Almost half of the Portuguese population would be at risk of poverty if it wasn’t for Social Security payments.
According to the National Statistics Institute (INE), in its report on income and living conditions, which was published recently, in 2009 43.4% of the population, a considerable chunk in the middle class, was suffering extreme financial hardships.
And 2010 (still under analysis) is likely to be even worse, says the INE, because of austerity measures which have led to profound cuts in social welfare help.
According to the document, the resident population at risk of poverty, in other words, with an annual income of €5,207 euros or less, stood at 17.9%, the same registered in 2008.
However, if the analysis excludes social security and unemployment payments, pensions, sickness benefits and social insertion payments, the figures shoot up from 41.5% in 2008 to 43.4% in 2009.
“These statistics reveal a greater efficiency in social payments during this period of crisis. In other words, without them, the poverty level would have risen considerably,” says Carlos Rodrigues Farinha, an author on various inequality studies in Portugal.
The specialist noted that, on the one hand, “unemployment began to get worse in 2009 with aggravating consequences on levels of poverty, but, on the other hand, there had been real salary increases in real terms for practically all of the population that managed to stay in work.”
However, the scenario is likely to be a lot worse in 2010, not only because the poverty rate will reflect increased unemployment – predictions for 2011 show that an extra 100,000 will end up on the dole – but also because of cuts adopted to different social benefits.
Examples: the length of time unemployment benefit is paid has been shortened, 163,000 will lose their social insertion income in the first six months of 2010, while family and child support reached 600,000 fewer families between May 2010 and May 2011.
The fears are that the situation could deteriorate to levels last seen in the early 1990s when the poverty rate (after social security payments) soared to 23% of the population.
The percentage of individuals in 2009 suffering from material deprivation rose one point from 21.5% to 22.5%.