Poverty rises in the Netherlands for first time in five years

More than half a million people in the Netherlands were living in poverty last year, marking the first increase in poverty rates after five years of decline, according to new figures released Wednesday by the country's statistics institution.

Statistics Netherlands (CBS) said the rise follows several years of declining poverty and is largely linked to the discontinuation of the energy allowance, a temporary support measure introduced during the energy crisis.

Under a new poverty definition developed jointly by CBS, the National Institute for Family Finance Information, and the Social and Cultural Planning Office, people are considered poor if they have insufficient income left for other basic needs after covering major fixed expenses such as housing, energy, and healthcare.

The revised calculation method, introduced at the end of last year, initially showed a drop in poverty levels in 2023.

However, CBS said the removal of the energy allowance led to a renewed increase last year, with more than 130,000 people already living in poverty for at least three consecutive years.

In previous years, poverty had declined partly due to the energy allowance, increases in the minimum wage in 2023, and relatively low rents for nearly 600,000 households. Temporary support measures during the coronavirus pandemic also helped reduce poverty levels.

Working people most affected

CBS data shows that working people now make up the largest group living in poverty. Of those affected, 48 percent had income from work, while 29 percent relied on social assistance.

“There are also a great many working people,” said Peter Hein van Mulligen, chief economist at CBS.

He noted that the working poor often include self-employed people who have had a difficult year, as well as employees working too few hours to earn above the poverty line.

The statistics agency also highlighted significant health disparities. Nearly four in 10 people living in poverty rate their health as poor, and long-term illness is more common among low-income groups.

Life expectancy is also shorter, by nine years for men and seven years for women, compared to the general population.

Looking ahead, the Netherlands Bureau for Economic Policy Analysis expects poverty to fall to below three percent in 2025 and 2026, although Van Mulligen cautioned that projections remain uncertain and depend largely on developments in the labour market, which remains tight.