Living Expenses and the LIXI Standards
This proposal has been superceded
This page describes the proposed changes as of 21st July 2019.
A further round of consultation has taken place and an updated proposal published here.
The categories used to describe a customer's living expenses for a credit application were last updated in the LIXI data standards in 2016 through an industry consultation process. To support the evolving requirements of the industry, LIXI published a paper (available for download here) on the 12th November 2018 that described the rationale for change, the high-level changes required, along with details of how to get involved.
The community of LIXI members has collaborated and collectively clarified the industry's requirements, and proposed changes to the LIXI Data Standards. The change requests are available in LIXILab for members to contribute any further discussion (available here for those with access to LIXILab). Employees of member organisations can access LIXILab by contacting LIXILab@lixi.org.au.
This page contains a number of sections.
- Key Proposed Changes: An overview of the key proposed changes
- Proposed Categories: The details of the proposed categories
- Differences from the proposal as at 20th February 2019: Highlights how the proposed categories have changed since the list was last updated in February 2019
- FAQs: Frequently Asked Questions about the latest version of the proposal.
Key Proposed Changes
The proposed changes as at 21st July 2019 are described here, in which feedback from LIXI Contributors has been considered. This page will continue to be updated with any further changes necessitated by discussion on the LIXILab tickets.
|Expense Category||Detailed Description||Ticket||HEM Treatment**|
|Childcare||Childcare including nannies and non-compulsory pre-school.||#890||Included in HEM|
|Clothing and personal care||Clothing, footwear, personal care products, cosmetics, hair services and accessories (including travel goods, handbags, umbrellas, wallets, baby-goods) for men, women, children and infants, including purchases, repairs and alterations.||#891||Included in HEM|
|Groceries||Groceries (food and non-alcoholic beverages), toiletries and cleaning products.||#892||Included in HEM|
|Medical and health||Medical and health care services including GPs, specialists, physiotherapists, chiropractic, and opticians. Medicines, pharmaceuticals, prescriptions, glasses, purchase or hire of therapeutic appliances and equipment, hospital charges, nursing home charges. Ambulance Insurance. Excludes health insurance which is categorised elsewhere.||#893||Included in HEM|
|Health Insurance||Health insurance including hospital, medical and dental insurance.||#1054||HEM Non-Basic|
|Recreation and entertainment||Meals in restaurants, hotels and clubs, fast food and takeaway including coffee. Alcoholic beverages and tobacco products. Purchase, hire, repair of recreational personal belongings including electronics, computers, games consoles, AV equipment, cameras. Toys, hobbies, stationery, arts, crafts, sports, camping, fishing and recreation equipment including musical instruments and accessories. Non-subscription TV, video, games, and audio content, books, newspapers, magazines (including physical material and digital content). Recreation, gym, and health and fitness studios fees, court hire, sports lessons, admission fees and tickets (sports, theatre, gallery, museum, music events). Domestic holidays (fares, travel insurance, fuel, accommodation, theme parks, zoos tours). Recreational gambling, including lottery-type games, scratch cards, poker machines, club and casino gaming, and sports betting.||#894||Included in HEM|
|Telephone, internet, pay TV and media streaming subscriptions||Telephone accounts (home and mobile), internet, pay TV and media streaming subscriptions (such as Netflix and Spotify).||No change||Included in HEM|
|Transport||Public transport, taxis, ride-sharing and non-holiday domestic airfares (excludes overseas airfares). Running costs for essential vehicles including insurance, fuel, servicing, repairs, parking, tolls and registration of motor vehicles (excludes recreational vehicles).||#808||Included in HEM|
|Public or government primary and secondary education||Public or government, primary and secondary school tuition, school and sports fees including compulsory kindergarten/reception/pre-primary/prep.||#796||Included in HEM|
|Higher education and vocational training||Higher education and vocational training fees (including TAFE, business college, drama, music, dance) excluding HECS.||#796||Included in HEM|
|Primary residence||Costs associated with the primary residence, either owned or rented. Includes rates, water, sewage, repairs and maintenance, electricity, gas, heating oil and wood for fuel, cooking stoves, ovens, microwaves, hot plates, ranges, refrigerators, freezers, washing machines, purchase, hire and repair of household and outdoor furnishings and equipment, furnishings, floor coverings, linen, tableware, gardening tools, power tools, electrical, lights, air-conditioners, dishwashers, clothes dryers, appliances, trees, shrubs, plants, pool chemicals, home insurance, contents insurance, personal belongings insurance and appliance insurance. Excludes land tax and body corporate fees.||#798||Included in HEM|
|Investment Property||Costs associated with any property owned for investment purposes. Includes land tax, body corporate fees, property management fees, rates, water, sewage, repairs and maintenance, electricity, gas, heating oil and wood for fuel, cooking stoves, ovens, microwaves, hot plates, ranges, refrigerators, freezers, washing machines, purchase, hire and repair of household and outdoor furnishings and equipment, furnishings, floor coverings, linen, tableware, gardening tools, power tools, electrical, lights, air-conditioners, dishwashers, clothes dryers, appliances, trees, shrubs, plants, pool chemicals, landlords insurance, home insurance, contents insurance, personal belongings insurance and appliance insurance.||#798||HEM Non-Basic|
