Vulnerable groups like single women with children, low-income tenants and the elderly are experiencing rising risks of falling into relative poverty, a study by the International Monetary Fund (IMF) has found.

In a paper released this week, the IMF found that, as the share of population suffering from material deprivation had been declining, the proportion at risk of relative poverty had been “increasing continuously”.

People classified as experiencing relative poverty are those earning less than 60 per cent of the median income. The IMF found that the poverty risk is rising among tenants, mainly low income households and their poverty risk is compounded by rapidly rising rents in an unregulated rental market.

Tenants

Minimum lease periods are being considered in the government’s proposed reform of the rental market, but rent prices will remain at landlords’ discretion.

The IMF said tenants’ struggles pointed to the need to improve housing affordability, including through social policies targeted at low-income households.

Labour market

The report said the overall earnings gap in Malta is among the highest in Europe. This largely reflects the fact that women, especially low-skilled, single mothers tended to remain outside of the labour market in Malta, the IMF said.

Acknowledging that recent economic growth and policies to promote female participation in the labour market had helped close part of the gap, further encouragement and an extension of these policies was needed to ensure that recent gains were made permanent.

Read: MFSA will centralise supervision, despite IMF warning not to 

Pensions and benefits to elderly

Turning to the elderly, the report said pensioners’ income had failed to keep up with other incomes, relative poverty risk had increased among the elderly.

This pointed to the need to recalibrate social transfers for the elderly, the report said.

It cautioned that the fiscal implications of raising pensions or social benefits would need to be considered carefully in light of existing concerns on pension sustainability in an ageing society.

Ongoing changes in the statutory retirement age to 65 by 2027, from 61 for men and 60 for women in 2013, would be an important step to mitigate both fiscal and poverty risks in the long term, the IMF said.

Low-skilled workers

Low-skilled workers, refugees and tenants were also found by the IMF to be at risk of relative poverty.

The poverty risk was high and rising among low-skilled immigrants from outside the EU.

Among these immigrants, refugees, which represented a sizeable share in total population, were particularly vulnerable, the IMF said.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.