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European Union Survey on Income and Living Conditions

An Annual Survey of the Nation focusing on Income and Social Conditions

EU SILC is a survey that the Central Statistics Office (CSO) has undertaken every year since 2004 and it focusses on particular on income and living conditions. It’s part of an EU-wide programme which allows policymakers to make comparisons across member states.

The SILC survey is a voluntary survey carried out every year under Section 24 of the Statistics Act, 1993 and EU Council Regulation No 1177/2003. It is the official source of data on household and equivalised disposable income in Ireland. It also gives us a number of key national poverty indicators, including the ‘at risk of poverty’ rate, the ‘consistent poverty rate’ and ‘rates of enforced deprivation’.

Equivalised income

The ‘equivalised’ disposable income is the total disposable income of each household divided by the equivalised household size using the National or OECD equivalence scale depending on where the data will be used. It helps us to calculate the at risk of poverty rate.

Here’s an example of how we do it:

Suppose there is a household of two adults and two children under the age of 14 and with a household income of €50,000 after tax.

In this example we will use the OECD equivalence scale to calculate the equivalised household size:

  • 1.0 to the first adult
  • 0.66 to the second and each subsequent person aged 14 and over
  • 0.33 to each child less than 14 years old

In our example the equivalised size of this household is (1.0 + 0.66 + 0.33 + 0.33) = 2.32

The equivalised Income for the household is €50,000/2.32 = €21,551.72

At risk of poverty rate

The at risk of poverty rate is the share of persons with an equivalised income below a given percentage (usually 60%) of the national median income. The rate is calculated by ranking persons by equivalised income from smallest to largest and then extracting the median (middle) value. Anyone with an equivalised income of less than 60% of the national median is considered to be at risk of poverty.

Here’s an example of how to calculate this:

Suppose there are eight individuals with the following equivalised incomes:

Individual

Equivalised Income

1

€21,482

2

€16,872

3

€17,984

4

€33,458

5

€43,200

6

€14,542

7

€28,124

8

€27,182

First, we rank them from smallest to largest:

Individual

Equivalised Income

6

€14,542

2

€16,872

3

€17,984

1

€21,482

8

€27,182

7

€28,124

4

€33,458

5

€43,200

Next, we calculate the median:
(€21,482 + €27,182)/2 = €24,332

Now we can calculate at risk of poverty rate at 60%:
60% of €24,332 = €14,599.20

So, in our example, one individual (Individual No. 6) is at risk of poverty at the 60% level.

In Ireland in 2016, the nominal median annual equivalised disposable income was €20,597 and the nominal 'at risk of poverty' threshold stood at €12,358. In 2016, 16.5% of individuals were ‘at risk of poverty’ compared with 16.9% in 2015.

Deprivation rate

This measures the households that are considered to be marginalised or deprived because they cannot afford goods and services which are considered to be the norm for other people in society. The identification of these households is based on a set of 11 basic deprivation indicators:

• Two pairs of strong shoes
• A warm waterproof overcoat
• New (not second-hand) clothes
• A meal with meat, chicken, fish (or vegetarian equivalent) every second day
• A roast joint or its equivalent once a week
• Home heating during the last year
• Fuel to keep the home adequately warm
• Presents for family or friends at least once a year
• Replacement for worn out furniture
• Drinks or a meal for family or friends once a month
• A morning, afternoon or evening of entertainment once a fortnight

Enforced deprivation is defined as not being able to afford to buy two or more of these 11 basic deprivation indicators. In 2016, we identified that enforced deprivation was experienced by 21.0% of the Irish population.

Consistent poverty

The consistent poverty measure counts those who are at risk of poverty and who are experiencing enforced deprivation (two or more types of deprivation from the above list).

An individual is defined as being in ‘consistent poverty’ if they are:
• At risk of poverty according to the definition above and
• Are living in a household deprived of two or more of the eleven basic items listed above

The consistent poverty rate in 2016 was 4.7% in Ireland.

Who uses these results?

SILC is really important because it tells us how many people and households are at risk of poverty. This helps local, national and European policy makers when making decisions on social inclusion, education, health, employment and other areas of concern.

In particular, the survey helps to monitor progress in the fight against poverty. Specialist research bodies, such as the Economic and Social Research Institute  and Social Justice Ireland can see what’s happening and make proposals for policy improvements.

Eurostat, the statistical arm of the European Commission, will also use the results to compare living conditions throughout the European Union which will guide policymakers in the EU as regards to areas they will need to target.