The most commonly used cut-off for determining households who are at-risk-of-poverty is households with an equivalised disposable income that is less than 60 per cent of the national median equivalised disposable income. The EU’s Statistics on Income and Living Conditions (EU-SILC) give comparable outturns for this measures.
To start here is the headline at-risk-of-poverty rate using the 60% cut-off.
Ireland and the UK are the only EU15 countries for which 2018 figures are still not available. In any event Ireland has around the sixth-lowest at-risk-of-poverty rate in the EU15, with the rate itself having been remarkably stable over the past ten years or so.
An important determinant of the living standards of any household is the amount of their income they have to devote to cover housing costs. As part of the EU-SILC, at-risk-of-poverty are also calculated for income after housing costs are deducted.
The housing costs include any service charges, utilities, taxes and repairs paid by the occupant as well as rent for tenants and mortgage interest for owner occupiers. The same income thresholds are used as for the headline rate.
Here are the at-risk-of-poverty rates after housing costs are deducted for the EU15.
Naturally, the rates are higher as a lower income (income after housing costs) is being assessed relative to the same threshold. In this instance, Ireland’s relative position improves and has around the fourth lowest at-risk-of-poverty rate after housing costs are deducted from income.
One notable change is Denmark which goes from second-lowest for the headline rates to third-highest after housing costs have been deducted. The reason for this is that at-risk-of-poverty households in Denmark face housing costs that are a higher share of their income than in other countries.
This can be shown by looking at the median of the housing cost burden as a share of disposable income for households that are at-risk-of-poverty.
If can be seen that the median household cost burden for Irish at-risk-of-poverty households is close on the lowest in the EU15. Around half of at-risk-of-poverty households in Ireland face a housing cost that is more than 20 per cent of their disposable income. Unsurprisingly, Denmark is high in this chart with half of at-risk-of-poverty households there facing a housing cost that is more than 50 per cent of their disposable income.
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