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Government definitions of low income households are set out in the annual National Statistics publication Households Below Average Income. Someone is in absolute low income (commonly referred to as ‘absolute poverty’), if they are in a household that received less than 60% of the UK median equivalised net household income in 2010/11, adjusted for inflation.
Absolute low income is measured both before and after housing costs. Housing costs include; rent (gross of housing benefit); water rates, community water charges and council water charges; mortgage interest payments; structural insurance premiums (for owner occupiers); ground rent and service charges.