Malta’s at-risk-of-poverty or social exclusion rate rises to 20% – NSO

Last Updated on Wednesday, 14 September, 2022 at 11:38 am by Andre Camilleri

At 20.3%, the at-risk-of-poverty or social exclusion rate (AROPE) in Malta increased by 0.4 percentage points in 2021, when compared to 2020, the European Statistics on Income and Living Conditions survey showed.

The AROPE reveals the share of persons who are either at-risk-of-poverty, severely materially deprived, or residing in a household with low work intensity.

The European Statistics on Income and Living Conditions survey is an annual enquiry conducted by the National Statistics Office (NSO) among persons residing in private households in Malta and Gozo.

Income statistics refer to calendar year 2020, while non-income components (such as material deprivation) refer to 2021, which is the data collection year.

For the reference year 2020, the average gross household income was estimated at €40,263. On the other hand, the estimate for the average disposable household income was €32,590. Disposable income is defined as the amount of money available to households for spending purposes, after deducting taxes, social contributions and alimonies. The NSO said that almost 80% of the total gross household income for 2020 was attributed to employment income. The share of social benefits (including old-age benefits) for 2020 stood at 16.6%.

The survey shows that the number of persons living in households with a National Equivalised Income (NEI) below the at-risk-of-poverty line (€10,222) was 85,754. This translates into an at-risk-of-poverty (ARP) rate of 16.9%, the same share that was recorded for the previous year.

The NEI of a household is defined as the household’s total disposable income divided by its ‘equivalent size’. The NEI takes into account the size and age distribution of household members.

If one excludes all social transfers including pensions, the at-risk-of-poverty rate in 2021, would increase by 19.3 percentage points, or 98,059 person, the NSO said. “These results show the importance of social welfare in assisting the most vulnerable persons in society.”

The NSO also said that the at-risk-of-poverty rate among persons below 18 years of age was calculated at 19.6%, down by 0.8 percentage points from the previous year. A decrease of 0.4 percentage points was observed for persons aged 18-64, where one finds that the ARP rate for this age cohort was of 13.1% in 2021. The rate for those aged 65 and more went up to 28.1%, equivalent to an increase of 1.8 percentage points over 2020.

The at-risk-of-poverty rates  for households with and without dependent children were calculated at 16.6% and 17.1% respectively. The NSO said that members of single parent households were noted to be more susceptible to being at-risk-of-poverty, with 44.8% of such individual persons having an equivalised disposable income below the at-risk-of-poverty threshold. Members of households with two adults, and three or more dependent children were also more prone to be at-risk-of-poverty

The survey also found that an increase was recorded in the at-risk-of-poverty rates for the retired and other inactive persons for 2021 when compared to the previous year. On the other hand, there was a decrease in the at-risk-of poverty rate for those unemployed, while the rate for those employed remained stable when compared with the previous year.

In 2021, the severe material and social deprivation rate among persons living in households was 5.4%. This figure is 0.3 percentage points higher than that estimated by survey in 2020.

The Material and Social Deprivation indicators are based on 13 items, of which seven deprivation items relate to the person’s household and six deprivation items relate to the persons themselves.

The two most influential variables were: inability of households to pay one week’s annual holiday away from home (33.1%); and household not able to replace worn-out furniture (15.9%).

In a statement, the ​​​​​​​​​​​​​​​​​​​​​​​​​​Ministry for Social Policy and Children’s Rights said that the statistics indicate that while in 2020 the world economies were suffering due to the pandemic, in Malta the average gross income of families rose by 5.4% to €40,263, while the rate of people at risk of poverty when compared to the previous year remained stable at 16.9%.

“This is a notable achievement when you consider that in a pandemic year, the 60% line on which the number of people at risk of poverty is calculated rose by nearly €500, thanks to the increase in income of Maltese families who found great support from the government.”

The ministry said that the at risk of poverty rate for women dropped by 0.3%, and that the at risk of poverty rate for children dropped by 0.8%.

The ministry said that the At Risk of Poverty or Social Exclusion Rate, while increasing by 0.4 percentage points, is nearly 4.5% less than what was registered in 2013.

The ministry made more comparisons to 2013, noting a decrease in the Severe Material and Social Deprivation rate of 13.8% since then.

Minister Michael Falzon said that the government will continue to recognise the challenges and realities of families, and reaffirmed his committment to working in favour of economic sustainability through which support to families can continue to be given for people tha have a better quality of life.

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