Press Release by the Ministry for Social Justice and Solidarity, the Family and Children’s Rights: Poverty and social exclusion continues to decline in 2020

Reference Number: PR211787

Poverty and social exclusion continue to decline in the year 2020 – two out of every three persons are no longer in a situation of severe material deprivation, while three out of every five persons are also free from their former situation of material deprivation 

According to the official measurements of the European Union, as reflected in the latest released statistics issued by NSO, the rate of persons at risk of poverty or social exclusion decreased to 19.9% in the year 2020, from 20.8% in the year before. This reflects a decline in the percentage of families with a low participation inside the labour market, and those in a state of material and social deprivation, as well as a decrease in the rate of those individuals who earn an income less than 60% of the national median income. 

The greatest improvements were observed amongst those individuals older than 65 years of age, where the rate decreased by 2.2% when compared with that for the year 2019. Additionally, there was also a significant decline in the risk of poverty or social exclusion amongst children, with a rate that decreased by 13% in the year 2020. All of this serves to show that the government’s policy, of supporting pensioners and families with children, is leaving an altogether positive impact overall. 

It should be noted, that these improvements took place in spite of the fact that this year the measurement parameters employed by the European Union, and thus subsequently also adopted by the NSO, were widened so as to be able to incorporate social elements which had never been considered before. As a matter of fact, if one were to observe the measurements that were utilised a year ago, the reduction in the rate of those individuals at risk of poverty or social exclusion, would be from 20.1% for the year 2019 to 19.0% for the year 2020. 

In the year 2013, the rate of those individuals at risk of poverty or social exclusion was that of 24.6%, which means that in seven years’ time, this very same rate decreased by nearly a quarter of its’ previously established value before the change in government. In contrast to this, during the seven years’ time period before the year 2013, there was an increase from 19.5% to 24.6%, whereby in other words this had increased by more than a quarter of it’s previously established value under the previous government. As according to the original measurements, the rate registered in the year 2020 is the lowest rate ever registered, since these statistics started being collected in our country. 

RATE OF RISK OF POVERTY OR SOCIAL EXCLUSION *

* As according to the Original Measurements – Source : NSO 

Another source of good news is that even the rate of risk of poverty, in other words that same rate solely based upon household income, decreased from 17.1% to 16.9%. It is worth mentioning that these figures, being in turn related to household income, are based upon the overall income for the year 2019. This means that for the very first time after many years, the amount of income received by those individuals situated below the line of 60% of the national median income, has grown more than the amount of income received by those above it, thanks to, amongst others, the social measures introduced by the government. 

These improvements in the rate of risk of poverty took place in a specific context, where the disposable earnings of households continued to rise in a strong manner. In fact, the average disposable income of households grew from €28,505 to €31,266, or by almost €2,800. This results in an increase of 10% over the previous year.  This is evident of the extent to which the government’s political economy has led to improvements across the labour market, as well as in relation to household incomes, for our country. 

RATE OF RISK OF POVERTY, DISPOSABLE INCOME, AS WELL AS MATERIAL DEPRIVATION AND SOCIAL EXCLUSION 

* Based upon the Previous Year’s Revenue – Source : NSO 

The rate of those individuals in a state of material deprivation and social exclusion, which is a relatively new method of measurement that has started being used as of now, has decreased from 9.9% in the year 2019 to 9.4% in the year 2020. This was reflective of improvements in the overall proportion of those individuals who feel that they can afford to participate in a recreational activity on a regular basis, those individuals who do not find any difficulty in changing old furniture in their home, those individuals who can afford to keep their home warm during winter, and together with an overall reduction in the proportion of those individuals who owe payment in arrears of bills, rent and monetary debt. 

It is worth mentioning that according to the original measurements, the rate of material deprivation decreased from 19.9% in the year 2014 to 8.7% in the year 2020, with a reduction of 40,143 persons. The rate of those individuals in a state of severe material deprivation and social exclusion, has remained practically stable at a level of 5.1%. 

This is also another relatively new method of measurement, which has replaced the former method of measurement, used in turn for measuring severe material deprivation, where as according to the original measurements, the rate for the year 2020 went down to 3.3% as from 3.6% of the previous year and from 10.3% in the year 2014, with a reduction of 26,542 persons. 

RATE OF MATERIAL DEPRIVATION AND SEVERE MATERIAL DEPRIVATION *

* As according to the Original Measurements – Source : NSO 

Compared to the year 2014, nowadays two out of every three persons are no longer in a situation of severe material deprivation, whereas three out of every five persons are altogether free from their former situation of material deprivation. In a comment issued-out by the Minister for Social Justice and Solidarity, the Family and Children’s Rights, Michael Falzon, said that every reduction in poverty is important, since this indicates in a clear manner that the government’s social policy is working as intended. 

He claimed that these figures confirm the importance of the government’s intervention through the social security system. Minister Falzon reiterated that if there had not been such strong improvements within the pensions and social benefits sectors, which in turn led to a record investment of more than €1 billion across these very same sectors, the total amount of those individuals at risk of poverty would have been double the amount that it is in reality. 

Minister Michael Falzon concluded by saying that during the budget that was going to be announced on the 11th of October, the government will continue to support pensioners and the elderly, families with children, workers, persons with disabilities and vulnerable persons, with greater improvements within the social services sector, as well as via measures to raise their overall income. In this manner, our country will be able to continue it’s constant struggle to increasingly lower the risk of poverty and social exclusion among us, in the very same manner as carried-out from the year 2013 onwards.