Number of people living in poverty down in Estonia on year, perceived deprivation up

The share of people living in absolute poverty decreased. Photo: Arvo Meeks

According to Statistics Estonia, 20.2 percent of Estonia's population lived at risk of poverty and 2.7 percent in absolute poverty in 2023. Compared with 2022, the share of people living at risk of poverty decreased by 2.3 percentage points and the share of those living in absolute poverty by 0.8 percentage points.

The share of people living in self-perceived deprivation was up by 1.5 percentage points in 2024.

Epp Remmelg, leading analyst at Statistics Estonia, said that the at-risk-of-poverty rate reflects income inequality in a specific country. In 2023, close to 274,800 people in Estonia lived at risk of poverty, nearly 29,000 fewer than in 2022. Their net monthly income, taking into account the household composition, meaning the equivalized disposable income, was less than 807 euros.

The analyst noted that over the years, the at-risk-of-poverty rate has been highest among the elderly living alone and lone parent households.

«However, we see that in 2023, the at-risk-of-poverty rate decreased the most among these households, as well as among households with three or more children,» she added.

Of people aged 65 and over living alone, 71 percent were at risk of poverty, down by 8 percentage points from the year before. Of lone parent households, 30.5 percent lived at risk of poverty, 4.3 percentage points less than a year earlier.

Among working-age households with no children and two-parent households, the at-risk-of-poverty rate remained the same or increased by a few percentage points. This can be explained by the fact that, in 2023, the equivalized disposable income rose by 8 percent, but with the overall increase in income, child benefits and pensions increased more in percentage terms than earned income, she said.

The at-risk-of-poverty rate in East-Viru County, 35 percent, and West-Viru County, 29.2 percent, is more than twice as high as in Harju, 15.5 percent, and Rapla, 14.1 percent, counties. The rate increased only in the regions farthest from the capital: by 3.5 percentage points in East-Viru County, 3.4 percentage points in Võru County and 0.4 percentage points in Saare County.

The absolute poverty rate declined among the population aged 65 and over and among children and young people

In 2023, nearly 36,400 people lived in absolute poverty, 11,300 fewer than a year earlier. However, it is worth noting that this number is still higher than three, four or five years ago, Remmelg said.

The analyst explained that absolute poverty indicates the share of the population who are not able to meet their basic needs. Their net monthly income, taking into account household composition, was less than 338 euros, that is, below the estimated subsistence minimum.

The absolute poverty rate fell among people aged 65 and above. It also decreased among children and young people, or people aged 0-24 years, with 9,500 fewer of them living in absolute poverty in 2023 than a year earlier. The absolute poverty rate rose slightly among 25 to 49-year-olds, with 1,600 more of them experiencing absolute poverty than the year before.

The share of people living in deprivation, meaning people who cannot afford various items commonly available in society, increased by 1.5 percent year on year. In total 7.7 percent of the population, or nearly 104,700 people, felt deprived in 2024.

One in four, or 25.3 percent, of lone parent households and around one in eight, or 12.8 percent, people aged 65 or over living alone experienced deprivation in 2024. Deprivation increased by 34 percent in 2024 among lone parent households and rose significantly among households with three or more children and elderly couples.

According to the Ministry of Social Affairs, it is important to target the planned measures to where the need is greatest.

«It is still the people living alone and households with only one source of income who are most at risk of poverty. The absolute poverty rate is also higher among the unemployed. Our aim is to help the most vulnerable target groups -- the elderly and lone parents -- to get back on a better economic footing, both through various allowances and services,» said Kati Nõlvak, head of economic subsistence at the Ministry of Social Affairs.

Nõlvak noted that a number of measures have been taken in recent years to alleviate poverty and improve the livelihoods of those most in need. Last year saw the biggest pension increase in 15 years and pensioners have been guaranteed tax-free income equal to the amount of the average old-age pension. The nursing care reform, which came into effect in July last year, has made nursing homes more accessible and reduced both the burden of payment and the burden of care on loved ones.

Sickness and care benefits for parents returning from parental leave have also become fairer this year. Child and family allowances have increased, single parent's child allowance and maintenance allowance have doubled.

«Our goal is to reduce the share of the population at risk of poverty and social exclusion to 21 percent by 2030, and we have set a specific target of reducing the at-risk-of-poverty and social exclusion rate for children to below 15 percent,» Nõlvak added.

The estimations are based on the data of the 2024 Estonian Social Survey, in which 5,515 households were interviewed. The survey collects data about yearly income, which is why the 2024 survey asked respondents about the income in 2023. The social survey, called EU-SILC, is conducted in all European Union countries on the basis of a harmonized methodology.

At-risk-of-poverty rate is the share of persons with an equivalized yearly disposable income lower than the at-risk-of poverty threshold. The at-risk-of-poverty threshold is 60% of the median equivalized yearly disposable income of household members. Equivalized disposable income is the total household income divided by the sum of equivalence scales of all household members.

Deprivation rate is the share of persons who cannot afford at least five of the following 13 items: 1) to pay rent or utility bills, 2) to keep their home adequately warm, 3) to face unexpected expenses, 4) to eat meat, fish or a protein equivalent every second day, 5) a one-week holiday away from home, 6) a car, 7) to replace furniture when worn out or damaged, 8) to replace worn-out clothes with new ones, 9) to have at least two pairs of outdoor shoes in good condition that are necessary in our climate, 10) to spend a small amount of money each week on oneself, 11) to participate regularly in a leisure activity that costs money, 12) to get together with friends or family for a drink or meal at least once a month, or 13) to have an internet connection at home for personal use when needed.