1. A Minimum Essential Budget for a Decent Living – 2016 A research study focusing on three low-income household categories
Suzanne Piscopo Leonid McKay André Bonello

2. | A Minimum Essential Budget for a Decent Living |
Our vision and aim…
“All persons should have the means to be able to manage their daily life with an adequate income for food, clothing, housing, healthcare, education, mobility and social participation, not only for their own wellbeing, but also that of their family.”
( Leonid McKay, Caritas Director)
AIM: To establish the minimum budget required for low- income families to be able to achieve an acceptable and a decent standard of living

3. | A Minimum Essential Budget for a Decent Living |
What inspired us…

4. Objectives of the study
| A Minimum Essential Budget for a Decent Living |
Objectives of the study
To revise the minimum essential components of a basket of basic goods and services to achieve a decent standard of living in Malta as laid out in the 2012 MBDL study
2. To calculate the minimum essential budget for three
low-income household categories in Malta based on
this basket

5. | A Minimum Essential Budget for a Decent Living |
How we did it…

6. Three Low-Income Families
| A Minimum Essential Budget for a Decent Living |
Three Low-Income Families
Two adults
and two
dependent
children
Lone
parent
and two
dependent
children
An elderly
couple
(65+)

7. Assumptions Benefits Participants in FEAD scheme Pink Card holders
| A Minimum Essential Budget for a Decent Living |
Assumptions
Benefits
Participants in FEAD scheme
Pink Card holders
Reside in Social Housing
Receive Energy (electricity/LPG) and Water benefits/rebate

8. Assumptions Everyday living
| A Minimum Essential Budget for a Decent Living |
Assumptions
Everyday living
Are in good health and free from any major debilitating health problem
Use free Public Health Services
Participate in free leisure, cultural and lifelong learning activities
Use public transport
Children attend State schools and use free school transport

10. Not included in basic basket

11. How the basket was chosen
| A Minimum Essential Budget for a Decent Living |
How the basket was chosen
A more normative rather than consensual approach
How a basic minimum standard of living ‘should be’ in preference to ‘what is’
Health and ecologically- sensitive
Consultation with:
Local professionals and experts
People who interact with the families of interest
Low-income earners

12. Costing the basket November 2015 market prices
| A Minimum Essential Budget for a Decent Living |
Costing the basket
November 2015 market prices
For example:
Food from supermarkets
Medicines from pharmacies
Footwear, uniforms, stationery regular outlets
Water and electricity prices using the ARMS online costing tool
Some Items were costed using the average consumer expenditure of the lowest income quartile of the Household Budgetary Survey and making an allowance for inflation between 2011 and 2015

13. Limitations of the study
| A Minimum Essential Budget for a Decent Living |
Limitations of the study
Not every individual’s and family’s needs are identical
Focuses only on three household types
Focuses only on low-income earners eligible for multiple state benefits
Does not consider:
Costs related to special dietary requirements, disability, mental health conditions and chronic illnesses
Specific needs of ethnic groups
Daily or extraordinary expenses of inhabitants of Gozo
Was not able to determine number of households earning less than the MEBDL due to lack of available data

14. | A Minimum Essential Budget for a Decent Living |
What we found out…

15. The 3 Minimum Essential Budgets
| A Minimum Essential Budget for a Decent Living |
The 3 Minimum Essential Budgets
Minimum Essential Budget for a Decent Living
(MEBDL)
TOTAL per year €
11,446
9,197
6,527

16. 1 ADULT & 2 CHILDREN € per year
| A Minimum Essential Budget for a Decent Living |
Cost by category
2 ADULTS & CHILDREN
€ per year
1 ADULT & CHILDREN € per year
ELDERLY COUPLE
FOOD
6,211
4,604
2,945
CLOTHING
776
641
478
PERSONAL CARE
760
693
616
HEALTH
236
164
185
HOUSEHOLD GOODS, LAUNDRY & CARE, SERVICES
2,078
1,878
1,914
EDUCATION
445
TRANSPORT
744
576
192
HOUSING
197
TOTAL MEBDL
11,446
9,197
6,527

17. Top 5 categories as % of total basket
| A Minimum Essential Budget for a Decent Living |
Top 5 categories as % of total basket
2 ADULTS & CHILDREN %
1 ADULT & CHILDREN
ELDERLY COUPLE
FOOD 54 50 45
CLOTHING 7
PERSONAL CARE 8 9
HOUSEHOLD GOODS, LAUNDRY & CARE, SERVICES 18 20 29
TRANSPORT 6 3

18. Food as % of total basket
| A Minimum Essential Budget for a Decent Living |
Food as % of total basket
Food has the highest share within the cost of the total basket at 45% to 54%
The weekly cost for food was computed as:
2 adults and 2 children = € (vs. € in 2011)
1 adult and 2 children = € (vs. €80.44 in 2011)
Elderly couple (65+) = € (vs. €50.28 in 2011)
Since 2011 (when the MBDL 1 was calculated), there has been a 16% inflation in food.
The FEAD scheme foods helped to offset some of the increased cost.

