In the Czech Republic, income poverty threatens 900,000 people

The number of people at risk of income poverty in the Czech Republic declined for the second year in a row. Even so, there are still more than 900,000 of them.

Income poverty affected 8.1 percent of the population last year, about 901,200 people. In 2020, it was 9.5 percent or 91,400 more people. In 2019, the total was 10.1 percent. This was announced on Thursday by the Czech Statistical Office (CSO).

According to the statisticians, the decline was since household incomes grew despite the pandemic, albeit unevenly. “Social transfers help socially vulnerable groups,” said Jiří Pekárek of the Czech Statistical Office. These are mainly social benefits.

For example, the number of seniors over 65 living independently who would be classified as poor by this measure fell by a quarter. On the other hand, it increased by more than a quarter for complete families with three or more children. There was also a slight increase among single mothers.

A household is considered at the income poverty line if it does not have 60 percent of the median net income, which is determined by the number of people occupying it and is based on the previous year’s income.

Last year, for instance, the vulnerability threshold was CZK 14 055 per month for a single person, while for a complete family with two small children, it was CZK 29 515. This means that the households in question had to have less money to be considered poor from this point of view.

“However, this indicator does not say anything in the sense of material need or lack thereof. It is based solely on household income, ” warned Jiří Pekárek of the Czech Statistical Office.

The impact of foreclosures

In other words, people may have much higher incomes that far exceed the income poverty line. Still, they may live in poverty due to foreclosures, high rents, or other necessary expenses. Moreover, it does not consider the high inflation and associated price increases that have plagued the Czech Republic in the past year. Prices were up 6.6 percent year on year in December.

Therefore, statisticians also monitor another parameter, namely the degree of material deprivation, where families cannot afford five items out of thirteen on a selected list. This includes, for example, a week’s holiday for all its members, new furniture, meat every day, paying an unexpected expense, or the ability to financially prevent debt. Here too, there was a drop, from five to 4.8 percent. So it was a year-on-year drop from 518,500 to 505,000.

There was also an improvement in this area for children. “The materially deprived ones are decreasing. Only 3.7 percent of Czech families are unable to pay for a week’s holiday or camp,” said Simona Měřinská from the Czech Statistical Office. She said that as recently as 2014, 7.1 percent of families were affected. Similarly, two children out of 100 could not afford meat a day last year, while one in 100 could not afford new clothes, fruit or vegetables, books, or a birthday party.