The most recent European Statistics on Income and Living Conditions (EU-SILC) 2019 survey shows that 17.1% of the Maltese population, that is 82,758 persons, are living in household with a national equivalised income below the at-risk-of-poverty line. This translates into an at-risk-of-poverty (ARP) rate of 17.1 per cent, 0.3 percentage points higher than that recorded for the previous year.
This 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 2018, while non-income components (such as material deprivation) refer to 2019, which is the data collection year.
The survey is designed to collect detailed information on household characteristics, labour market, education, household income, material deprivation and social exclusion. The households’ wealth (assets) and gains/losses from capital transfers are not covered by this survey.
4,376 households were approached for the interview. Of these, 3,785 completed the survey, resulting in a household response rate of 86%. These households comprised 9,557 residents, of whom 8,351 were aged 16 and over.
The survey primarily shows that the average gross household income for 2018 as derived from EU-SILC 2019, is estimated at €34,627, while the average disposable household income (the amount of money available to households for spending purposes, after deducting taxes, social contributions and alimonies) is estimated at €28,505.
Furthermore, the at-risk-of-poverty threshold (ARPT) for 2019 is estimated at €9,212, 3.9% higher when compared to the previous year. The threshold is defined as 60% of the median National Equivalised Income (NEI).
The EU-SILC 2019 shows that the number of persons living in households with a national equivalised income (NEI) below the at-risk-of-poverty threshold was 82,758. The NEI is defined as the household’s total disposable income divided by the household’s consumption units.
This means that the Maltese islands have an at-risk-of-poverty (ARP) rate of 17.1%, 0.3 percentage points higher than that recorded for the previous year. The at-risk-of-poverty rate (ARP) among persons below 18 years of age was calculated at 20.6%, a decreasing by 0.8% decrease from the previous year. A decrease of 0.1% was observed for persons aged 18-64, where one finds that the ARP rate for this age cohort was of 13.2%. The rate for 65+ persons went up to 27.7% equivalent to an increase of 2.4% over the EU-SILC 2018.
The ARP rates for households with and without dependent children were calculated at 17.3% and 16.9% respectively. Members of single parent households were noted to be more susceptible to being at-risk-of-poverty, with 42.9% of such persons having an equivalised disposable income below the ARPT. Members of households with three or more dependent children are also more prone to be at-risk-of-poverty.
Notably, the EU-SILC study does not only take into consideration the monetary poverty of individuals but also the ability (or otherwise) of households to afford several items or material components.
The EU-SILC 2019 shows that, in 2019, the severe material deprivation rate (SMD) among persons living in households was 3.6%; an increase of 0.6% than the same rate estimated from EU-SILC 2018.
The two most influential variables contributing to this increase were: ability of households to spend one week’s annual holiday away from home; and ability of households to face unexpected financial expenses.
In fact, the NSO report on the survey explains that more respondents said that their household was able to afford unexpected financial expenses and to pay for one week’s annual holiday away from home, when compared to the previous year.
Another factor that is considered by the EU-SILC survey is the at-risk-of-poverty or social exclusion rate (AROPE). A person is considered to be at-risk-of-poverty or social exclusion (AROPE) if they reside in a household that falls under one of the following three conditions: at-risk-of-poverty (ARP); severely materially deprived (SMD); has low work intensity (LWI).
The EU-SILC 2019 reported an AROPE rate of 20.1%, an increase of 1.1% when compared to EU-SILC 2018.
The at-risk-of-poverty or social exclusion rates (AROPE) for households without dependent children and with dependent children were both calculated at 19.7% and 20.4%. When compared to EU-SILC 2018 the former registered an increase of 0.7% and the latter by 1.4%.
Government reaction
Reacting, the Social Solidarity Ministry said that, when comparing these figures to pre-2013, when the PN was in government, these results indicate how much social and economic policy employed in recent years has made a difference in the standard of living of Maltese and Gozitan families.
“Tens of thousands have been removed from a situation of material deprivation, while we gave dignity and opportunity to many families, especially those who could get out of work.”
Minister Michael Falzon also said that the country's economic success did not increase social inequality while increasing income in everyone's pockets. However, he said that more measures are needed in favour of those who do not work, not least pensioners. This will continue to be a priority of this administration.