Commission Regulation (EC) No 1980/2003 of 21 October 2003 implementing Regulation (EC) No 1177/2003 of the European Parliament and of the Council concerning Community statistics on income and living conditions (EU-SILC) as regards definitions and updated definitions (Text with EEA relevance.)

Article 1

The definitions required by Article 15(2)(c) of Regulation (EC) No 1177/2003 on Community statistics on income and living conditions, in particular for the purpose of bringing into operation the income definitions given in Article 2(l) and (m) thereof, shall be as laid down in Annex I.

The conditions for delivering gross income data at component level as well as the timetable for inclusion of the different income components shall be as laid down in Annex II.

Article 2

The definitions given in this Regulation, with the exception of that of former household members, and the delivery of income data, shall be applied to both cross-sectional and longitudinal components of Community statistics on income and living conditions (EU-SILC).

Article 3

This Regulation shall enter into force on the 20th day following that of its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

ANNEX I

1. HOUSEHOLD MEMBERS AND FORMER HOUSEHOLD MEMBERS

1.1.   Household membership(²)

Subject to the further and specific conditions shown below, the following persons must, if they share household expenses, be regarded as household members:

Further conditions for inclusion as household members are as follows:

(a) Categories 3, 4 and 5: Such persons must currently have no private address elsewhere; or their actual or intended duration of stay must be six months or more.

(b) Category 6: Such persons must currently have no private address elsewhere and their actual or intended duration of absence from the household must be less than six months. Categories 7 and 8: Irrespective of the actual or intended duration of absence, such persons must currently have no private address elsewhere, must be the partner or child of a household member and must continue to retain close ties with the household and must consider this address to be his/her main residence.

(c) Category 9: Such person must have clear financial ties to the household and must be actually or prospectively absent from the household for less than six months.

Shares in household expenses include benefiting from expenses (e.g. children, persons with no income) as well as contributing to expenses. If expenses are not shared, then the person constitutes a separate household at the same address.

A person shall be considered as a usually resident member of the household if he/she spends most of his/her daily rest there, evaluated over the past six months. Persons forming new households or joining existing households shall normally be considered as members at their new location; similarly, those leaving to live elsewhere shall no longer be considered as members of the original household. The abovementioned ‘past six month’ criteria shall be replaced by the intention to stay for a period of six months or more at the new place of residence.

Account has to be taken of what may be considered as ‘permanent’ movements in or out of households. Thus a person who has moved into a household for an indefinite period or with the intention to stay for a period of six months or more shall be considered as a household member, even though the person has not yet stayed in the household for six months, and has in fact spent a majority of that time at some other place of residence. Similarly, a person who has moved out of the household to some other place of residence with the intention of staying away for six months or more, shall no longer be considered as a member of the previous household.

If the person who is temporarily absent is in private accommodation, then whether he/she is a member of this (or the other) household depends on the length of the absence. Exceptionally, certain categories of persons with very close ties to the household may be included as members irrespective of the length of absence, provided they are not considered members of another private household.

In the application of these criteria, the intention is to minimise the risk that individuals who have two private addresses at which they might potentially be enumerated are not double-counted in the sampling frame. Similarly, the intention is to minimise the risk of some persons being excluded from membership of any household, even though in reality they belong to the private household sector.

1.2.   Former household member

The term ‘former household member’ refers to a person who is not a current member of the household and was not recorded as a household member in that household in the previous wave, but who lived in the household for at least three months during the income reference period.

The former household members shall be included only in the EU-SILC longitudinal component.

2. GROSS INCOME COMPONENTS

2.1.   Employee income

Employee income is defined as the total remuneration, in cash or in kind, payable by an employer to an employee in return for work done by the latter during the income reference period.

The employee income is broken down into:

This refers to the monetary component of the compensation of employees in cash payable by an employer to an employee. It includes the value of any social contributions and income taxes payable by an employee or by the employer on behalf of the employee to social insurance schemes or tax authorities.