19. Augmented MEBDL SUBSTITUTE PRIVATE RENTED DWELLING
| A Minimum Essential Budget for a Decent Living |
Augmented MEBDL
SUBSTITUTE A PRIVATE CAR
SUBSTITUTE PRIVATE RENTED DWELLING
SUBSTITUTE/ADD EATING OUT

20. Augmented MEBDL – Use of private car
| A Minimum Essential Budget for a Decent Living |
Augmented MEBDL – Use of private car
2 ADULTS & CHILDREN
€ per year
1 ADULT & CHILDREN € per year
ELDERLY COUPLE
MEBDL
11,446
9,197
6,527
aMEBDL: SUBSTITUTING USE OF PRIVATE CAR
11,686
9,605
7,319

21. Augmented MEBDL – Private rental (unsubsidised)
| A Minimum Essential Budget for a Decent Living |
Augmented MEBDL – Private rental (unsubsidised)
2 ADULTS & CHILDREN
€ per year
1 ADULT & CHILDREN € per year
ELDERLY COUPLE
MEBDL
11,446
9,197
6,527
aMEBDL: SUBSTITUTING PRIVATE RENTAL (unsubsidised)
14,849
12,600
9,930

22. Augmented MEBDL – Eating out once/month within 7-day menu
| A Minimum Essential Budget for a Decent Living |
Augmented MEBDL – Eating out once/month within 7-day menu
2 ADULTS & CHILDREN
€ per year
1 ADULT & CHILDREN € per year
ELDERLY COUPLE
MEBDL
11,446
9,197
6,527
aMEBDL: INCLUDING EATING OUT ONCE A MONTH
11,609
9,305
6,619

23. Augmented MEBDL – Café, snack visits added to 7-day menu
| A Minimum Essential Budget for a Decent Living |
Augmented MEBDL – Café, snack visits added to 7-day menu
2 ADULTS & CHILDREN
€ per year
1 ADULT & CHILDREN € per year
ELDERLY COUPLE
MEBDL
11,446
9,197
6,527
aMEBDL: ADDING CAFÉ, SNACK VISITS TO 7-DAY MENU
11,966
9,587
6,787

24. 1 ADULT & 2 CHILDREN € per year
| A Minimum Essential Budget for a Decent Living |
Augmented MEBDL
2 ADULTS & CHILDREN
€ per year
1 ADULT & CHILDREN € per year
ELDERLY COUPLE
aMEBDL (1)
15,252
13,116
10,814
aMEBDL (2)
15,609
13,398
10,982
MEBDL
11,446
9,197
6,527
aMEBDL (1)
Eating out once a month within 7-day menu + Private car
+ Private rental (unsubsidised)
aMEBDL (2)
Eating out added to 7-day menu – café, snack visits + Private car
+ Private rental (unsubsidised)

25. Why we think it’s important…
| A Minimum Essential Budget for a Decent Living |
Why we think it’s important…

26. MEBDL and different income scenarios
| A Minimum Essential Budget for a Decent Living |
MEBDL and different income scenarios
MEBDL Yearly
Budget €
One NMW*+ In-Work Benefit + other Allowances/ Benefits
One NMW*+
Tapering of
Benefits + other
Allowances/ Benefits
Social / Unemployment Assistance + other Allowances/ Benefits
Widow’s Pension + other Allowances/ Benefits
2 ADULTS &
2 CHILDREN
11,446
9,353
13,525
7,463 /
1 ADULT &
9,197
11,650
13,249
6,965
10,404
*National Minimum Wage

27. MEBDL and different income scenarios
| A Minimum Essential Budget for a Decent Living |
MEBDL and different income scenarios
MEBDL Yearly
Budget €
One Guaranteed
Minimum Pension
+ other Allowances/ Benefits
Two Guaranteed
Minimum Pensions + other
Allowances/ Benefits
ELDERLY COUPLE (65+)
6,527
8,807
16,222

