Income Research Paper Series – Research Paper
Low Income Lines, 2013-2014
Low income rate and low income gap ratio
Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please "contact us" to request a format other than those available.
To determine whether a person is in low income, the appropriate low income line (LIL) is compared to the income of the person’s familyNote 1 (or household)Note 2. If their income is below the LIL, the individual is considered to be in low income. In other words, “persons in low income” should be interpreted as persons who are part of low income families (or households), including persons living alone whose income is below the LIL. Similarly, “children in low income” means “children who are living in low income families (or households)”. Overall, the low income rate for persons can then be calculated as the number of persons in low income divided by the total population. The same can be done for various sub-groups of the population; for example, low income rates by age, sex, or province.
After having determined that an individual is in low income, the low income gap ratio can be calculated by using the amount that the person’s family (or household) income falls short of the LIL, expressed as a percentage of the LILNote 3. For example, an individual living in a family (or household) with an income of $15,000 and a LIL of $20,000 would have a low income gap of $5,000. In percentage terms, the “gap ratio” would be 25%.Note 4 The average gap ratio for a given population is the average of these values as calculated for each person.