Average household debt grows by 7.3%

Australian households are now more in debt with the latest figures showing average household debt grew by 7.3 per cent to $261,492 in 2021–22.

by | 13 Dec, 2022

Households not in crisis despite high debt

The figures from the Australian Bureau of Statistics include time series from 2003–04 to 2021–22 for five household indicators including equalised disposable income quintiles and age of reference person.

The figures showed that average household debt was $261,492 in 2021–22, while average household gross disposable income grew 3.7 per cent to $139,064.

When compared to the average of all households, the highest income quintile held 1.98 times the debt and 2.07 times the gross disposable income. In comparison, the lowest income quintile held 0.43 times the debt but had 0.39 times the gross disposable income relative to the average of all households.

Deposit assets (including savings and offset accounts with banks) provide liquidity buffers for expenses households may not be able to cover with their disposable income. In 2021–22, the average deposit assets held across all households grew 11.6 per cent to $144,669. Compared to the average of all households, the second income quintile had 0.66 times the deposit assets and 0.52 times the debt.

The lowest and highest income quintiles also had higher deposit asset ratios than their debt ratios, relative to the average of all households.

The lower income quintiles have higher proportions of retirees, who are likely to have larger deposit assets and lower levels of debt.

In 2019–20, households received $146.0 billion in social assistance benefits. As COVID-19 spread, the federal government in March and April 2020 implemented the Economic Support Payment and Coronavirus Supplement programs to assist households.

These COVID-19 support payments continued into 2020–21 with social assistance benefits paid to households reaching a record $162.2 billion.

In 2021–22, total social assistance benefits paid declined to $157.1 billion, coinciding with the end of these programs in March 2021 and a decline in the number of benefit recipients as the economy and labour market began to recover.

While households across all income quintiles received COVID-19 support payments, the majority of recipients were households in the lower income quintiles.

The lowest and second quintiles also had the largest fall in social assistance payments per household in 2021–22, decreasing $1,160 (-4.3 per cent) and $1,111 (-4.2 per cent) but remained at higher levels than 2019–20.

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