Poverty: a European perspective

It is helpful to compare Irish levels of poverty to those elsewhere in Europe. Eurostat, the European Statistics Agency, produces comparable ‘at risk of poverty’ figures (proportions of the population living below the poverty line) for each EU member state. The data is calculated using the 60 per cent of median income poverty line in each country. Comparable EU-wide definitions of income and equivalence scale are used.[1] The latest data available for all member states is for the year 2023.

As Table 1 shows, Irish people experience a below average risk of poverty when compared to all other EU member states. Eurostat’s 2008 figures marked the first time Ireland’s poverty levels fell below average EU levels. This phenomenon was driven by sustained increases in welfare payments in the years prior to 2008. Ireland’s poverty levels have remained below EU-average levels since then. In 2022, across the EU, the highest poverty levels were found in the most recent accession: Estonia, Latvia, Romania, Bulgaria and Lithuania. The lowest levels were in Czechia, Denmark and Ireland. The 2023 figure is the lowest rate of income poverty recorded for Ireland since Eurostat started compiling the data from 1995. As outlined earlier, this low rate has been driven by the welcome targeting of short-term cost of livings supports on low income households, those who live alone and children.

Table 1: The Risk of Poverty in the European Union, 2023

The average risk of poverty in the EU-27 for 2023 was 16.2 per cent. Overall, while there have been some reductions in poverty in recent years across the EU, the data suggests that poverty remains a large and ongoing EU-wide problem. In 2023 the average EU-27 level implied that 71.7 million people live in poverty across the EU.

EU 2030 Social Targets – Risk of Poverty or Social Exclusion

As part of the Europe 2020 Strategy, European governments adopted policies to target these poverty levels and are using as their main benchmark the proportion of the population at risk of poverty or social exclusion. One of the five headline targets for this strategy aimed to lift at least 20 million people out of the risk of poverty or exclusion categories by 2020 (using 2008 as the baseline year). Unfortunately, despite these commitments the target was not achieved.

The European Commission returned to this issue in June 2022 when the European Council adopted a new set of Social Targets to be achieved by 2030. Three targets were adopted:

(i) at least 78 per cent of people aged 20 to 64 should be in employment;

(ii) at least 60 per cent of all adults should participate in training every year; and

(iii) the number of people at risk of poverty or social exclusion should be reduced by at least 15 million, including at least 5 million children, compared to 2019.

The poverty and social exclusion target has been defined by the European Council on the basis of three indicators: those living on an income below the poverty line after social transfers; an index of material deprivation[2]; and the percentage of people living in households with very low work intensity.[3] The number of people at risk of poverty or social exclusion is calculated as the sum of persons relative to the national population who are at risk of poverty or severely materially deprived or living in households with very low work intensity, where a person is only counted once even if recorded in more than one indicator.[4]

Across the EU in 2023 there were 94.5 million people classified as being at risk of poverty or social exclusion, of these almost 1 million were in Ireland. Children (under 18 years) accounted for almost 20 million of the EU total and 293,000 of that recorded for Ireland.

While Social Justice Ireland regrets that the Europe 2030 targets have shifted its indicator focus away from an exclusive concentration on the ‘at risk of poverty’ rate, we welcome the continued attention at a European level to issues regarding poverty, deprivation and joblessness. However, the failure to reach the 2020 target underscores the need for more than token actions over the next 6 years. Also, it is worth noting that even if the EU 2030 target is achieved, it implies that 77 million Europeans would continue to experience poverty and social exclusion including 13 million children. Achieving the 2030 target would represent progress, but there would be a lot of work remaining.

[1] Differences in definitions of income and equivalence scales result in slight differences in the poverty rates reported by Eurostat for Ireland when compared to those reported earlier which have been calculated by the CSO using national definitions of income and the Irish equivalence scale.

[2] Material deprivation covers indicators relating to economic strain and durables. Severely materially deprived persons have living conditions severely constrained by a lack of resources. They experience at least 4 out of 9 listed deprivations items (Eurostat 2012).

[3] People living in households with very low work intensity are those aged 0-59 living in households where the adults (aged 18-59) worked less than 20 per cent of their total work potential during the past year.

[4] See The Social Dimension of the Europe 2020 Strategy: A report of the Social Protection Committee. Luxembourg: Publications Office of the European Union for a more detailed explanation of this indicator.