Poverty continues to rise in 2005, and falls subsequently

16/11/2006 09:30

In 2004, 10.3 percent of Dutch households had to get by on a low income. This means that poverty increased further in 2004, just as in 2003. Estimates indicate a further rise for 2005, but a turning point in 2006.
These are just some of the conclusions of the Poverty Report published jointly by Statistics Netherlands and the Social and Cultural Planning Office.

Fall in poverty from 2006

In 2002, 596 households had an income below the low-income threshold. This was the lowest number since 1990. It was the equivalent of 9.1percent of all households. This percentage rose to 10.3 in 2004, when 674 thousand households had a low income.
Estimates – based partly on figures from the Social and Cultural Planning Office – show that the percentage of households with a low income rose to 11.1 in 2005. A turning point is expected in 2006, when the share of low-income households is expected to fall to 9.7 percent. In 2007 it will probably fall further to 8.8 percent. This decrease in poverty is mainly caused by an improvement in the purchasing power of the over-65s.

Favourable developments for over-65s

The income position of pensioners has improved since 2000. The share of over-65s with a low income fell from 12 percent to 7 percent between 2000 and 2004. This is expected to fall further in 2007 to just over 3 percent.

Highest risk for one-parent families and foreigners

One-parent families with under-aged children are most likely to fall in the poverty category. In 2004, for example, four out of ten one-parent families with under-aged children had an income below the low-income threshold. Single people younger than 65 years also had a higher risk than average. In 2004, two out of ten of these singles had a low income.
Households with a non-western foreigner as main earner also had a higher risk. Thirty percent of these households had a low income, compared with 8 percent of native Dutch households.

More financial problems for low incomes

Other relevant indicators also show an increase in poverty in the period 2002-2005. The wealth of households with a low income deteriorated between 2002 and 2004. More than half of these households had outstanding debts on non-mortgage loans in 2004. In 2002 this was the case for only one in three households. In 2005 nearly twice as many low-income households were in arrears with payments as in 2002.
In addition the proportion of people with a low income who themselves report that they have difficulty making ends meet rose from 27 to 44 percent between 2001 and 2005. Lastly, more and more households report that because of their financial situation they are getting into debt. However, this number did not rise further in the first half of 2006.

New SCP poverty threshold: less poverty, same trend

The Social and Cultural Planning Office set a new poverty threshold earlier this year on the basis of the minimum necessary amount needed for food, clothes, housing, transport, health care and personal hygiene. In 2004, 650 thousand people had an income below the low variant of the poverty threshold, (4.3 percent) and 1 million below the high variant (6.7 percent). The poverty rate is thus lower than according to the low-income threshold (1.4 million people; 9.4 percent), although the trend also showed an increase up to and including 2004.  However, according to this criterion the increase started in 2000.