A budget standard indicates how much a particular family living in a particular place at a particular time needs in order to achieve a particular standard of living. This article presents new estimates that build on the earlier budget standards produced by the Social Policy Research Centre in the 1990s. The new budgets incorporate increases in consumer prices and community standards and reflect changes in item availability, retail practices and shopping behaviour, as well as improved research methods, 20 years of use and experience, and new data. They are designed to achieve a minimum income for healthy living standard and apply to families with a breadwinner who is either in full-time work and receiving the minimum wage, or unemployed and receiving Newstart Allowance. The estimates suggest that although the minimum wage is adequate for single people, it is not adequate to meet the needs of many couple families with and without children, while Newstart Allowance does not provide an adequate safety net for the unemployed, whatever their family status.

Equivalence scales, used to compare incomes across household types, strongly influence which households have low reported income, affecting public policy priorities. Yet they draw on abstract, often dated evidence and arbitrary judgements, and on comparisons across the income distribution rather than focusing on minimum requirements. Budget standards provide more tangible comparisons of the minimum required by different household types. The Minimum Income Standard (MIS) method, now established in several countries, applies a common methodological framework for compiling budgets, based on public deliberations. This article draws for the first time on results across countries. In all of the four countries examined, it identifies an under-estimation by the OECD scale of the relative cost of children compared to adults, and, in three of the four, an under-estimation of the cost of singles compared to couples. This more systematically corroborates previous, dispersed evidence, and helps explain which specific expenditure categories influence these results. These results have high policy relevance, showing greater proportions of low income households to contain children than standard income distribution data. While no single equivalence scale can be universally accurate, making use of evidence based directly on benchmarks such as MIS can help inform public priorities in tackling low income.

Minimum Income Standard (MIS) research involves an innovative methodology that combines consensual decisions made through discussion by members of the public, supported by input from experts. MIS addresses questions about income adequacy, and in particular, what is the income that people need in order to reach a minimum socially acceptable standard of living. The first MIS for Britain was published in the UK in 2008, and in 2010 researchers from Japan and the UK began to collaborate on developing a comparable Minimum Income Standard for Japan. This article discusses the differences and similarities between the UK and Japanese MIS. It looks at the challenges of applying the methodology in a very different setting and compares the results of the research in the UK and in Japan. Although there are notable differences in the lists of goods and services that comprise the budgets, there are also some striking similarities. This research suggests that the MIS methodology offers an approach that can be used in different countries to inform discussions on contemporary living standards and societal norms, and to enable international comparisons to be drawn.