4th Feb 2023

Netherlands tops EU social safety net for the poor

  • 'There's only one country where the minimum income is above the poverty line,' said EU jobs commissioner Nicolas Schmit (r) (Photo: European Union, 2022)
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The Netherlands is the only EU state whose minimum income keeps people out of poverty, a new European Commission report shows.

The income is not measured as a minimum wage but rather as a social net, like a cash payment, to ensure people do not become destitute.

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The figures published on Wednesday (28 September) come at a time when EU states are grappling with inflation and a sharp increase in energy and food prices.

However at the bottom end is Romania, Bulgaria and Hungary, where minimum net incomes fall way below what is needed to keep people out of poverty, says the document.

Speaking to reporters in Brussels, the EU jobs commissioner Nicolas Schmit said that those at risk of poverty had already increased due to pandemic caused by Covid.

More than 95 million people were already at the risk of poverty in the EU last year, representing some 20 percent of the population.

Now Russia's war in Ukraine is another factor that is likely to plunge more into the poverty trap, he said.

According to Schmit, minimum incomes in some 22 EU states fall below the poverty line.

"And around 20 percent of jobless people at risk of poverty are not eligible to receive any income support," he said.

The Brussels-executive also estimates that between 30 to 50 percent of those eligible for minimum income do not even get help.

This is generally because they do not know they can or they do not know how.

The European Commission is now asking EU states to act as part of wider goal to lift 15 million people out of poverty over the next eight years.

But the request is only a recommendation, which includes demanding EU states link their minimum-income scheme with the labour market integration of those who can work.

The schemes should not discriminate against age and should also reach individuals, especially single women with children, noted Schmit.

In an emailed statement, the Greens at the European Parliament, welcomed the proposal.

But they say a legislative bill like a directive is needed to better enforce the idea.

"So far, non-binding instruments have failed to keep people in the EU out of poverty," said Sara Matthieu, a Belgian Green MEP.

They say that around 35 percent of the working age EU population at risk of poverty is not covered by minimum income or any other social benefits.

The EU's statistical office Eurostat, citing figures from 2019, says EU states collectively spent €3,761bn on social protection benefits.

But almost half of that went to retirement payouts, followed by health care at around 30 percent. Only around €59bn went to income benefits.

Meanwhile, Germany, Slovenia and the Czech Republic are the only three EU states where the minimum wage is so low it keeps people below the poverty line.

Germany has since passed legislation to increase the minimum wage to €12 per hour as of next month.

The European Commission report further notes that the tax-benefit system in Slovenia and the Czech Republic "do not seem to support minimum wage earners sufficiently to ensure that work pays. "

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