet?

To begin with, let us take a look at the specialist terms we will be using throughout the dashboard:

Terms revolving around income

Net household income = combined annual net income of all members of a household

Net household income includes:

• income from labor (including employment and self-employment income);
• income from real assets (e.g. through renting out real estate property), from financial assets (e.g. from saving accounts) or from private businesses;*
• income from pensions or other social transfers (e.g. unemployment benefits or child-care benefits); and
• income from other sources (e.g. private transfers).
• Non-cash income (e.g. imputed rents) is not included.

**For income from real estate property and private businesses, we assume gross values to be equal to net values, since there are no net values in the HFCS.*

Decile = one of the values of a variable that divides the frequency distribution of the variable into 10 equal groups, so that each group represents 1/10 of the total population

• Income deciles, for example, consist of 9 values that divide the household income distribution into 10 equal groups. Households with the smallest income lie in the 1st decile and those with the largest income lie in the 10th decile.

Equivalized net household income = net household income per consumption unit

• To be able to compare household income, we need to adjust each household’s income for its size (= “equivalizing”). Two-or-more-person households can share some living costs (e.g. electricity or food costs). Moreover, children might not consume as much as adults. To take account of these differences in consumption, we defined consumption units based on the OECD-modified equivalence scale. According to this scale, the head of the household accounts for 1 consumption unit, and every additional household member older than 13 years for 0.5. Household members who are 13 years or younger account for 0.3 consumption units.

Terms revolving around vulnerability

At-risk-of-poverty households = households with a net income of less than 60% of the median equivalized net household income

Debt-to-income (DTI) ratio = sum of debt divided by total household income (gross, annual)

• A household is considered as potentially financially vulnerable if its DTI ratio is greater than or equal to 3.

Debt-to-asset (DTA) ratio = sum of debt divided by total household assets

• A household is considered as potentially financially vulnerable if its DTA ratio is greater than or equal to 0.75.

Main background facts for Austria

• Net household income is more evenly distributed across Austria than net wealth.
• Income from assets is more unequally distributed than income from labor.
• Single-parent households are particularly financially vulnerable.
• Households in western Austria can cover potential income losses longer than households in eastern Austria.
• When in financial difficulties, Austrian households draw on their savings, if possible. Otherwise, they ask friends and family for help, rather than going into debt.

For detailed information on the methodology, please refer for the Austrian HFCS to the methodological notes and the first results and for the Eurosystem HFCS to the methodological report and the results report.

is the median equalized net household income in Austria per month.

How many households have higher expenditures than income?

How many of these households can cover higher expenditures using their savings?

Find out more by clicking on the Answer tabs!