New definition has fewer Dutch living in poverty
Fewer people in the Netherlands live in poverty than in previous estimations, largely due to a new definition of poverty drawn up by Statistics Netherlands (CBS), budget institute Nibud, and the Netherlands Institute for Social Research (SCP). The new definition has 540,000 Dutch living in poverty last year. According to the old calculations, this number was 820,000.
Last year, the poverty line was 1,510 euros per month for a single person and 2,535 euros for a couple with two young children. The researchers used to have five different ways to calculate poverty. For this report, they developed one new measurement method, which they will all continue to use.
According to the involved agencies, the new method is more accurate. It looks not only at a household’s income and fixed expenses but also its assets. For example, a family that has no income, but a lot of savings and no debts, is no longer considered poor.
The new definition also means that the number of people living in poverty has fallen more sharply than in previous calculations. This group has more than halved in five years. However, the group still living in poverty has bigger money problems.
Apart from the new definition, the decrease in the number of people living in poverty has various causes. Wage increases were favorable in 2019, coronavirus support measures helped low-income households in the pandemic, then came the energy allowance during the energy crisis in 2022, and minimum wage and the linked benefits increased last year.
But all these measures could not prevent the group that remained poor from having their money problems increase, on average. In 2018, poor households were, on average, 10 percent below the poverty line. Last year, that had increased to 16 percent.
The researchers noted a shift in the group of Dutch living in poverty. Previously, this group mainly consisted of people who lived on social assistance. “Compared to 2018, there were relatively more working poor people last year than there were people on welfare who were poor. Working poor people have a greater income deficit than poor people on Welfare,” said CBS economist Peter Hein van Mulligen. According to CBS, the group of working poor mainly consists of part-time workers and self-employed people who earn little from their businesses.
Amsterdam has the highest relative poverty rate, with 6.6 percent of Amsterdam residents living below the poverty line. The municipality of Vaals has the second highest poverty rate (6.4 percent), followed by Rotterdam (6.2 percent), The Hague (6.1 percent), and Vlieland (6.0 percent).
Roozendaal has, by far, the lowest poverty rate at 0.1 percent. Hilvarenbeek, Oost Gelre, and Dinkelland are all also below 1.0 percent. The national average is 3.1 percent
“Poverty is often accompanied by poorer physical and mental health, a reduced sense of self-esteem, and can lead to social exclusion. It affects people’s resilience and in many cases leads to lower trust in the government,” said Karen van Oudenhoven of SCP. “Growing up in poverty also often has negative consequences for children’s educational performance and future prospects.”