New government poverty calculation method criticized by food bank and poverty fund
The fact that fewer Dutch people are living in poverty due to a new definition of poverty is a paper reality, according to the Armoedefonds. “In the new definition, nobody has an extra sandwich, shampoo, or necessary school materials,” said Henk de Graaf, the director of the Armoedefonds, also known as the poverty fund in English.
Statistics Netherlands (CBS), Nibud, which is an independent foundation for family welfare, and The Netherlands Institute for Social Research (SCP) have implemented a new definition, which resulted in lower poverty numbers.
According to these new calculations, around 540,000 people lived below the poverty line compared to around 830,000 people under the old calculations. The big difference is that households with certain financial reserves are no longer considered poor.
The Armoedefonds warns against being blinded by the new figures. "Practice consistently shows that a majority of poverty relief organizations indicate that the number of people asking them for help is increasing," according to the foundation.
According to De Graaf, the new figures should therefore, "not be a free pass" for the Cabinet "not to take action." The foundation finds it "exciting" to see what the new calculation method will mean in practice and is concerned about how it will work out for people with high healthcare costs or debts, "especially now that the energy allowance is being eliminated."
In addition, people who live in poverty are also increasingly short of money, the fund reported. The institutions that calculate the poverty numbers confirm this. Also, the group that is just above the poverty line is "huge", according to De Graaf.
For those people, the problems are "often just as dire. Rising costs, limited access to help, and ongoing uncertainty make this situation hardly better than that of people below the poverty line", according to the director.
Voedselbanken Nederland, the organization for food banks in the Netherlands, thinks that the new definition will not have much influence on the number of customers they get. However, the association is "very concerned" about a group of working people who have been turning to the food bank for help since the end of last year.
These are mainly single parents and self-employed people who get into trouble due to rising costs, director Hens Steghouwer explained. And due to the increasingly rising costs, this group is only going to increase in size, he added.
State Secretary for Social Affairs Jurgen Nobel said that the news of fewer people being defined as poor under the new calculation method is positive. “But we also know that poverty cannot always be seen with numbers.”
He wants to speak with Nibud, SCP, and the Netherlands Bureau for Economic Policy Analysis (PCB) to discuss “which insights this new method offers.” He added that this can be used to tackle poverty and debt in the most efficient way.
Nobel, a member of the VVD party, emphasized that working people above the poverty line struggle to make ends meet. “The most important thing is that work must pay off.” He pointed to the government's plans to reduce the burden on people.
Marcel Warnaar, one of the authors of the report concerning the new calculation method, said that the new method clears up who is genuinely poor and not just poor on paper.
One group that is now being filtered out, for example, is the group of self-employed people with considerable assets, he explained. "Putting them in the poor box is actually not entirely fair."
Warnaar, who works at Nibud, explains that self-employed people can have a low income on paper while they have a considerable amount of money in the bank. This can happen if they have a bad year or because they are "shifting things around a bit" fiscally. People who retire early and who have no income on paper can also have assets.
Pension pots that people save themselves also count towards their assets. "That is certainly a point of attention," said SCP researcher Benedikt Goderis. "Unfortunately, we cannot distinguish the disposable assets of people who save for their pension from those who save for something else."
"In general, I think this gives a good picture of poverty in society, but there are vulnerable groups that are currently being ignored," said Goderis. For example, people with very high healthcare costs could previously fall under the SCP poverty line, but now, a high personal contribution to healthcare is no longer included.
Reporting by ANP