28. MEBDL vs. At-Risk-of-Poverty Thresholds
| A Minimum Essential Budget for a Decent Living |
MEBDL vs. At-Risk-of-Poverty Thresholds
MEBDL
Yearly Budget €
60% Median NEI (SILC 2014)
2 ADULTS &
2 CHILDREN
11,446
19,531
1 ADULT &
9,197
(not available)
ELDERLY COUPLE (65+)
6,527
11,508

29. | A Minimum Essential Budget for a Decent Living |
Minimum Budgets: 2012 vs. 2016
Minimum Essential Budget for a Decent Living
(MEBDL) €
2012
10,634
8,581
6,328
2016
11,446
9,197
6,527

30. MEBDL 2016 vs. MBDL 2012 INCREASES All 3 household types
| A Minimum Essential Budget for a Decent Living |
MEBDL 2016 vs. MBDL 2012
INCREASES All 3 household types
Food: e.g. fresh vegetables and fruits, fish, nuts
Printing and stationery
Housing
Households with children
Transport
DECREASES All 3 household types
Electricity, water, LPG
Footwear
Households with children
Uniforms
Elderly couple
Medicines*
Transport
* Partially due to removal of
osteoporosis supplements from basket

31. Where we think it should go from here…
| A Minimum Essential Budget for a Decent Living |
Where we think it should go from here…

32. | A Minimum Essential Budget for a Decent Living |
Quick reminder
The three Minimum Essential Budgets are a minimum benchmark (the lowest acceptable), not a Reference Budget.
Most families incur additional expenses arising from e.g.:
special diets
private health care
use of private car
commercial rents
expenses related to having infants and young children
expenses related to keeping mobile and safe in the older years
extraordinary expenses incurred if one resides in Gozo

33. Recommendations for policy
| A Minimum Essential Budget for a Decent Living |
Recommendations for policy
1. Adopt the three minimum essential budgets as benchmarks to guide social security policies to determine adequacy of minimum income for specific households.
2. Give further consideration to the particular circumstances of those who legitimately cannot work.
3. Uplift the statutory minimum wage slightly, but annually, for a period of 3 years (in addition to the COLA).

34. Recommendations for policy
| A Minimum Essential Budget for a Decent Living |
Recommendations for policy
4. Address the financial situation of low-income earners who are renting private dwellings and not benefitting from any subsidies. 5. Develop further assistance, structures and incentives for facilitating access to healthier, fresh food by low- income households, and accompany this by practical nutrition education.

35. Recommendations for policy
| A Minimum Essential Budget for a Decent Living |
Recommendations for policy
6. Ensure that entitlement to free medication through the public health system is reviewed regularly.
7. Extend free or subsidised provision for facilitating independent living, healthy ageing and lifelong learning for the elderly who have a low income or who face unexpected long-term financial burdens.

36. Recommendations for policy
| A Minimum Essential Budget for a Decent Living |
Recommendations for policy
8. Strengthen long-term investment in community education and participatory initiatives promoting sustainable consumption lifestyles for Maltese and Gozitan families, and prevention of health problems and skills for self care for the elderly.
9. Ensure that entitlement to Education for Sustainable Development and related subjects, such as Home Economics, are implemented from the Early Years.

37. Recommendations for policy
| A Minimum Essential Budget for a Decent Living |
Recommendations for policy
10. Establish assistance, structures and incentives to support social innovation initiatives which aim to reduce poverty and improve social inclusion.

38. Recommendations for research
| A Minimum Essential Budget for a Decent Living |
Recommendations for research
1. Conduct studies to establish a standard definition of 'adequacy' when it comes to determining the minimum level of income Maltese and Gozitan people need to live in dignity.
2. Compare and contrast the Minimum Essential Budgets with the actual consumption patterns of the three household types in Malta and Gozo.

39. Recommendations for research
| A Minimum Essential Budget for a Decent Living |
Recommendations for research
3. Compare the weightings of each component of the MEBDL basket with weightings of categories based on a) an actual survey on consumption/expenditure among the target populations;
b) the latest HBS results for the low income quartiles; c) the latest HBS results for all income quartiles.

40. Recommendations for research
| A Minimum Essential Budget for a Decent Living |
Recommendations for research
4. Consider introducing a rolling HBS to capture new products and services on the market, so that the weights of different components are adjusted regularly. 5. Set up a National Research Institute on Poverty to further local research on poverty.

41. | A Minimum Essential Budget for a Decent Living |
In conclusion…

42. | A Minimum Essential Budget for a Decent Living |
Our call to action
The established minimum essential baskets and budgets are powerful tools.
They offer opportunities to compare, improve and deepen analysis of poverty.
They can help further pave the way to ensure sustainable lifestyles and human dignity for ALL!

43. Thank You! Question time...