Minimum income and poverty indicators and targets


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Presentation by Prof. Hugh Frazer, Expert, National University of Ireland on the occasion of the EESC hearing on European minimum income and poverty indicators (Brussels, 28 May 2013)

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Minimum income and poverty indicators and targets

  1. 1. European Economic and Social CommitteePublic Hearing - 28 May 2013Minimum Income and PovertyIndicators and TargetsHugh FrazerNational University of Ireland (Maynooth)EU Network of Independent Experts on Social Inclusion
  2. 2. EU Network of Independent Expertson Social Inclusion• About Network– Advise Commission on Social Inclusion Policies– 27 Member States + 7 non EU countries• 2 Reports– Minimum income schemes across EU Member States(2009)– Assessment of the Implementation of the EuropeanRecommendation on Active Inclusion (2013)•Available at:
  3. 3. Overview - 1Typology of MIS• relatively simple with fairly comprehensive coverage(AT, BE, CY, CZ, DE, DK, FI, LU, NL, PT, RO, SI, SE)• simple and non categorical but restricted eligibilityand limited coverage (EE, HU, LT, LV, PL, SK)• complex but quite extensive coverage (ES, FR, IE,MT, UK)• very limited, partial or piecemeal with minimalcoverage (BG, EL, IT)
  4. 4. Overview - 2• Eligibility conditions vary significantly across countries (age, nationality, residence,lack of financial resources and willingness to work)• Often linked to other assistance– e.g. housing costs, fuel costs, benefits in relation to children and school costs, additionalfinancial assistance for those with special dietary needs• Increased links with employment supports and activation measures– insertion contracts increasingly common– arrangements to ease the transition into work by tapering out benefits and/or toppingup benefits to lift people out of working poverty• Growing impact of the financial and economic crisis– unemployment increasing numbers seeking support– financial strains on national budgets– undermining linkage with measures to encourage return to work– uprating of benefits being curtailed.
  5. 5. Key issue - 1• Levels inadequate to lead a life of dignity– not lift most out of poverty (but some get nearer thanothers)– very important role in reducing the intensity of poverty– over time not kept up with increase in wages• lack of clear systems and procedures for uprating• lack clear rationale for establishing the level of MISs• inconsistencies in amounts paid to different categories
  6. 6. Key issue -2• Non take-up a major problem• complexity/lack of information/difficulty of applying• not worth time and effort• discretionary nature of benefits;• fear of being stigmatised;• poor administration;• lack of supportive social workers
  7. 7. Key issue - 3• Inadequate coverage and restricted eligibility– trend to tighten conditions– homeless people, undocumented migrants,refugees and asylum seekers often not covered
  8. 8. Key issue - 4• Preoccupation with disincentives to take-up work– prioritised over ensuring adequacy– specific disincentives include:• high benefit withdrawal rates• the lack of a systematic process for monitoring and redressing theerosion over time in the value of the earnings disregards andincome eligibility thresholds that are attached to the various socialwelfare payments and govern peoples eligibility for secondarybenefits;• vulnerability to debt and low self-esteem can affect motivation• the absence of taper adjustment regarding additional earnedincome• additional expenditure involved in employment, such as transport,eating out, child care etc.
  9. 9. Key issue - 5• Inadequate linkages with other two strands ofactive inclusion– more evident (and increasing) in relation to activatingmeasures than enabling services– need for better targeting of those in the most difficultsituations– need for better tailoring to meet individual needs– lack of data on and evaluation of the effectiveness ofmeasures
  10. 10. Limited progress since 2009• Limited impact of Active Inclusion Recommendation– Few (7) MS develop integrated comprehensive AIstrategies• Imbalanced approach– more on inclusive labour market (esp. activation) than adequateincome support & access to quality services• Lack of integrated design and delivery– little attention to mutually reinforcing effects• Weak implementation– only 6 MS (3 for those who cannot work) developed effectivesystems for integrated implementation
  11. 11. Limited progress since 2009• Failure to deliver on adequate income– Only 7 MS (6 for those who cannot work)improved income support since 2008 & 13 MSweakened• Increased conditionality• Failure to uprate payments so inadequacy increases• Several MS have increased links between resourcesand activation measures• More focus (positive and negative) on preservingincentive to work
  12. 12. Urgent action needed• Most Minimum Income Schemes (MIS) fall short and manyvery far short of 1992 & 2008 Recommendations• Need for action made more urgent by:– economic/financial crisis and impact of austerity measures– moves to EMU
  13. 13. What role can the EU play?• Strong political conclusion at European Council– Strong political statement on importance of adequateminimum income schemes– Ask Commission and MS to make progress on establishingstandards for development of reference budgets in all MS– Request regular monitoring and reporting on effectivenessof MI schemes• Ultimately could lead to a Framework Directive– but there is sufficient basis (SIP and Europe 2020) formaking progress on the different elements in themeantime (adequacy, accessibility, non-take up, links withservices and active labour market measures etc.)
  14. 14. Next steps - 1• EU and Member States should agree on criteria thatMIS should meet and monitor progress rigorously–agree on mechanisms for establishing what level of MI isnecessary to ensure human dignity and avoid poverty in each MSand foster national debates to build consensus• should take account of living standards, price levels, type and size ofhousehold and be adjusted or supplemented to meet specific needs• Commitment on Reference Budgets in SIP very important– European Council should now ask Commission and SPC to make progress onthis as matter of urgency–Establish standards for transparent uprating mechanisms–Ensure coverage of most vulnerable: homeless people, refugees,asylum seekers, undocumented migrants and Roma
  15. 15. Next steps - 2– Monitor non take-up and introduce strategies toimprove take up• build administrative capacity at local level to deliver– Enhance links with other 2 strands of active inclusion• MS should better target active labour market schemes on MISrecipients• MS should improve access of MIS recipients to quality services
  16. 16. Next steps - 3– CE should rigorously monitor progress by MS• build monitoring into Europe 2020 semester (AGS; NRPs, NSRs)• As appropriate make Country Specific Recommendations– Enhance exchange and learning• CE to document and disseminate good practices: e.g.– on removing disincentives while also guaranteeing adequacy– on linking MISs to active labour market measures and qualityservices including coordinated approach at local level (“one stopshops”)– on simplifying complex systems• Fully use Peer Review process
  17. 17. Indicators and targets -1• 3 EU 2020 indicators and target– Generally quite a good political and technical compromise• Has so far proved quite robust and quite challenging– Some problems with national target setting• monitoring problematic when MS use different indicators (shouldhave to indicate clearly what contribution their target will make to EUtarget)• targets set often lack ambition (total of 27 MS not reach 20 million)• policies (in NRPs) not clearly enough linked to achieving targets• need for more sub-targets (esp. children)• many MS going in wrong direction– 2015 mid term review could:• take on board new work on material deprivation (Guio, Gordon,Marlier)• consider adding child dimension to EU target• at least maintain overall target• reconsider setting proportional targets for all MS
  18. 18. Indicators and targets - 2• Need to better understand what it means in each MS tolive under at-risk-of poverty line– does 60% median lead to “decent” life?– reference budgets potentially a very important way ofestablishing this• Important to also use the broader set of social inclusionindicators developed as part of Social OMC– generally quite comprehensive on social inclusion– add child well-being indicator(s)• build on work done for Recommendation– more progress needed on health and long-term care andadequacy of pensions