Gross cash or near-cash employee income includes the followings items:

— wages and salaries paid in cash for time worked or work done in main and any secondary or casual job(s),

— remuneration for time not worked (e.g. holiday payments),

— enhanced rates of pay for overtime,

— fees paid to directors of incorporated enterprises,

— piece rate payments,

— payments for fostering children,

— commissions, tips and gratuities,

— supplementary payments (e.g. 13th month payment),

— profit-sharing and bonuses paid in cash,

— additional payments based on productivity,

— allowances paid for working in remote locations (regarded as part of the conditions of the job),

— allowances for transport to or from work,

— additional payments made by employers to their employees or former employees and other eligible persons to supplement the sick, disability, maternity leave or survivors' pay entitlement from social insurance schemes, where such payments cannot be separately and clearly identified as social benefits,

— payments made by employers to an employee in lieu of wages and salaries through a social insurance scheme when unable to work through sickness, disability or maternity leave where such payment cannot be separately and clearly identified as social benefits.

It does not include:

— reimbursements made by an employer for work-related expenses (e.g. business travel),

— severance and termination pay to compensate employees for employment ending before the employee has reached the normal retirement age for that job and redundancy payments (they are included under ‘Unemployment benefits’ (PY090G)),

— allowances for purely work-related expenses such as those for travel and subsistence or for protective clothes,

— lump-sum payments at the normal retirement date (included under ‘Old age benefits’ (PY100G)),

— union strike pay.

This refers to the non-monetary income components which may be provided free or at a reduced price to an employee as part of the employment package by an employer (³).

Gross non-cash employee income includes:

— company car and associated costs (e.g. free fuel, car insurance, taxes and duties as applicable) provided for either private use or both private and work use,

— free or subsidised meals, luncheon vouchers,

— reimbursement or payment of housing-related expenses (e.g. gas, electricity, water, telephone or mobile telephone bills),

— other goods and services provided free or at a reduced price by the employer to their employees, when they are a significant component of the income at national level or they constitute a significant component of the income of particular groups of households.

The value of goods and services provided free shall be calculated according to the market value of these goods and services. The value of the goods and services provided at a reduced price shall be calculated as the difference between the market value and the amount paid by the employee.

It does not include:

— the cost of providing any of these goods and services for the employer if they are only required for the employees to carry out their work,

— accommodation services at a place of work which cannot be used by the households to which the employees belong,

— accommodation provided free or at reduced rent by the employer to the employees as the main residence of the household (the imputed value of the accommodation provided free or at reduced rent is included under ‘Imputed rent’ (HY030G)),

— accommodation provided free or at reduced rent to an employee as the secondary residence of the household,

— allowances paid to employees for the purchase of tools, equipment, clothes, etc. needed exclusively or primarily for their work,

— special meals or drinks necessitated by exceptional working conditions,

— any goods or services provided to employees at the place of work or required because of the nature of their work (e.g. a medical examination required for work).

Employers' contributions are defined as payments made, during the income reference period, by employers for the benefits of their employees to insurers (social security funds and private funded schemes) covering statutory, conventional or contractual contributions in respect of insurance against social risks.

It includes:

— employers' contributions to private retirement (pension) plans,

— employers' contributions to private health insurance,

— employers' contributions to life insurance,

— employers' contributions to other employer insurance schemes (e.g. disability),

— employers' contributions to government insurance (social security) schemes (including payroll taxes levied for social insurance purposes).

2.2.   Self-employment income

Self-employment income is defined as the income received, during the income reference period, by individuals, for themselves or in respect of their family members, as a result of their current or former involvement in self-employment jobs. Self-employment jobs are those jobs where the remuneration is directly dependent upon the profits (or the potential for profits) derived from the goods and services produced (where own consumption is considered to be part of profits). The self-employed person makes the operational decisions affecting the enterprise, or delegates such decisions while retaining responsibility for the welfare of the enterprise. (In this context, ‘enterprise’ includes one-person operations). The remuneration of hobbies shall be regarded as self-employment.

If the income collected or compiled corresponds to a time period earlier than the reference period, basic adjustments shall be applied to update the data to the income reference period.

