One-fifth of people in Latvia are at risk of poverty
The number of people at risk of poverty in Latvia has increased significantly during the first year of the Covid-19 pandemic. In 2020, 439,000 people, or 23.4 percent of the population, were at risk of poverty in Latvia, which is 1.8 percentage points more than in 2019, according to data from the Central Statistical Bureau.
The poverty risk threshold - the monthly income per household that is taken into account when determining whether a family is above or below the risk of poverty - has also increased over the past year. For a one-person household, the threshold is €472 per month, while for a family with two adults and two children it is almost €1,000.
The income threshold for poverty is rising
Last year, almost half a million people had a monthly income below the poverty line. Experts at the Central Statistical Bureau explain that this figure shows the percentage of the population whose disposable income is below the poverty line. Last year, as disposable incomes rose, so did the poverty risk threshold, reaching €472 per month for a one-person household (€441 per month in 2019). For households with two adults and two children under 14, the poverty risk threshold reached €991 per month in 2020 (€972 per month in 2019). The at-risk-of-poverty threshold has doubled since 2012, when it was €233 in 2012 for a one-person household and €490 for a family with two children.
The number of people at risk of poverty has fluctuated since 2012. In 2017, it reached its highest level in recent years, with 446,000 people at risk of poverty. In 2018 and 2019, the number of people at risk of poverty decreased, then increased again in 2020.
Latgale has the highest risk of poverty
Last year, Latgale had the highest share of people at risk of poverty (36%), while the lowest shares were in Pierīga (16.1%) and Riga (17.8%). In Vidzeme, 32 percent of the population was at risk of poverty, in Kurzeme - 29.5 percent and in Zemgale - 24.1 percent.
Last year, the risk of poverty increased most sharply among the senior citizens over 65.
In 2020, the share of the elderly population at risk of poverty reached 44.6 percent (an increase of 3.7 percentage points since 2019). Among the population aged 50-64, the share of people at risk of poverty reached 24 percent last year (up 2 percentage points since 2019). The risk of poverty increased at a significantly slower pace among the population aged 25-49 and children aged up to 17 (up 1.1 percentage points since 2019). In 2020, 14.7 percent of the population aged 25-49 and 16.9 percent of children aged up to 17 were at risk of poverty.
Pensioners (50.9%) and the unemployed (46.8%) were most at risk of poverty. The share of people at risk of poverty was the lowest among the working population - around one-tenth, which is still a large share given that these are people who work and receive a salary.
If there were no benefits and pensions, 40% would be poor
Social transfers play an important role in reducing the risk of poverty, and include both targeted state and municipal support (benefits) and pensions, which are based on people's lifetime social tax contributions. In 2020, social benefits reduced the share of the population at risk of poverty by 17.1 percentage points. In the absence of social benefits, without state and municipal support, including old-age pensions, 40.5 percent of the population would be at risk of poverty.
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