Germany is considered a wealthy country. However, people still suffer from poverty. At what income does one fall below the poverty line in Germany?
Poverty in Germany: What do you think of when you think of poverty? Worn-out clothes, cheap food from discounters, switched off electricity, or patched gloves? Admittedly, these are often well-worn clichés that probably only apply in films. But since these thoughts have little to do with reality, the question arises: What does poverty mean in Germany? At what income is one officially considered poor? Below is a look at what salary you should earn at least in order not to be classified as poor.
When are you considered poor in Germany?
In rich industrialized countries like Germany, poverty is usually surveyed in relative terms.
▶︎ That means: It primarily depends on how you stand with your income on the nationwide average. In Germany, people who have far less than 60 percent of the average net household wealth every month are considered to be severely poor. This threshold is also officially referred to by economists as the so-called poverty risk threshold or poverty risk threshold.
According to Statista, around 16.1 percent of Germans were affected by poverty in 2020 – i.e. more than 13 million people. Below is a look at the at-risk-of-poverty rate in Germany by federal state in 2020¹
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In Bremen, the at-risk-of-poverty rate was 28.4 percent in 2020. This means that 28.4 percent of the people in Bremen were affected by relative income poverty. The lowest risk of poverty was in the southern federal states of Bavaria (11.6 percent) and Baden-Württemberg (13 percent). In 2020, the at-risk-of-poverty rate in Germany was 16.1 percent. A higher at-risk-of-poverty rate is found among children and people with a migration background.
How is the risk of poverty measured?
The at-risk-of-poverty rate is an indicator of relative income poverty, according to the source, and is defined as the proportion of people with an equivalised income of less than 60 percent of the federal median equivalised income of the population in private households. The equivalised income is a needs-adjusted per capita income per household member calculated on the basis of the net household income. It is used to make the incomes of households of different sizes comparable and results from the sum of the incomes of all household members, which is then divided by a value that is usually determined using the “new OECD equivalence scale”.
In addition to the definition of relative poverty, there is also the concept of absolute poverty. This defines the condition that a person has so little money that his survival is immediately threatened. The World Bank defines a person as extremely poor if they live on less than US$1.90 per day because this amount is considered worldwide to be the financial minimum that a person needs to survive.
What is the poverty line?
We now know that the monthly net income determines whether one is considered poor or rich. The poverty line varies from household type to household type. The Federal Statistical Office distinguishes between single households, couple households with and without children, and single parents.
If you earn less than the monthly amounts below, you are considered poor in Germany, at least on paper:
|•||Singles: 1,074 euros|
|•||Single parents, one child under the age of 14: 1,396 euros|
|•||Couple without children: 1,611 euros|
|•||Single parents, two children under the age of 14: 1,718 euros|
|•||Couple, two children under the age of 14: 2,255 euros|
|•||Couple, two children from 14 years: 2,685 euros|
|•||Couple, two children under the age of 14 and one child from the age of 14: 3,007 euros|
More and more pensioners are affected by poverty in old age
Although most people have earned well all their lives, more and more pensioners are affected by poverty in old age. According to the Federal Ministry of Social Affairs, around every fifth pension in Germany is less than 500 euros. That’s just hard to live with. It is therefore hardly surprising that more than 564,000 people in Germany had to claim basic security at the end of 2020. It is often women who can hardly live on their meager pension.
Anyone who gets a small pension is not necessarily considered poor in Germany, at least on paper. Because even for pensioners, the poverty risk limit is based on the average income of the entire population. In this case, it is also crucial whether they live alone or with a partner.
▶︎ According to the OECD definition, a single pensioner is considered poor if her/his pension is less than 1,126 euros (net) per month. On paper, two-person households are affected by poverty if they earn a net monthly pension of 1,499 euros.