ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Discretionary income is the money you have left over after paying taxes and necessary cost-of-living expenses-like your rent or mortgage, utilities and groceries. It’s called “discretionary income” because it can be used for discretionary expenses-nice-to-haves but not necessities.

Detailed explanation-2: -Pertaining to the Income-Contingent Repayment Plan, discretionary income is the difference between your annual income and 100 percent of the poverty guideline for your family size and state of residence. The poverty guidelines are maintained by the U.S. Department of Health and Human Services.

Detailed explanation-3: -The term “disposable income” is used to describe the amount of money left over after taxes have been taken out of a person’s or family’s earnings. Discretionary income, on the other hand, is what’s left after a person pays their taxes and their fixed costs like housing, food, and clothing.

Detailed explanation-4: -For instance, your disposable income is the amount of money you have left over after you’ve paid all of your federal, state and local taxes. On the other hand, your discretionary income is the money you have left over after you’ve paid your taxes plus all of your necessary living expenses.

Detailed explanation-5: -Expenses are divided into several categories, namely non-discretionary and discretionary. While non-discretionary expenses are considered mandatory-housing, taxes, debt, and groceries-discretionary expenses are any costs incurred above and beyond what is deemed necessary.