Key challenges
On average, more than one fifth of the EU population lives at risk of poverty or social exclusion. In the case of children, almost one in four children suffers from poverty or social exclusion, which calls for actions to break the cycle of disadvantage for future generations.
Poverty is more likely to affect people who are in vulnerable situations, like being unemployed or working at precarious jobs, being low skilled, persons with disabilities, belonging to migrant and ethnic minority communities and being homeless. In addition, living in large families with many children and in single parent families increases the risk of poverty.
Policy framework
The third chapter of the European Pillar of Social Rights represents the key policy areas to tackle poverty and social exclusion. The main principles relevant for social inclusion are:
Principle 11 on childcare and support to children
Principle 14 on minimum income
Principle 17 on inclusion of people with disabilities
Principle 19 on housing and assistance for the homeless
Principle 20 on access to essential services
The Pillar is a joint commitment among national governments, EU institutions and key stakeholders to fight poverty and social exclusion. The Pillar Action Plan put forward a 2030 poverty target to reduce the number of people at risk of poverty or social exclusion by at least 15 million by 2030, out of which at least 5 million children. The target was endorsed at the 2021 Porto Social Summit and welcomed by the European Council.
The Pillar Action Plan also announced a number of initiatives to support the implementation of the Pillar principles. In the area of poverty and social exclusion relevant initiatives include the Council Recommendation establishing a European Child Guarantee, proposal for a Council Recommendation on minimum income, a European Platform on Combating Homelessness, an EU report on access to essential services and guidance on the use of ex ante distributional impact assessment.
The European Pillar of Social Rights and its Action Plan build on the policy objectives set out in earlier policy initiatives, such as the active inclusion approach and the Social Investment Package.
Policy monitoring
The European Semester provides the framework for coordinating and monitoring EU countries' economic and social reforms to implement the Pillar and its Action plan and reach the EU 2030 targets. Special attention is paid to the social situation and poverty trends in the EU and in individual Member States. The challenges and proposed solutions are reflected in Country-specific Recommendations.
Policy coordination
The Commission works together with EU countries through the Social Protection Committee using the Open Method of Co-ordination in the areas of social inclusion, health care and long-term care and pensions (social OMC).
Funding
The European Social Fund Plus (ESF+) as part of the Multiannual Financial Framework 2021–2027 provides funding for supporting children and young people as well as for promoting social inclusion and tackling material deprivation. At least 25% of its financing is earmarked for social inclusion. The funds under the Recovery and Resilience Facility are also made available to Member States with the aim to enhance social resilience and social cohesion.
The EU provides financial support through an annual grant to a number of EU-level organisations active in the social inclusion area to build their capacity and make their participation in EU-level processes easier (e.g. by providing views on the development of EU legislation and policies).
This is done through the Employment and Social Innovation (EaSI) strand of the European Social Fund Plus. These bodies were selected through a call for proposals and signed a Framework Partnership Agreement for the period 2022-2025. Awarded organisations are listed at the bottom of the call page.
Measuring poverty and social exclusion
In the EU, the measurement of poverty and social exclusion reflects their multidimensional nature by using the at risk of poverty or social exclusion (AROPE) indicator, which captures income poverty, severe material and social deprivation and labour market exclusion.
These three dimensions represent related but distinct concepts that can overlap as some people might be affected by two or even all three dimensions at the same time. In 2020 the share of persons at risk of poverty or social exclusion in the EU total population, which represents the share of persons affected by at least one of the three aforementioned dimensions, was close to 22%.
Amongst those, close to 30% were affected by more than one of the three dimensions of poverty and around 6% by all three forms.
At risk of poverty is the most prevalent form of poverty measurement in the EU, affecting around 17 % of the population. This means that these people have an equivalised disposable income of less than 60 % of the national median income. Income poverty (or relative poverty) is a useful measure, as it captures people who do not have enough means to enjoy the same standard of living as the majority of the society.
The other most frequent form of poverty is severe material and social deprivation, which shows an enforced lack of necessary and desirable items to lead an adequate life. More specifically, this indicator refers to people that are unable to afford seven or more items out of a list of thirteen that are considered important for an adequate life.
The items include the ability to face unexpected expenses, ability to keep home adequately warm, to afford a meal with meat, chicken, fish or vegetarian equivalent every second day. In 2020 this form of poverty affected close to 7 % of the EU population, with large variation between the Member States.
Approximately 8% of people of working age are affected by very low work intensity, which refers to people who live in households where adults work less than 20% of their total work potential.
Beyond these headline indicators, additional measurements can point to more severe nature of poverty.
The relative median poverty risk gap helps to quantify how poor the poor are. It is calculated as the difference between the median equivalised disposable income of people below the at-risk-of-poverty threshold and the at-risk-of-poverty threshold, expressed as a percentage of the at-risk-of poverty threshold. The relative median poverty risk gap ranges from around less than 20% to nearly 40% in the Member States.
The indicator of the persistent at-risk-of-poverty rate allows capturing the dynamics of poverty. The length of the poverty spell provides more information on the duration of poverty. The persistent at-risk-of-poverty rate, which affects around 11% of EU total population, is defined as the share of people who are currently poor and were poor also 2 out of the 3 previous years (thus identifying people who live with a low income for long periods of time), as opposed to people who face transitory poverty.
Several of the headline indicators of the Social Scoreboard also relate to poverty and social exclusion. Amongst these are for instance the at-risk-of-poverty or social exclusion rate (for both the total population and the children population, where the AROPE rate is to be examined on the considered population together with the indicators relating to its three dimensions), the impact of social transfers (excluding pensions) on poverty reduction or the housing cost overburden rate, together with other indicators related to social protection and inclusion.