The self-employment income is broken down into:

It includes:

— net operating profit or loss accruing to working owners of, or partners in, an unincorporated enterprise, less interest on business loans,

— royalties earned on writing, inventions and so on, not included in the profit/loss of unincorporated enterprises,

— rentals from business buildings, vehicles, equipment, etc., not included in the profit/loss of unincorporated enterprises, after deduction of related costs such as interest on associated loans, repairs and maintenance and insurance charges.

It does not include:

— directors' fees earned by owners of incorporated enterprises (which are included under ‘Gross cash or near-cash employee income’ (PY010G)),

— dividends paid by incorporated enterprises (which are included under ‘Interest, dividends, profits from capital investment in an unincorporated business’ (HY090G)),

— profits from capital invested in an unincorporated enterprise in which the person does not work (‘sleeping partners’) (these profits are included under ‘Interest, dividends, profits from capital investment in an unincorporated business’ (HY090G)),

— rent from land and receipts from boarders or lodgers (which are included under ‘Income from rental of a property or land’ (HY040G)),

— rentals from dwellings not included in the profit/loss of unincorporated enterprises (which are included under ‘Income from rental of a property or land’ (HY040G)).

Income from self-employment shall be calculated as:

— market output (gross revenue to turnover, including the value of goods produced by the enterprise but consumed by the self-employed person or his/her household),

— plus market value of goods and services bought for the unincorporated enterprise but consumed by the entrepreneur and his/her household members,

— plus property income received in connection with financial and other assets belonging to the enterprise,

— minus intermediate consumption (raw material costs, costs of sales, distribution costs, maintenance costs, administrative expenses, etc.),

— minus compensation of employees (wages, salaries and social security contributions for employees),

— minus taxes on production and import taxes,

— minus interest paid on business loans,

— minus rents paid on land and other non-produced tangible assets rented by the enterprise,

— minus consumption of fixed capital,

— plus subsidies.

In practice if the self-employed person or business prepares annual accounts for tax purposes, the gross income benefits/losses shall be calculated as net operating benefits/losses shown on this tax account for the most recent 12-month period, before deduction of taxes on income and compulsory social insurance contributions.

In the absence of annual accounts, either for tax purposes or as a business account, the alternative approach to measure self-employment income shall be to collect the amount of money (and goods) drawn out of the business for personal use (for consumption or saving, including the market value of goods produced or purchased by the business but taken for personal use).

The value of goods produced for own consumption refers to the value of food and beverages produced and also consumed within the same household.

The value of goods produced for own consumption shall be calculated as the market value of goods produced deducting any expenses incurred in the production.

The value of food and beverages shall be included when they are a significant component of the income at national level or they constitute a significant component of the income of particular groups of households.

This value does not include:

— value of household services,

— any production for sale and any withdrawals from a business by a self-employed person (these values are included under ‘Gross income benefits or losses from self-employment’ (including royalties) (PY050G)).

2.3.   Imputed rent

The imputed rent refers to the value that shall be imputed for all households that do not report paying full rent, either because they are owner-occupiers or they live in accommodation rented at a lower price than the market price, or because the accommodation is provided rent-free.

The imputed rent shall be estimated only for those dwellings (and any associated buildings such a garage) used as a main residence by the households.

The value to impute shall be the equivalent market rent that would be paid for a similar dwelling as that occupied, less any rent actually paid (in the case where the accommodation is rented at a lower price than the market price), less any subsidies received from the government or from a non-profit institution (if owner-occupied or the accommodation is rented at a lower price than the market price), less any minor repairs or refurbishment expenditure which the owner-occupier households make on the property of the type that would normally be carried out by landlords.

The market rent is the rent due for the right to use an unfurnished dwelling on the private market, excluding charges for heating, water, electricity, etc.

2.4.   Property income

Property income is defined as the income received less expenses accruing, during the income reference period, by the owner of a financial asset or a tangible non-produced asset (land) in return for providing funds to or putting the tangible non-produced asset at the disposal of another institutional unit.

The property income is broken down into: