Over 85,000 living in households at risk of poverty in 2023

Malta’s at-risk-of-poverty rate has edged down just 0.2 points from last year, meaning 16.7% of people are living in households whose national equivalised income is €10,893.

That means that 85,797 people in Malta live in a household where they earned 60% of Malta’s average gross income once divided by average household size – this threshold, the poverty lined, was set at €10.893, having risen 6.6% above 2021.

The data stems from the European Statistics on Income and Living Conditions (EU-SILC) survey, an annual enquiry conducted by the National Statistics Office (NSO) among persons residing in private households in Malta and Gozo.

In 2021, the average gross household income was estimated at €43,186, while average disposable household income was estimated at €34,814. Disposable income is defined as the amount of money available to households for spending purposes, after deducting taxes, social contributions, and alimonies.

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, 73.3% of persons living in households with very low work intensity were found to be at-risk-of-poverty.

At a district level, the distribution of persons under the ARP threshold was uneven across the Maltese islands, with the Northern Harbour district having the largest share of ARP persons followed by the Northern district. On the other hand, the Southeastern district registered the lowest ARP rate.

Severe material deprivation

The 2022 severe material and social deprivation rate was also 0.5 points lower than 2021 at 4.9%: this index is made up of various variables, the main ones in this case being inability of the household to pay for one week’s annual holiday away from home (33.3%), inability of the household to replace worn-out furniture, and inability of the household to face unexpected financial expenses (15.4%).

When compared to 2021, the highest increases in 2022 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, respondents who said that they found it difficult to regularly participate in a leisure activity, and respondents who found it difficult to spend a small amount of money each week on themselves.

Combined indicators

Together, at-risk-of-poverty or social exclusion rate (AROPE) at 20.1% decreased by 0.2 points over 2021. The AROPE reveals the share of persons who are either at-risk-of-poverty, severe materially and socially deprived, or residing in a household with low work intensity.

Persons are considered to be at-risk-of-poverty or social exclusion (AROPE) if residing in a household that falls under one of the following three conditions: at-risk-of-poverty (ARP); Severe Materially and Socially Deprived (SMSD); or has Low Work Intensity (LWI).

The Northern Harbour district registered the highest rate of AROPE persons, at 25.7%. The lowest AROPE rate was recorded in the Southeastern district, at 11.5%.

Household Income

Employment income made up 81% of the total gross household income for 2021. The share of social benefits, including old-age benefits, for 2021 stood at 15.5%.

When all social transfers, including pensions, are excluded, the at-risk-of-poverty rate for 2022 increases by 18.4 percentage points, or 94,368 persons, showing 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 15.3 and 18.1% respectively.

Members of single parent households were noted to be more susceptible to being at-risk-of-poverty, with 43.3% of these having an equivalised disposable income below the ARPT.

Members of one-person households aged 65 or over, and members of households with two adults, and three or more dependent children, were also more prone to being at-risk-of-poverty.