No further deterioration of financial position minimum incomes

More than one in every ten households in the Netherlands live on a minimum income. Half of them have an annual income below 9.8 thousand euro. In 2004, this so-called median income of people living on a minimum income was slightly more than half the median income of all households. This situation has hardly changed since 2000.

Income gap rather stable

In 2004, nearly 660 thousand households had to live on a minimum income. Two thirds concerned social benefit recipients or pensioners, one third were wage earners or self-employed. The median income of people who had to live on a minimum income was 55 percent of the median income of all households. This percentage has been more or less stable since 2000, so the gap between the median income of people who have to live on a minimum income and the median income of all households did not grow.

Median standardised disposable income of minimum incomes

Older minimum incomes occupy relatively favourable financial position

In the period 2000-2004, the median income of over-65s with a minimum income was about 63 percent of the median income of all households. The financial position of under-65s living on a minimum income did not change very much either. Their median income wavered around 53 percent of the median income of all households.
The relatively unfavourable position of under-65s is caused by the fact that many people in this group are wage earners or self-employed, whose income level is below the social minimum. Nearly all over-65 households receive an old age pension and since the mid-1990s over-65s can benefit from a special tax deduction for older people. 

Income households need for subsistence approximates minimum income

For minimum incomes, the gap between the actual income and the minimum income needed for subsistence has narrowed. In 2000, the amount minimum incomes claim they need for subsistence was 6 percent below the actual income. In 2004, it was only 2 percent. On average, the actual income of minimum incomes was only just above the income deemed necessary to manage financially. However, this does not apply to all minimum incomes. In 2004, about 42 percent of households living on a minimum income reported the income they received was lower than what they actually needed to make both ends meet.

Minimum household income needed for people living on a minimum income as a proportion of the actual income

Hendrika Lautenbach and Ger Linden