Pensions and benefits influenced significantly poverty rates in 2009

In 2009, 15.8% of the Estonian population lived in relative poverty, which is about 4 percentage points less than in 2008 when the at-risk-of-poverty rate was 19.7%. Social transfers (governmental benefits, pensions) helped to prevent the fall in poverty, if they were not included in income the at-risk-of-poverty rate was even 40.8% in 2009 (in 2008 – 37.5%).

In 2009, a person was considered to be at-risk-of-poverty if his/her monthly equalised disposable income was below 286 euros (4,480 kroons). For the first time during the last decade incomes decreased. This caused the fall of at-risk-of-poverty threshold by 24 euros (377 kroons) compared to the previous year.

Similarly to the previous year, it can be noticed that the number of younger people who are living in relative poverty is increasing, and that of persons aged 65 and older – decreasing. In 2009, every fifth 16–24-year-old person lived in poverty. An important reason for this is the high unemployment rate in the respective age group.

In 2009, the average old-age pensions increased by 8% compared to the previous year. Persons aged 65 and older were the only age group whose equalised disposable income increased in 2009 compared to the previous year. As the share of persons of pension age in population is large and their average incomes rose over the at-risk-of-poverty threshold in 2009, more than 42,000 pension aged persons got out of risk of poverty. As a result, the overall at-risk-of-poverty rate also decreased.

By type of household, the at-risk-of-poverty rate has increased the most in households of a couple aged 64 and less without children (2 percentage points) and decreased in households of a single person aged 65 and over (43 percentage points).

By regions, for the residents in Northeastern Estonia the at-risk-of-poverty rate was more than two times higher than for residents in the Northern Estonia. Similarly, the poverty risk for people living in rural settlements is significantly higher than for people living in urban settlements.

In 2009 as in previous years, the difference in income between the poorest and richest fifth of the population stayed fivefold.

More detailed data have been published in the Statistical Database (/uudised/sdb-update?db_update_id=8542).

At-risk-of-poverty rate by age groups, 2008–2009

The estimations are based on the social survey, which has been conducted by Statistics Estonia since 2004. In 2010, over 4,900 households participated in the survey. The survey collects data about yearly income, which is the reason why the survey of 2010 asks for data about incomes in 2009. The yearly income is necessary for calculating the indicators of poverty and inequality.

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

Social surveys are conducted on the basis of harmonised methodology in all European Union countries by the name of EU-SILC.