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STATISTICS MALTA

Malta: -1% at-risk-of-poverty (ARP) rate

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Malta 1 at risk of poverty ARP rateThe survey shows that the number of persons living in households with a national equivalised income below the at-risk-of-poverty line (€11,364) was 88,462. This translates into an at-risk-of-poverty rate of 16.6 per cent, a decrease of 0.1 percentage points when compared to the previous year.

Introduction

The European Statistics on Income and Living Conditions survey is an annual enquiry conducted by the National Statistics Office among persons residing in private households in Malta and Gozo. Income statistics refer to calendar year 2022, while non-income components refer to 2023, which is the data collection year.

The average gross household income for 2022 as derived from EU-SILC 2023, was estimated at €46,976, while the average disposable household income was estimated at €37,275.

In 2023, the severe material and social deprivation rate among persons living in households was 4.1 per cent. This figure was 0.8 percentage points lower than that estimated by EU-SILC 2022. The most influential variables were inability of the household to pay for one week’s annual holiday away from home (30.0 per cent), and inability of the household to face unexpected financial expenses (15.9 per cent).

At-Risk-of-Poverty or Social Exclusion indicator

The AROPE rate defines the proportion/number of people who are either at-risk-of-poverty, or severely materially and socially deprived, or living in households with very low work intensity (applicable only for persons aged 0-64). In EU-SILC 2023, the AROPE rate was estimated at 19.8 per cent, registering a decrease of 0.3 percentage points from 2022. A decrease of 1.9 percentage points can be noted across the 65 and over age group. Thus, the AROPE rate for this cohort stands at 31.4 per cent. On the other hand, an increase can be noted among persons under 18 years, with 2.1 percentage points, thus reaching a rate of 25.2 per cent for this cohort. For the 18-64 age group, the AROPE rate remained unchanged at 15.5 per cent. The at-risk-of-poverty rate among persons below 18 years of age was calculated at 22.0 per cent, increasing by 2.7 percentage points from the previous year. A decrease of 0.2 percentage points was observed for persons aged 18-64, bringing the ARP rate for this age cohort down to 12.1 per cent in 2023. The rate for those aged 65 or more went down to 29.0 per cent, equivalent to a decrease of 1.0 percentage points over EU-SILC 2022. Household Income

For income reference year 2022, the average gross household income was estimated at €46,976. On the other hand, the estimate for the average disposable household income was €37,275. Disposable income is defined as the amount of money available to households for spending purposes, after deducting taxes, social contributions, and alimonies.

Employment income made up 85.1 per cent of the total gross household income for 2022. The share of social benefits (including old-age benefits) for 2022 stood at 12.5 per cent. National Equivalised Income Distributions

The NEI of a household is defined as the household’s total disposable income divided by its ‘equivalent size’ (also referred to as consumption units). The NEI takes into account the size and age distribution of household members. The Gini coefficient is one of the measures of income inequality that varies between 0 and 100 per cent. A Gini coefficient of 0 per cent indicates a perfectly equal distribution of income. On the other hand, a Gini coefficient of 100 per cent indicates that there is full inequality of income.

The S80/S20 ratio, which compares the average NEI of the highest and lowest 20 per cent income earners, was calculated at 5.4.

The Gini coefficient for Malta, as derived from EU-SILC 2023, increased by 1.9 percentage points to 33.0 per cent, when compared to the previous year.

Monetary poverty

The at-risk-of-poverty threshold is defined as 60 per cent of the median NEI. EU-SILC respondents whose NEI falls below this threshold are considered to be at-risk-of-poverty.

The ARPT derived from EU-SILC 2023 was estimated at €11,364, 4.3 per cent higher when compared to the previous year.

Based on the income year 2022, the number of at-risk-of-poverty persons living in Malta was estimated at 88,462 or 16.6 per cent of the target population.

When all social transfers, including pensions, are excluded, the at-risk-of-poverty rate for 2023 increases by 17.0 percentage points, or 90,190 persons. This illustrates the importance of social welfare in assisting the most vulnerable persons in society.

The ARP rate for households with and without dependent children were calculated at 17.9 and 15.7 per cent respectively. Members of single parent households were noted to be more susceptible to being at-risk-of-poverty, with 41.6 per cent of these having an equivalised disposable income below the ARPT. Members of one person households with an age of 65 years or more, and members of households with two adults and no dependent children with at least one adult aged 65 years or more, were also more prone to being at-risk-of-poverty.

The ARP rate among persons living in households with at least one member aged 0-64 years, decreased as the household work intensity increased. Indeed, 73.5 per cent of persons living in households with very low work intensity were found to be at-risk-of-poverty in EU-SILC 2023.

An increase was recorded in the at-risk-of-poverty rates for the unemployed, retired, and employed persons for the reference year when compared to the previous EU-SILC. On the other hand, there was a decrease in the at risk-of-poverty rate for the other inactive persons.

At district level, the distribution of persons under the ARP threshold was uneven across the Maltese Islands, with the Gozo and Comino district having the largest share of ARP persons followed by the Northern district. On the other hand, the South Eastern district registered the lowest ARP rate.

Material and Social Deprivation Indicators

The Material and Social Deprivation indicators are based on 13 items, of which seven deprivation items relate to the person’s household and six deprivation items relate to the persons themselves. The list of components was adopted by the EU Member States in 2017. From this set of variables two major indicators are obtained, namely the Material and Social Deprivation indicator and the Severe Material and Social Deprivation indicator.

When compared to 2022, the highest increases in 2023 were recorded in the respondents who said that their household was unable to afford a meal with meat, chicken, fish, or vegetarian equivalent every second day, and respondents whose household found it difficult to face unexpected financial expenses. The MSD indicator for EU-SILC 2023 stood at 9.2 per cent, 0.4 percentage points lower than the previous year. Moreover, the SMSD indicator for EU-SILC 2023 decreased by 0.8 percentage points, standing at 4.1 per cent.

Persons are considered to be at-risk-of-poverty or social exclusion if residing in a household that falls under one of the following three conditions: at-risk-of-poverty; Severe Materially and Socially Deprived; or has Low Work Intensity. The greatest contributing factor of at risk-of-poverty or social exclusion in 2023 was from persons who are at-risk-of-poverty with 16.6 per cent. The Gozo and Comino district registered the highest rate of AROPE persons, at 26.4 per cent. The lowest AROPE rate was recorded in the South Eastern district, at 15.2 per cent.

Well-Being Characteristics

On a scale from zero to 10, where zero represents not satisfied at all, and 10 represents completely satisfied, respondents at-risk-of-poverty or social exclusion reported lower average scores with regard to their satisfaction with overall life, financial situation, current job, and personal relationships, when compared to those not at-risk-of-poverty or social exclusion.

Average scores for overall satisfaction in relation to at-risk-of-poverty or social exclusion were slightly higher in 2023, when compared to 2022. Particularly, in 2023 respondents at-risk-of-poverty or social exclusion reported a mean score of 7.0 for satisfaction with their overall life, an increase of 0.2 points from 2022, a mean score of 6.2 for satisfaction with their financial situation, an increase of 0.4 points from 2022, a mean score of 7.4 for satisfaction with their current job, an increase of 0.1 points from 2022, and a mean score of 8.5 for satisfaction with personal relationships, an increase of 0.3 points from 2022. 

 

 ARTICLE WRITTEN BY NSO

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