|Secondary residence||Costs associated with any secondary residence, either rented or owned for non-investment purposes, such as a holiday property that is not rented to generate income, or a property that family members (parents or children) are allowed to live in rent-free. Includes land tax, body corporate fees, property management fees, rates, water, sewage, repairs and maintenance, electricity, gas, heating oil and wood for fuel, cooking stoves, ovens, microwaves, hot plates, ranges, refrigerators, freezers, washing machines, purchase, hire and repair of household and outdoor furnishings and equipment, furnishings, floor coverings, linen, tableware, gardening tools, power tools, electrical, lights, air-conditioners, dishwashers, clothes dryers, appliances, trees, shrubs, plants, pool chemicals, landlords insurance, home insurance, contents insurance, personal belongings insurance and appliance insurance.||#798||HEM Non-Basic|
|Pet Care||Pet food, grooming, minding services, care products, health products, veterinarian fees.||#1055||Included in HEM|
|Sickness and personal accident insurance, life insurance||Sickness and personal accident insurance, life insurance.||#797||Excluded from HEM|
|Other insurance||Insurance of recreational vehicles such as motor cycle, caravan, trailer, boat and aircraft including combined insurance and registration. Pet Insurance. Insurance not elsewhere classified.||#797||HEM Non-Basic||Other||Unique items not covered in above categories (must be explained further).||No change||n/a|
|Private schooling and tuition||Tuition fees, school fees and sports fees for private schooling, including independent schools (Catholic or non-Catholic) and private tuition (such as Kumon and Kip McGrath) including compulsory age kindergarten/reception/pre-primary/prep.||#796||Excluded Expenditure|
|Land tax and body corporate fees on owner occupied principal place of residence||Land tax and body corporate fees on owner-occupied principal place of residence. Excludes investment properties, secondary residences, and properties maintained for other purposes such as holiday properties or residences maintained for parents or children.||#795 & #798||Excluded Expenditure|
|Board*||Board paid.||#815||Excluded Expenditure*|
|Child Maintenance*||Maintenance expenses for nondependent children.||#815||Excluded Expenditure*|
|Rent*||Rent on primary residence.||#815||Excluded Expenditure*|
|* Note that this change is technical and these items should continue to be treated as Other Commitments, similar to the treatment of “Land tax and body corporate fees on owner occupied principal place of residence” and “Private schooling and tuition”.
** The HEM treatment is LIXI's best estimate of how this category aligns to the various HEM categories for comparison purposes. Note that the HEM categories of Absolute Basic and Discretionary Basic are not distinguishable in the LIXI categories (nor do they need to be) since a single aggregate number is used when comparing to HEM.
Differences from the proposal as at 20th February 2019
This section is to assist those contributors that evaluated their requirements against the proposal that was published in February 2019 and only want to evaluate the changes that have been made since then.
|Expense Category||Change from Proposal at 20th Feb 2019|
|Medical and health||Note the inclusion of ambulance insurance|
|Recreation and entertainment||Note the inclusion of travel insurance and removal of pet expenses|
|Transport||Note the inclusion of vehicle insurance and more explicity limited to essential vehicles|
|Primary residence||Note the inclusion of home insurance, contents insurance, personal belongings insurance and appliance insurance that relate to the primary residence|
|General insurance||Category removed as insurance is now allocated across multiple categories. Home insurance, contents insurance, personal belongings insurance and appliance insurance that relate to the primary residence is categorised with the Primary Residence category. Travel insurance is categorised with Recreation and entertainment. Ambulance insurance is categorised with Medical and Health. Insurance of motor vehicles other than recreation vehicles is categorised with Other Insurance.|
|Investment Property||Note the addition of property management fees & property insurance, landlords insurance, contents insurance, personal belongings insurance and appliance insurance that relate to the investment property.|
|Secondary residence||Note the addition of property management fees, property insurance, landlords insurance, contents insurance, personal belongings insurance and appliance insurance that relate to the secondary residence.|
|Other insurance||Explicitly include the insurance of recreational vehicles such as motor cycle, caravan, trailer, boat and aircraft including combined insurance and registration. Explicitly include Pet Insurance.|
|Personal insurance||Category removed, with hospital, medical and dental insurance within a new specific category. Sickness and personal accident insurance as well as life insurance also collected as a specific category.|
|Pet Care||New Category|
|Sickness and personal accident insurance, life insurance.||New Category|
|Sickness and personal accident insurance, life insurance.||New Category|
|Health Insurance||New category for health insurance including hospital, medical and dental insurance.|
|Clothing and personal care||No change|
|Telephone, internet, pay TV and media streaming subscriptions||No change|
|Public or government primary and secondary education||No change|
|Higher education and vocational training||No change|
|Private schooling and tuition||No change|
|Land tax and body corporate fees on owner occupied principal place of residence.||No change|
|Child Maintenance*||No change|
This section addresses some of the common questions asked during the contribution process.
