Living Expenses and the LIXI Standards
The lending industry is faced with unprecedented focus from regulators and the community in general. 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 has pitched in, and with collaborative input from our members, we've clarified 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.
Key Proposed Changes
The proposed changes as at 20th February 2019 are described here, in which the final report of the Hayne Royal Commission and the publication of the ASIC consultation paper (CP 309) have already been considered. The first section on this pages summarises the proposed changes, and the lower section describes the complete proposed set of categories with detailed definitions. This page will 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. Excludes health insurance which is categorised under Personal Insurance.||#893||Included in HEM|
|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, fuel, accommodation, theme parks, zoos tours). Pet food, grooming, minding services, care products, health products and veterinarian fees. 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 including fuel, servicing, repairs, parking, tolls and registration of motor vehicles (excluding motor vehicle insurance and costs associated with recreational vehicles such as motorcycles, caravans, trailers, boats and aircraft etc).||#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 and ranges, refrigerators and freezers, washing machines; purchase, hire and repair of household and outdoor or garden furnishing and equipment; furnishings, floor coverings, linen, tableware, gardening and power tools, electrical and lights, air-conditioners, dishwashers, clothes dryers and appliances, trees, shrubs and plants, pool chemicals. Excludes land tax and body corporate fees.||#798||Included in HEM|
|General insurance||House and contents insurance on the applicant's primary residence maintained (either owned or rented) by the borrower. Personal belongings insurance including household appliance or AV equipment or PC repairs insurance. Travel Insurance. Ambulance insurance. Any compulsory insurance of motor vehicles other than recreation vehicles (motor cycle, caravan, trailer, boats & aircraft) including combined insurance and registration.||#797||Included in HEM|
|Investment Property||Costs associated with any property owned for investment purposes. Includes: land tax and body corporate fees, insurance, rates, water, sewage; repairs and maintenance; electricity, gas, heating oil and wood for fuel; cooking stoves, ovens, microwaves, hot plates and ranges, refrigerators and freezers, washing machines; purchase, hire and repair of household and outdoor or garden furnishing and equipment; furnishings, floor coverings, linen, tableware, gardening and power tools, electrical and lights, air-conditioners, dishwashers, clothes dryers and appliances, trees, shrubs and plants, pool chemicals.||#798||HEM Non-Basic|
|Secondary residence||Costs associated with any secondary residences, 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 and body corporate fees, insurance, rates, water, sewage; repairs and maintenance; electricity, gas, heating oil and wood for fuel; cooking stoves, ovens, microwaves, hot plates and ranges, refrigerators and freezers, washing machines; purchase, hire and repair of household and outdoor or garden furnishing and equipment; furnishings, floor coverings, linen, tableware, gardening and power tools, electrical and lights, air-conditioners, dishwashers, clothes dryers and appliances, trees, shrubs and plants, pool chemicals.||#798||HEM Non-Basic|
|Other insurance||Insurance of recreational vehicles such as motor cycle, caravan, trailer, boat and aircraft including combined insurance and registration. Insurance not elsewhere classified.||#797||HEM Non-Basic|
|Personal insurance||Hospital, medical and dental insurance, sickness and personal accident insurance, life insurance||#797||Excluded Expenditure (except hospital, medical and dental insurance which is 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.
Last Updated: 20th February 2019