Over 68,000 Maltese live in households whose incomes put them on poverty line

Malta’s monetary “at-risk-of-poverty” rate has increased over 2014, with 16.3% of households falling into this category according to the latest data from the National Statistics Office for 2015.

The more serious “at-risk-of-poverty or social exclusion indicator” has seen 5,000 persons exit from poverty, and now stands at 22.4% in 2015, down from 23.8% in 2014: these are people whose income is below the poverty line, but are also severely materially deprived, and who lived in low work intensity households.

The monetary poverty line refers to people who live in private households where the median income is of 60% of the national median.

In 2014, when median income was €12,787, there were 65,987 persons in households whose total income, spread individually among members of a household, would amount to some €7,600 individually; in 2015, national median income increased to €13,493 with 68,658 falling on the poverty line, where household incomes would be just over the 60% threshold of €8,096.

At-risk-of-poverty rate: share of persons with 60% of national equivalised income

At-risk-of-poverty or social exclusion rate: persons below poverty line who are severely materially deprived and live in households with low work intensity

The median earnings of a household depend on the size of the household, and according to how many members are in gainful employment.

Malta’s average household disposable income also increased from €24,730 in 2014 to €25,960 in 2015.

The data is part of the Statistics on Income and Living Conditions (SILC) survey, which is conducted amongst the same sample of 4,300 persons over four years.

The at-risk-of-poverty threshold corresponds to 60% of the median national equivalised income. This rose by 5.5% when compared to the previous year, mainly driven by an increase in employment income, reaching €8,096. This is the level of the persons’ equivalised income of a household, below which the persons in that household are considered at-risk-of-poverty.

The survey showed that 68,658 persons living in private households, or 16.3%, had an equivalised income below this threshold.

The at-risk-of-poverty rate among persons aged below 18 years of age stood at 23.4%. This rate stood at 21% for persons aged 65 years and over.

Single-parent households were found to be more susceptible to being on the poverty line: 45.3% of these persons had incomes below the poverty line median.

On its part, the government said that 5,000 persons had exited from being at risk of poverty. “The previous administration saw 18,000 at risk of poverty, rising from 20% to 24%... this confirms an improvement for those who are the most vulnerable in our society. Budget 2017 is committed to improve economic activity and give more opportunities to help low-income earners,” finance minister Edward Scicluna said.

The at-risk-of-poverty rate was found to decrease with increasing household work intensity: that is, when more members of the same household are engaged in gainful employment. Indeed, 69.1% of those living in households with very low work intensity were at-risk-of-poverty compared with only 1.9% for those living in households with very high work intensity.

The severe material deprivation rate – people who cannot afford four from a list that includes unexpected financial expenses, a week’s holiday, mortgage arrears, eat meat every second day, warm a house, or own a washing machine, colour TV, mobile phone or car – stood at 8.1%.

More than 40.0% were living in households which claimed that not all the household members could afford to pay for a one-week annual holiday away from home.

In addition, 21.1% said that they could not afford to face unexpected financial expenses, while 13.9% said that they could not afford to keep their home adequately warm in winter.

PN criticism

The Nationalist Party was critical of the data released, saying that the people on the poverty line had increased to 94,250 – well above the 88,000 figure when Labour took office in 2013.

The number refers to the “at-risk-of-poverty or social exclusion” rate, which improved with a decrease of some 5,000 emerging from the poverty line while also being severely materially deprived.

But the PN said this was still some 6,000 more than when Labour took office.

“In his first year of office, Joseph Muscat presided over an explosion in this number to 100,000,” the PN said. “Families know they are not making ends meet, that food prices have increased, as was confirmed in a Caritas study that shows low-income earners facing an €800 increase in annual costs.”

The PN accused the Prime Minister of having no interest in addressing the challenge of poverty, “because he is only interests in his friends and their secret Panama companies”.

The PN said Simon Busuttil has pledged a larger subsidy for families renting from the private sector, and to reduce the rent for those living in government housing.