Organisation for Economic Co-operation and Development

This indicator measures the income of selected jobless families that claim Guaranteed Minimum Income (GMI) benefits. Values are expressed both in national currency and as a percentage of the median disposable income in the country. When the country's poverty line is defined as a fixed percentage of the median disposable income, the normalization of GMI amounts in terms of the median disposable income allows measuring the gap between benefit entitlements and the poverty line. For instance, if the poverty threshold is 50% of the median disposable income, a value of the indicator of 30% means that benefit entitlements are 20 percentage points below the poverty line.

The Gross Replacement Rate (GRR) of unemployment benefits measure the amount of unemployment benefit received after 1, 2, …, T months of unemployment in proportion to the employment income earned before losing the job. All values are calculated before taxes and social security contribution payments. Calculations exclude family benefits, social assitance, housing benefits as well as in-work benefits. Because of these exclusions, the Net Replacement Rates in unemployment may provide a more complete measure of income maintenance than the GRR, especially when considering longer periods of unemployment and/or families with children.