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How does the government measure income distribution?

The government divides all income earning families into five equal groups (quintiles) from poorest to richest.
Each group represents 20% of the population.
If there was perfect equality then 20% of the families should earn 20% of the income, 40% should earn 40%, etc.
The government compares how far the actual distribution is from perfect distribution then attempts to redistribute money fairly.

The Lorenz Curve is used to show Income Inequality.

Gini Coefficient

Statistical measurement of income distribution. Area A divided by the sum of areas A and B.

A higher number means more income inequality.
A low number means less income inequality.

Government transfer payments shift the Lorenz Curve toward more equality.