Household Gross Disposable Income is the money available to satisfy people’s needs and wants (for Personal Consumption Expenditure), and to add to Household wealth (increasing Fixed Capital Assets or Financial Assets). It is therefore an important indicator of whether households are becoming better off or worse off.
Disposable income includes all income:
However, disposable income is after some payments have been deducted:
We talk about ‘Gross’ Disposable Income because this is before any depreciation or Consumption of Fixed Capital (CFC) has been deducted. Gross Disposable Income minus CFC is Net Disposable Income, but we usually talk about the 'Gross' rather than 'Net' Disposable Income in Ireland's National Accounts.
Household Disposable Income is an indicator of whether people have more money coming in each year, but if their expenses are also rising they are no wealthier at the end of it. For this reason, Household Saving is also an important indicator of economic wellbeing.