Understanding extreme poverty in the European Union

The European Union headline measure of poverty is the at-risk-of poverty measure derived from the percentage of the population in households with incomes less than 60 per cent of the median. This measure has been incorporated into the EU 2020 poverty and social exclusion target. In this paper some criticisms are made of this approach, in particular that it underestimates poverty in the newer member states. Some possible additional, less relative, more extreme measures of poverty were reviewed for a project commissioned by the EU. Two approaches, one based on deprivation and the other based on low income and deprivation were found to have merit. The results are explored using the secondary analysis of EU Statistics on Income and Living Conditions (SILC) 2008. However, some groups in extreme poverty are still likely to be excluded from SILC, including homeless people.