19% of Luxembourg’s Population At Risk of Poverty in 2023, STATEC Finds

Luxembourg's national statistics portal, STATEC, has reported that the population’s at-risk-of-poverty rate reached 19% in 2023.

Despite the increase in household income and successive wage indexations, the at-risk-of-poverty rate has risen by 1.5 percentage points and will approach 19% of the population in 2023. Among those particularly at risk of poverty are children under eighteen and single-parent households.

In Luxembourg, more than 30,000 children - around one in four - are at risk of poverty. These children live in households with a standard of living of less than €2,400 per month. Between 2022 and 2023, this indicator will have risen by 1.4 points to 23.9%, a particularly high level for Luxembourg. In comparison, the at-risk-of-poverty rate is 11% for people aged 60 or over.

Almost half of single-parent households at risk of poverty

Among single-parent households, the risk of poverty exceeds 43% of the population. More generally, a quarter of members of a household with children have a standard of living below €2,400/month, compared with 12% of those living in a household without children. Conversely, it is among childless couples that poverty is lowest, with only 10% of people affected.

STATEC emphasised that the wealthiest 20% of the population have an average standard of living 4.8 times higher than that of the least well-off 20%.

This indicator has risen by 0.3 percentage points and highlights a more unequal distribution of income between individuals in Luxembourg. The Gini coefficient, which measures the extent to which the distribution of income within a country deviates from a perfectly equal distribution, is another indicator commonly used to measure the level of inequality within an income distribution, has also increased, rising from 29.1% in 2022 to 30.6% in 2023.

The inclusion of childcare service vouchers (CSA) reduces the risk of child poverty by more than 3 points, STATEC noted.To allow parents to have their children looked after by professional childcare providers, the ‘childcare service voucher’ (CSA) scheme was introduced in 2009, then reformed in 2012, 2017 and 2022. Since 2022, the hours spent by a child at a primary school in a professional childcare facility such as a halfway house, crèche, day centre or parental assistant have been free of charge during the school term, as have meals, up to a maximum of five per week. Free schooling does not apply to infants or children enrolled in primary education. Social transfers ‘in kind’ such as the CSA represent a substantial benefit for households with children, according to STATEC. Child poverty falls significantly if the CSA is treated as a monetary transfer to households: the fall exceeds 3 percentage points, with the poverty rate for people under eighteen falling to 20.3%.

All these data, together with updated figures, will be the subject of a more detailed analysis in the Work and Social Cohesion Report (TCS) which STATEC will publish in September 2024.