After a decline for five years in a row, the number of people living below the poverty line will increase again in the Netherlands in 2024. Last year, more than 550,000 people lived in poverty: 3.1 percent of the population. That is almost 75,000 more than the year before, when 2.7 percent lived in poverty.
This increase can be explained by the disappearance of the temporary energy surcharge of 1,300 euros. They received the very lowest incomes in 2022 and 2023 through their municipality, to compensate for the sharply increased energy prices after the Russian invasion of Ukraine.
Yet the effect of this on poverty is remarkable, because the outgoing Rutte IV cabinet explicitly tried to prevent this on Budget Day 2023. The cabinet then compensated for the disappearing energy allowance by increasing two allowances from 2024: the child-related budget and the housing allowance. According to estimates by the Central Planning Bureau (CPB), this would be sufficient to keep the poverty rate the same in 2024.
But as the CPB itself always warns: estimates are not predictions. Reality may differ from theoretical prospects.
Actual costs
This applies even more now to the poverty figures from Statistics Netherlands have been more accurate and practice-oriented since last year. The statistical office looks at what people actually pay for their home, energy, health insurance and deductible. Anyone who, after these expenses, has too little money left over for other necessary expenses, lives in poverty. Unless that person has a large fortune.
This practical approach also explains the difference with the calculations of budget institute Nibud, where NRC reported on Monday. Nibud concluded that the lowest incomes have had considerably more to spend over the past two and a half years due to the increase in allowances.
But in that article, the interim director of Nibud, Cora van Horssen, said that their calculations also show a theoretical reality.
Nibud calculated eight ‘model households’ at social assistance level. One of the assumptions is that they apply for all income schemes to which they are entitled. Standard amounts are also calculated for, for example, rent and energy costs. Then you shouldn’t have bad luck, said Van Horssen. “Like when you are forced to live in a rented home that is too expensive, or in a poorly insulated house.” The CBS figures do show those people who are unlucky.
Child poverty did not increase
Both the Nibud and CBS figures show that politicians in The Hague gave priority to combating child poverty. Families with children improved the most in the Nibud calculations, due to the increase in the child-related budget. And CBS now reports that the percentage of children growing up in poverty did not increase. That remained 2.8 percent.
In addition, the poverty trend is still declining, says CBS chief economist Peter Hein van Mulligen. He points to the poverty rate of 2021, the year before the introduction of the energy surcharge. At 4.9 percent, this was considerably higher than last year’s 3.1 percent.
The main driver of this decline, says Van Mulligen, is the tightness on the labor market. “The number of people with work has increased enormously. And with a job there is a much greater chance that you have an income above the poverty line.”
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The Hague significantly improved the lowest incomes, but made many people more dependent on the complex benefits system
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