The Policy Agenda published the subsistence minimum values in 2016 and 2017 as well, on the basis of the commission of Friedrich Ebert Stiftung and the Hungarian Trade Union Confederation. This task was performed by the Central Statistics Office, starting from the change of regime until 2015, and it is considered as an important social indicator that gives feedback on the social processes every year.
Minimum subsistence 2017
The amount of subsistence minimum shows the income that a household requires in order to constantly provide its members the needs of a modest standard of living – that is conventionally appropriate at the society’s specific level of development. Therefore, the subsistence minimum we have shown, is not a poverty threshold, but an income that allows the satisfaction of needs beyond the basic needs as well. That is, if any unexpected expense is required, either the replacement of a small household appliance or a temporary loss of income due to illness, the household has no coverage for this.
In 2017, based on the previous CSO methodology and the household statistical data collected by the CSO, the amount of subsistence minimum per individual was: 90 450 HUF. In the case of households with two earning adults raising two children, it was: 262 305 HUF.
Based on this, in Hungary in 2017, 25% of households were living off on an income that was not reaching the subsistence minimum level. These households are larger in number, than those living above the subsistence minimum level, so 30% of the Hungarian society lives in households that do not have the income to cover the subsistence minimum level.
Social minimum 2017
At the presentation of the subsistence minimum level in 2017, we also indicated that an old/new measure is needed to define the social minimum.
The definition of social minimum is based on the methodology developed by the Policy Agenda, based on the same definition that was developed in 1990/1991 by the parliamentary subcommittee dealing with minimum subsistence. On this basis, the social minimum expresses the following:
“it means a modest consumption level, in addition to satisfying the basic needs, and besides rational management, it also provides the opportunity to consume goods and services that have already become a mass demand at a certain level of economic, social and cultural development. This minimum, in extraordinary cases, also provides some possibility for realignment and reserve.”
The Policy Agenda, based on the subsistence minimum calculation, publishes this value in 2018 for the first time (regarding years 2017, 2016, and 2015). Using the statistics database of households’ budgets (containing detailed data on expenditures and revenues), we determine the amount of minimum subsistence for different households in the examined year. Next, we determine which of households living above the minimum subsistence can save from their income, acquired in the given month.
In order to avoid the distortion of the disproportionate sample, it is also a condition that the saving ability of the household may not be unrealistically large or small. For this reason, out of the households that have savings and live above the minimum subsistence, we ignored 5% of those households, that admitted the lowest and highest savings.
On this basis, in 2017, the value of social minimum for a one-person household was: 117 720 HUF. Based on the known methodology of minimum subsistence calculation, the social minimum value of different types of households can be determined. Based on this, for an active-age household with two adults and two children, the value of social minimum is: 341 388 HUF.
In this basis, in 2017, in regards of the Hungarian households: 48% belonged to those who live below the subsistence minimum, based on this it can be calculated that 53% of the population lives in a household, that does not have an income that reaches the subsistence minimum.
Regional and settlement type differences
With regards to the definition of subsistence minimum and social minimum, it is an interesting data, how many people live below the social threshold, in the aspects of regions and settlement types. Based on the income relation of the households, there is a significant difference in the location of the specific household. In case of subsistence minimum 40% of those living in towns live below this level, while in the capital, proportionally 25 percentage point less than that of the previous. The same difference can be found in the social minimum.
Regionally, too, significant differences can be found:
Based on the structure of the Hungarian society, it looks as follows:
The minimum subsistence calculation was made using the anonymized data of the Central Statistics Office’s Household Budget and Life Circumstances Data Collection log of year 2017. The calculations and conclusions drawn from them are the exclusive intellectual products of Policy Agenda as author.
Further methodological information may be requested: email@example.com.
The research was performed with the support of the Friedrich Ebert Stiftung and the Hungarian Trade Union Confederation.