Absolute poverty

Absolute poverty means that a person’s income is below the absolute poverty threshold. The threshold is calculated on the basis of equivalised disposable income that takes into account the composition of the household (the weight of the first adult member is 1, the weight of each additional member aged at least 14 years is 0.7 and the weight of everyone under 14 years of age is 0.5), i.e. the total household income is divided by the sum of equivalence scales of household members. The absolute poverty threshold is the estimated subsistence minimum, which represents the financial cost of meeting minimum needs.

The absolute poverty rate is the proportion of people whose equivalised disposable income is below the absolute poverty threshold.

Absolute poverty rate before social transfers is the absolute poverty rate where social benefits paid by the state or municipalities are not included in household income. It is calculated in two ways: pensions are considered part of transfers and are excluded from income or they are included in household income similarly to wages.

Absolute poverty gap refers to the difference between the median income of persons in absolute poverty and the poverty threshold in percentages.

The persistent absolute poverty rate is the proportion of persons whose equivalised disposable income was below the absolute poverty threshold in the reference year and in at least two of the previous three years.