- Q: There are 22 categories (19 Living Expenses + 3 Other Commitments) proposed which seems a large increase over the 12 previously used. Why not combine more of the categories?
A: There were previously 15 categories because three (Rent, Board and Maintenance) were collected as part of Other Commitments. There is still a net increase of 7, but these are largely because of changes to HEM that require some items separated, for example Private School expenses. Of course we could aggregate more, all the excluded items for example (private schooling, land tax, life insurance etc) but they are quite unrelated and do not make a logical category.
- Q: Why is pet insurance not included within pet care?
A: Pet care is within HEM, whilst pet insurance is not, therefore pet insurance should not be aggregated with other Pet Care expenses for comparison with HEM.
In fact, pet insurance is not even listed in the Australian Bureau of Statistics Household Expenditure Classification Coding List that forms the basis for the Household Expenditure Survey. The full list is available on the ABS Website here, in the Appendix 7 - HEC Coding List 2015-16.xls file. Therefore the appropriate category for Pet Insurance is 'Insurance nec' (not elsewhere classified), which is regarded as HEM Non-Basic and should not be included in a comparison against HEM.
- Q: Why is health insurance not included within medical and health whilst ambulance insurance is included?
A: Ambulance insurance is within HEM, but health insurance including hospital, medical and dental insurance is not, therefore health insurance should not be aggregated with other medical and health expenses for comparison with HEM.
- Q: Why are land tax and body corporate fees on owner-occupied primary residence collected separately whilst they are included within investment property and secondary residence categories?
A: Land tax and body corporate fees on an owner-occupied principal place of residence are considered excluded expenditure for HEM purposes. It is expected to be collected separately and not included within the comparison against HEM. The same is not the case for other properties, and therefore collecting within the other property expenses is reasonable.
- Q: Why are insurances collected across multiple categories?
A: Insurances are now across multiple HEM classifications: 'Absolute Basic', 'Discretionary Basic', 'Non-Basic' and 'Excluded'. In addition, HEM guidelines issued in September 2018 direct that all investment property-related costs should now be deducted from corresponding revenues. As a result, collecting all insurances in a single category is not appropriate.
- Q: Why are property expenses split between primary, secondary and investment?
A: HEM guidelines issued in September 2018 direct that all investment property-related costs should now be deducted from corresponding revenues. Additionally, the definition of 'Owner-occupied (housing loan)' in the ABS/RBA definitions for the EFS collection requires that the loan is for the principal place of residence. Many lenders treat a secondary residence differently to an Investment Property for serviceability calculations, therefore the three categories are required.
- Q: Where should school uniforms, books, pencils, pens etc be captured
A: The three categories of education expenses are for fee & tuition related costs only - uniforms would be considered as 'Clothing and personal care' with books, pencils and pens considered as stationery in 'Recreation and entertainment'. LIXI is considering updating the descriptions to make these clearer.
- Q: Child maintenance can be paid for both dependant and non-dependant children. For example, custody may be shared evenly (so the child is considered a dependent) but the applicant may still pay child maintenance. Therefore should 'Child maintenance' cover both dependant and non-dependant children?
A: Possibly. Feedback is being sought from the community as to whether the description should be broadened to include maintenance on dependent children.
- Q: Where should spousal support and de-facto support be captured?
A: Feedback is being sought from the community.
- Q: Where should registration on recreational vehicles (including caravan, boats etc) be captured, particularly if the loan is also being used to purchase the vehicle?
A: From a HEM perspective it non-basic, so should not be included in a HEM comparison, Feedback is being sought on whether the 'Other insurance' category should be expanded to 'Other Insurance and registrations'.
Last Updated: 8th August 2019