In 2020, SACOSS began looking at the development of new affordability indicators for energy, water and telecommunications. Modelled on the widely-used housing stress indicator, the indicators see affordability as a function of income, price and usage. We believe that the interaction of all three is critical to understanding affordability challenges.
SACOSS did a pilot data run to develop the indicators, with the results presented to the SACOSS energy, water and telecommunication conference in December 2020. The presentation was later written up and is available for download here.
Households are regarded as being in affordability stress for a particular utility if they are in the bottom two income quintiles and spend more than the following percentages of income on that service:
|% of Disposable Household Income||% of After-Housing Household Disposable Income|
For the reasons stated in the pilot project paper, SACOSS prefers the after-housing thresholds. Using these thresholds, households in stress were found to be around twice as likely as other low-income households to have been unable to pay an energy, water or telecommunications bill on time. However, more development of the concepts and data is required.
Download: Utilities Stress Pilot Project Write-Up