Distribution and Use of Income Accounts Main entries and Data Needs

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1 An Introduction to System of National Accounts Integrated Transaction Accounts Lesson: VI Part 1 Distribution and Use of Income Accounts Main entries and Data Needs Second Intermediate-Level e-learning Course on 2008 System of National Accounts October - December 2013

2 Contents Primary Income and its Distribution Primary income and its distribution Secondary distribution and redistribution of income Social transfers in kind Rerouting of insurance related transactions Use of Income

3 Primary Income and its Distribution

4 Primary Income and its Distribution Distribution of Primary Income GVA Institutional Units participating in production donations gifts remittances Other Institutional Units

5 Primary Income and its Distribution Social Transfer in Kind Also called tertiary distribution of income : Social Transfers in Kind Non-market production of services by government and NPISHs for individual consumption Purchase & delivery of goods & services by government and NPISHs to households

6 Primary Income and its Distribution Incomes in Main Accounts Distribution of income as reflected in the main accounts of the system is as follows Income generated from domestic production GVA / GDP Allocation of primary income Balance of primary Income / GNI Secondary distribution of income Disposable income / GNDI

7 Primary Income and its Distribution Distribution of Income in Kind Social transfers in kind are reflected in a separate account of the system Disposable income / GNDI Social transfers in kind Adjusted Disposable income / adjusted GNDI

8 Insurance schemes Insurance Scheme - Rerouting Non-Life Insurance: HFCE / IC Policy Holders Use of output (implicit) Service charges (implicit) Premiums Premium supplements Benefits Output Insurance Corporations Investment of reserves Investment Income Financial Market

9 Insurance schemes Social Securities transactions involved Employers Households: Employees Self-employeds non-employeds Contributions CE Contributions Contributions Benefits Social Security: General Government

10 Insurance schemes Employment-related Funded Social Insurance CE Employer contribution HFCE Beneficiary households contribution Service charges contribution contribution supplements Benefits Output Insurance Corporations Investment of reserves Investment Income Financial Market

11 Use of Income

12 Use of Income Use of Disposable Income Disposable income of institutional units gets distributed as follows by uses: Disposable income / GNDI

13 Use of Income Use of Income in Accounts Distribution of income as reflected in the use of disposable income account and use of adjusted disposable income accounts as follows: Disposable income / GNDI Final consumption Change in pension entitlements Savings Adjusted Disposable income / GNDI Actual final consumption Change in pension entitlements Savings

14 End of Part-1 Lesson VI

15 An Introduction to System of National Accounts Integrated Transaction Accounts Lesson: VI Part 2 Distribution and Use of Income Accounts Main entries and Data Needs Second Intermediate-Level e-learning Course on 2008 System of National Accounts October - December 2013

16 Contents Distribution of Income Accounts by institutional sectors Use of Income by institutional sectors

17 Distribution of Income Accounts by institutional sectors

18 Distribution of Income Account Underlying Identity Allocation of Primary income Account Balance of primary income / GNI (CE + OS & MI) generated in domestic enterprises + production (t-s) + (t-s) on imports + CE from RoW (net) + PI from RoW (net) OR Balance of primary income / GNI GDP + (net) compensation of employees from RoW + Property income receivable from non-residents - Property income payable to non-residents

19 Distribution of Income Account Underlying Identity Secondary Distribution of Income Account GNDI GNI + (net) current transfers from RoW + (net) taxes on income & wealth from RoW

20 Allocation of Primary Income Account Accounting Structure Allocation of Primary Income Account Uses Resources B.2g & B.3g OS+MI (gross) Property income payable CE (net of payable to RoW) Property income receivable Production & import taxes Subsidies ( - ) B.4g Balance of primary income / GNI CFC B.4n Balance of primary income / NNI

21 Allocation of Primary Income Account Accounting Structure (Contd.) Uses Resources Secondary Distribution of Income Account Current taxes on income & wealth, etc. Net Social contributions Social benefits (excl. in kind) Other current transfers Balance of primary incomes (GNI) Current taxes on income & wealth, etc. Net Social contributions Social benefits (excl. in kind) Other current transfers B.6g GNDI CFC B.6n NNDI

22 Allocation of Primary Income Account Household Sector try yourself [using data in Box 6.4] Uses Resources Allocation of Primary Income Account B.2g OS / B.3g MI (gross) 1010 Compensation of employees 2600 (net of payable to RoW) 400 Property income payable Property income receivable 224 Production & import Taxes 3434 B.4g Balance of PI / GNI Subsidies (-)

23 Allocation of Primary Income Account Household Sector try yourself [using data in Box 6.4] Uses Secondary Distribution of Income Account Resources 250 Current taxes on income & wealth, etc. Balance of primary incomes (GNI) 3434 Current taxes on income & wealth, etc. 170 Net Social contributions Net Social contributions Social benefits (excl. in kind) Social benefits (excl. in kind) Other current transfers Other current transfers B.6g GNDI

24 Allocation of Primary Income Account Government try yourself [using data in Box 6.4] Uses Resources Allocation of Primary Income Account B.2g OS / B.3g MI (gross) 35 Compensation of employees (net of payable to RoW) 60 Property income payable Property income receivable B.4g Balance of PI / GNI Production & import Taxes 500 Subsidies (-)

25 Allocation of Primary Income Account Government try yourself [using data in Box 6.4] Uses Secondary Distribution of Income Account Resources Current taxes on income & wealth, etc. Balance of primary incomes (GNI) 495 Current taxes on income & wealth, etc Net Social contributions Net Social contributions 50 Social benefits (excl. in kind) Social benefits (excl. in kind) 25 Other current transfers Other current transfers B.6g GNDI

26 Allocation of Primary Income Account Commercial Bank try yourself [using data in Box 6.4] Uses Resources Allocation of Primary Income Account B.2g OS / B.3g MI (gross) 430 Compensation of employees (net of payable to RoW) 1620 Property income payable Property income receivable 2020 Production & import Taxes 830 B.4g Balance of PI / GNI Subsidies (-)

27 Allocation of Primary Income Account Commercial Bank try yourself [using data in Box 6.4] Uses Secondary Distribution of Income Account Resources 30 Current taxes on income & wealth, etc. Balance of primary incomes (GNI) 830 Current taxes on income & wealth, etc. Net Social contributions Net Social contributions Social benefits (excl. in kind) Social benefits (excl. in kind) 0 Other current transfers Other current transfers B.6g GNDI

28 Use of Disposable Income Accounts by institutional sectors

29 Use of Income Account Household Sector try yourself [using data in Box 6.4] Uses Resources Use of Disposable Income B.6g GNDI FCE Adjustments for changes in pension entitlements Adjustments for changes in pension entitlements 827 B.8g Gross savings

30 Use of Income Account Government try yourself [using data in Box 6.4] Uses Resources Use of Disposable Income B.6g GNDI FCE Adjustments for changes in pension entitlements Adjustments for changes in pension entitlements 1810 B.8g Gross savings

31 End of Lesson VI

32 Thanks

Distribution and Use of Income Accounts Main entries and Data Needs

An Introduction to System of National Accounts Integrated Transaction Accounts Lesson: VI Part I Distribution and Use of Income Accounts Main entries and Data Needs Third Intermediate-Level e-learning