Sharp rise in poverty in 2011

• Poverty in the Netherlands rose sharply in 2011. Estimates point to a further increase in 2012.
• Long-term poverty rose in 2011 for the first time in years.
• Poverty rose sharply in absolute terms in 2011 among the unemployed, social assistance benefit recipients and the self-employed.
• The risk of poverty is highest for single-parent families, single persons aged up to 65, non-Western households and those on social assistance benefit. The poverty rate in all these groups increased in 2011.
• Poverty is low among pensioners and the over-50s; it is high among children. In the past, 30-45 year-olds were not at increased risk of poverty, but this has changed in recent years.

These are among the conclusions in the Poverty Survey 2012 (Armoedesignalement 2012) which is published today. In the report, researchers from the Netherlands Institute for Social Research/SCP and Statistics Netherlands (CBS) present the most up-to-date possible picture of the extent, development and consequences of poverty in the Netherlands. The Poverty Survey 2012 is the third in a series of joint publications by SCP and CBS providing information on poverty in the Netherlands.

Poverty thresholds

The report uses two principal criteria to measure poverty.
SCP describes poverty on the basis of the modest but adequate criterion. This is a norm amount based on the minimum expenditure needed for food, clothing, housing and social participation. SCP looks mainly at poverty at individual level.
CBS discusses the risk of poverty on the basis of the low-income threshold. This represents a fixed purchasing power amount and is adjusted annually only for inflation. CBS mainly describes the risk of poverty for households.
Annex A to this press release gives further information on these poverty thresholds.

Data

The data used to calculate the extent of poverty were drawn mainly from the CBS Income Panel Survey. The most recent data from this Survey cover the period up to and including 2011. SCP also estimated the extent of poverty in 2012 and 2013 using a microsimulation model. Annexes B and C give a detailed summary of the trend in poverty over time.

Sharp rise in poverty in 2011

The recession in 2009 and the subsequent slight recovery of the economy in 2010 initially had a modest impact on the poverty figures. In the second half of 2011, however, the Dutch economy shrank again, and in that year poverty rose sharply according to both thresholds. In 2010, 945,000 people in the Netherlands had an income below the modest but adequate criterion (6.0% of the population). In 2011 this had risen to 1,126,000 people (7.1%), in 521,000 households (7.5% of all Dutch households). Measured according to the low-income threshold, 514,000 households were at risk of poverty in 2010 (7.4% of all households). In 2011, the figure was 604,000 households (8.7%). In total, 1,232,000 people were on a low income in 2011 according to this measure.

Further increase projected in 2012

Estimates for 2012 point to a further increase in poverty. According to the modest but adequate criterion, the number of people in poverty is likely to rise by almost 60,000 to 1,184,000 (7.5%).
Based on the low-income threshold, almost 40,000 households will be added to those at risk of poverty, taking the total in 2012 to 642,000  9.2%).

The projection for 2013 is somewhat uncertain, because actual inflation and unemployment rates could differ from what is currently being assumed. The estimated poverty increase in 2013 is not due to measures announced in the recent Coalition Agreement, many of which will only be introduced from 2014 onwards.
The current expectation is that the number of households below the low-income threshold will be 14,000 higher in 2013, taking the total to 656,000 (9.4%). The number of persons below the modest but adequate criterion is projected to rise to 1,185,000  (7.6%); that is the highest level this century, but still lower than in 1994.

Risk of long-term poverty also up for the first time in years

Almost 160,000 Dutch households had spent at least four consecutive years on a low income in 2011, 10,000 more than in the previous year. The share of households with a long-term income below the low-income threshold rose slightly, from 2.4% to 2.5%. This brought to an end the downward trend in long-term poverty, which had continued unbroken since 2000.
Long-term poverty also rose according to the modest but adequate criterion in 2011, from 2.0% to 2.4% of the population.

Rising poverty among at-risk groups

According to the modest but adequate criterion, there was a particularly marked rise in poverty in absolute terms in 2011 among people in receipt of unemployment or social assistance benefit (+36,000 and +32,000 persons, respectively) and among the self-employed (+52,000). The number of self-employed people in poverty was higher than in the waged workforce for the first time in 2011 (175,000  versus 170,000  persons).

The risk of poverty rose in 2011 in all those groups which have traditionally had a high poverty risk already. Among households in receipt of social assistance benefit, the percentage with an income below the low-income threshold rose from 65% to 68%; the rise among single-parent families was from 25% to 28%; among single-person households aged up to 65 it rose from 17% to 19%; and among non-Western households it increased from 22% to 25%. The risk of poverty in the (relatively small) group of second-generation non-Western households was lower than that of the first generation in 2011 (18% versus 26%).

Sharper divisions between age groups

Child poverty was above average in 2011. According to the modest but adequate criterion, the child poverty rate was 10.6%, equivalent to 359,000 children aged up to 17 years. This figure is expected to rise faster in 2012 than in the other age groups, to reach 377,000 11.2%). People in their thirties and forties were at higher risk of poverty in 2011 (8%) than other adults, whereas in the past this age category did not constitute an at-risk group. As a result, the divisions between the age groups are becoming more sharply defined: the poverty risk for those in their fifties and for pensioners is below average, at 5% and 3%, respectively.

More financial difficulties

Households at risk of poverty more often have payment arrears. Where in 2008 only 8% of those with an income below the low-income threshold were in arrears with their rent or mortgage payments, this had doubled to 16% in 2011. Eight out of ten households with an income below the low-income threshold reported in 2011 that they felt constrained in their spending on food, clothing, home furnishings and holidays. The proportion of low-income households who felt forced to get into debt grew from 5% to 8% in 2012.
Measured using the modest but adequate criterion, just over a quarter of those in poverty reported difficulty in making ends meet in 2008; in 2011 this figure had risen to almost 35%. One in eleven poor households were unable to afford a hot meal every other day; one in twenty reported that they did not have enough money to heat their home properly.

Poverty Survey 2012 (Armoedesignalement 2012). SCP/CBS, The Hague: Netherlands Institute for Social Research/SCP. SCP publication 2012/34, ISBN 978 90 377 0633 8, price €16.00.
This publication is available from (Internet) booksellers or may be ordered from the websites www.scp.nl or www.verkoop.cbs.nl

More information:
SCP: Dr. J.C. Vrooman, tel. +31 (0)70 340 7846; e-mail: c.vrooman@scp.nl
CBS: Dr. P.H. van Mulligen, tel. +31 (0)70 337 4444; e-mail: persdienst@cbs.nl