At-risk-of-poverty rate reaches 19% of the population in 2023

The latest results of the 2023 survey on household incomes and living conditions, relating to household incomes in 2022, confirm the trend towards a worsening of the economic and financial difficulties encountered by resident households. Despite the increase in household income and successive indexations, the at-risk-of-poverty rate has risen by 1.5 percentage points[1] and will approach 19% of the population in 2023. Among those particularly at risk of poverty are children under 18 and single-parent households.

One child in four at risk of poverty

In Luxembourg, more than 30,000 children - around one in four - are at risk of poverty. These children live in households[2] with a standard of living of less than EUR 2,400 per month and per person. Between 2022 and 2023, this indicator will have risen by 1.4 points to 23.9%, a particularly high level for Luxembourg. In comparison, the at-risk-of-poverty rate is 11% for people aged 60 or over.

Graphique 1 : at-risk-of-poverty rate (%), total population and by age, 2022-2023

Source: STATEC, LU-SILC survey on household income and living conditions.

Almost half of single-parent households at risk of poverty

Among single-parent households, the risk of poverty exceeds 43% of the population. More generally, a quarter of members of a household with children have a standard of living below EUR 2,400/month, compared with 12% of those living in a household without children. Conversely, it is among childless couples that poverty is lowest, with only 10% of people affected.

Graphique 2 : at-risk-of-poverty rate (%) by household composition, 2022-2023

Source: STATEC, LU-SILC survey on household income and living conditions. Note for the reader: the results of the 2023 LU-SILC survey relate to household incomes in 2022; those of the 2022 LU-SILC survey relate to household incomes in 2021.

The wealthiest 20% of the population have an average standard of living 4.8 times higher than that of the least well-off 20%.

This indicator has risen by 0.3 percentage points and highlights a more unequal distribution of income between individuals in Luxembourg. The Gini coefficient, which is another indicator commonly used to measure the level of inequality within an income distribution, has also increased, rising from 29.1% in 2022 to 30.6% in 2023.

Tableau 1 : S80/S20 inter-quintile ratio and Gini coefficient (%), 2022-2023

Source: STATEC, LU-SILC survey on household income and living conditions.
*Note for the reader: the inter-quintile ratio corresponds to the ratio between the average standard of living of the 20% most well-off individuals and that of the 20% least well-off.

The inclusion of childcare service vouchers (CSA) reduces the risk of child poverty by more than 3 points

To give parents the opportunity to have their children looked after by professional childcare providers, the ‘childcare service voucher’ (CSA) scheme was introduced in 2009, then reformed in 2012, 2017 and 2022. Since 2022, the hours spent by a child at a basic school in a professional childcare facility such as a halfway house, crèche, day centre or parental assistant have been free of charge during the school term, as have meals, up to a maximum of 5 per week. Free schooling does not apply to infants or children enrolled in early education. Social transfers ‘in kind’ such as the CSA represent a substantial benefit for households with children[3].

Child poverty falls significantly if the CSA is treated as a monetary transfer to households: the fall exceeds 3 percentage points, with the poverty rate for people under 18 falling to 20.3%.

All these data, together with updated figures, will be the subject of a more detailed analysis in the Work and Social Cohesion Report (TCS) to be published by STATEC in September 2024 (09/2024).

[1] The percentage change is used when analysing and comparing statistical data over time; percentage points are used when comparing two different percentages, in this case the change in the poverty rate.

[2] A household's standard of living is obtained by dividing its disposable income after tax and social security contributions by its ‘size’ calculated in ‘adult equivalents’ (using the modified OECD scale). This adjustment makes it possible to compare the living standards of households of different sizes and compositions.

[3] In the case of the CSA, this valuation was made possible by using the eligibility scales currently in force.