Poverty has decreased on average since 1977. Van Mulligen says, “This is because the rate of work participation has increased. Work is the best remedy to do something about poverty. Those who work and are still below the poverty line, work too little and too often unstable contracts.
Another group that sometimes falls below the poverty line are entrepreneurs who have had a bad year. “They can live on their reserves, but because of the low income, they are included in poverty in such a bad year. The people who are still at risk of poverty afterwards are basically welfare people,” says van Mulligen. Among people receiving benefits, at least three-quarters of people are below the poverty line.
In the past, many retirees were also below the poverty line, but this has changed. “I was previously below the poverty line with AOW,” says Van Mulligen. In the 1990s, AOW retirees made up a quarter of people living below the poverty line. The state pension has been increased since 2000.
“As a result, there were almost no pensioners below the poverty line. Those who were below the poverty line did not fully build up their AOW rights, for example because they lived abroad. If you do not have supplemental pensions, there is a good chance that you are under poverty line,” says Van Mulligen.
The purchasing power of retirees has increased over the decades, but has actually declined over the past ten years.