The poverty rate has declined on average since 1977. “The reason for this is that the labor force participation rate has increased. The best solution is to work on doing something about poverty.
Another group that sometimes falls below the poverty line are the self-employed who have had a bad year. “They can live on their reserves, but they are put into poverty in a bad year because of declining incomes. Even after that, people who are at risk of poverty are the main beneficiaries,” said Van Mulligan. Of the population in benefits, less than three-quarters are not below the poverty line.
In the past, many retirees were below the poverty line, but that has changed. “Previously you were below the poverty line with AOW,” says Van Mulligan. In the 1990s, AOO pensioners were a quarter of the population living below the poverty line. State pensions have been increased since 2000.
“As a result, there are almost no retirees below the poverty line. People below the poverty line have not fully developed their AOW rights, for example because they lived abroad. If you do not have a supplementary pension, there is a good chance you will be below the poverty line,” said Van Mulligan.
The purchasing power of retirees has increased over the decades, but has actually declined over the past ten years.
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