RIGA - The reform of the minimum income support system in Latvia in 2024 will result in the lowest level of material deprivation in the last ten years, but inequality between household groups has increased between 2021 and 2023, according to the information report of the Welfare Ministry on the implementation of the plan to improve the minimum income support system for 2022-2024.
The report shows that in 2015, the share of the deeply materially and socially deprived population was 15.4 percent, while in 2024 it has decreased to 5.3 percent. At the same time, the number of large families with incomes below the minimum income level increased by 5.3 percentage points between 2021 and 2023, reaching 13.4 percent in 2023.
The data also show that in 2023, 15.9 percent of single-parent families and 15.1 percent of men living alone were below the minimum income level.
By contrast, the lowest share of households with incomes below the minimum income level in 2023 is in families with one or two children.
The Welfare Ministry explained that the incomes of large families have grown more slowly than those of other households over the same period, and that income from paid employment has fallen, while the share of self-employment has risen significantly. As a result, some families continue to live at or below the minimum income threshold. Compared to 2019, the situation has improved for children, single-parent families and people of retirement age, but it has worsened for large families.
The share of the population with minimum income has decreased by 0.3 percentage points since the reform was introduced and reached 7.6 percent in 2024. The last time the ratio was lower was in 2015, when it was 7.4 percent.
By region, the most positive changes between 2021 and 2023 are observed in Latgale, where the share of people with minimum incomes has decreased by three percentage points, from 14.2 percent to 11.2 percent. In Riga, it decreased by 0.1 percentage point, in the Pieriga region by 1.3 percentage points and in Vidzeme by 0.3 percentage points, while in Kurzeme it increased by 1.8 percentage points and in Zemgale by 1.5 percentage points. In 2023, Vidzeme had the largest share of people with minimum incomes, while Riga had the smallest share.
By age, the most positive changes over the same period were observed for the working-age population aged 25-64, where the share decreased by 0.4 to 0.5 percentage points to 6.5 percent. The highest share is in the pre-retirement age group with 10.2 percent and the lowest in the retirement age group with 6.4 percent.
By gender, the share of women with minimum incomes decreased by 0.8 percentage points between 2021 and 2023 and stood at 7 percent in 2023. The share of men increased by 0.3 percentage points over the same period to 8.4 percent.
When analyzing household types, the most favorable impact over this period was for families with one child, where the share decreased by 2.1 percentage points, and with two children, where the decrease was 1.5 percentage points. In households with two adults, the decrease was 2.1 percentage points. However, the share of large families with a minimum income increased by 5.3 percentage points and reached 13.4 percent in 2023.
The number of households receiving housing benefit in 2024 was almost 68,000, an increase of 13 percent compared to 59,854 in 2021. The average housing benefit increased by 24.7 percent during this period and amounted to EUR 103.23 per month. In 2021, the average monthly amount was EUR 82.81.
The ministry stresses that the reform entered into full force on July 1, 2023, and its full impact can only be assessed from 2026.
Funding for the reform is increasing every year: in 2023, EUU 87.5 million from the state budget and EUR 11.3 million from local governments; in 2024, EUR 105.9 million and EUR 33.4 million respectively; and in 2025, EUR 135.7 million from the state and EUR 38.9 million from local government budgets are planned.
The report concludes that the minimum income system is currently fair, socially responsible and sustainable, but that additional instruments are needed in the future to reduce the risk of poverty for broader groups of the population.
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