Portugal: Almost two million people at risk of poverty in 2020 – report

The risk of poverty increased between 2019 and 2020, according to provisional data from Statistics Portugal (INE) revealed in the report “Portugal, Balanço Social 2021”, reaching almost 2 million people and with higher rises among women and the elderly, but also in families.

According to information in the report “Portugal, Social Balance 2021 – A portrait of the country and a pandemic year”, presented on Tuesday, based on preliminary data from the Income and Living Conditions Survey (ICOR) that INE (National Statistics Institute) made available in December 2021, the at-risk-of-poverty rate increased by two percentage points (pp) between 2019 and 2020.

The data collected in the ICOR are based on the financial and professional situation of Portuguese families in 2020, thanks to which “it is possible to briefly describe the impact of the pandemic on the living conditions of families”, starting with the fact that the at-risk-of-poverty rate after social transfers rose from 16.2% in 2019 to 18.4% in 2020.

“The number of people at risk of poverty increased from 1.7 million in 2019 to 1.9 million in 2020,” says the report prepared by Nova School of Business & Economics, one of the five faculties of Nova University of Lisbon.

This at-risk-of-poverty rate increased most among women (2.5 pp) and among people over 65 (2.6 pp), and also rose among all types of families, “especially in families with children” (2.7 pp).

Within families, the biggest increase was among single-parent families, which experienced a 4.7 pp rise in poverty to 30.2% during 2020.

Among unemployed people, the at-risk-of-poverty rate reached 46.5%, which is 5.8 pp more than in 2019.

In addition to preliminary data for 2020, the Social Balance reflects the social state of the country in 2019, a year in which the at-risk-of-poverty rate decreased by 1 pp, to 16.2%, compared to 2018, being the 5th consecutive year in which this indicator decreased.

“The at-risk-of-poverty rate before social transfers also decreased compared to 2018, reaching 42.4%. As in 2018, the poverty incidence rate is higher among the unemployed, single-parent families and less educated individuals,” the report reads.

In that year poverty was more prevalent among the unemployed (33.3 per cent), single-parent families (25.5 per cent) and people with lower levels of education (21.9 per cent), with women also having a higher poverty risk rate than men (16.7 per cent versus 15.6 per cent).

“Children (0 to 17 years old) and older people (over 65 years old) have a higher at-risk-of-poverty rate than the national average”, with 19.1% and 17.5%, respectively, in 2019.

With regard to the elderly, the report points out that the at-risk-of-poverty rate of 17.5% is 2.3 percentage points above the national average and that the figure is slightly higher than in 2018, when the poverty rate stood at 17.3%. This means that in 2019, 381,000 older people were poor.

“As is to be expected, pension payments reduce the at-risk-of-poverty rate for this segment of the population significantly: to 20% in 2019. The effect of the remaining transfers is smaller, but still relevant: between 2017 and 2019, the at-risk-of-poverty rate would be about 1.15 times higher than in the absence of these transfers.

On the other hand, and regarding the percentage of people who are persistently at risk of poverty, i.e. in the year under review and in most of the three previous years, the rate is 9.8%, which means, according to the researchers, that “60% of poor people in 2020 were in a situation of persistent poverty”, and of these, “6% never left poverty in the four-year period between 2016 and 2019”.

The report also points out that one of the determinants of poverty is the relationship with the labour market, highlighting that one in three unemployed people are poor, but also that, in some cases, working is not enough to escape poverty, since one in 10 employed people are poor.

In fact, “40.6% of poor individuals live in households where people work full time”.

Despite improvements, poor families are the ones who have worse housing conditions, have worse health (self-assessed) and have more difficulty in accessing health care.

With regard to inequality in income distribution, it is known that in 2018, the richest 25% held 42% of the country’s income, a figure that in 2019 rises to almost 46%.

The social portrait also shows an unequal country, with the Azores remaining the one where there is the highest rate of poverty risk (28.5%), the Algarve and the North where there is the highest rate of severe material deprivation (6.7%) and the highest salaries centered in the coastal region, especially in the metropolitan area of Lisbon, Centre and North.