COMMISSION STAFF WORKING DOCUMENT Poverty in the EU - key trends and policies Accompanying the documents COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS on the European Union's Anti-Poverty Strategy: addressing and preventing poverty from childhood to old age Proposal for a COUNCIL RECOMMENDATION on fighting housing exclusion
Date: 2026-05-06
Institutions: Directorate-General for Employment, Social Affairs and Inclusion, European Commission
Subjects: EU strategy, European Social Fund, European social policy, cost of living, energy poverty, integration into employment, marginalisation, poverty, social assistance, social integration

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 6.5.2026  SWD(2026) 770 final  COMMISSION STAFF WORKING DOCUMENT Poverty in the EU - key trends and policies Accompanying the documents COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS on the European Union's Anti-Poverty Strategy: addressing and preventing poverty from childhood to old age Proposal for a COUNCIL RECOMMENDATION on fighting housing exclusion {COM(2026) 538 final} - {COM(2026) 540 final} - {SWD(2026) 771 final}  
 
 
TABLE OF CONTENTS  

Introduction ............................................................................................................................................. 3 

1. Context of the fight against poverty in the EU .................................................................................... 4 

2. Definitions and key indicators ............................................................................................................. 7 

2.1. Definitions .................................................................................................................................... 7 

2.2. Poverty diagnosis ......................................................................................................................... 9 

2.2.1. Key facts and figures ........................................................................................................... 10 

2.2.2. The territorial dimension of poverty .................................................................................... 20 

2.2.3. The impact of the increasing cost of living ......................................................................... 24 

2.2.4. Scenarios of poverty until 2030 ........................................................................................... 27 

2.2.5. Stress-testing EU Welfare Systems ..................................................................................... 29 

2.2.6. Megatrends impacting poverty ............................................................................................ 34 

3. Who faces poverty in the EU and why .............................................................................................. 39 

3.1. Children ...................................................................................................................................... 40 

3.2. Youth .......................................................................................................................................... 43 

3.3. Working-age population ............................................................................................................. 45 

3.4. Older people ............................................................................................................................... 49 

3.5. Women and single parents ......................................................................................................... 51 

3.6. Persons with disabilities ............................................................................................................. 53 

3.7. People experiencing homelessness and housing exclusion ........................................................ 54 

3.8. Third-country nationals and people with a migrant background ................................................ 55 

3.9. Persons with a minority racial or ethnic background and LGBTIQ+ people ............................. 56 

4. Policies to prevent and reduce poverty: EU response and remaining gaps ....................................... 58 

4.1. Addressing and preventing poverty in all ages and across generations...................................... 58 

4.1.1. Investing in children ............................................................................................................ 59 

4.1.2. Supporting young people to thrive ...................................................................................... 67 

4.1.3. Addressing poverty affecting people of working age .......................................................... 76 

4.1.4. Combating poverty in old-age ........................................................................................... 108 

4.2. Tackling horizontal challenges that exacerbate poverty ........................................................... 112 

4.2.1. Combating discrimination and stigma ............................................................................... 112 

4.2.2. Ensuring access to food, energy, transport and housing in a context of rising costs ......... 120 

4.2.3. Ensuring access to key services ......................................................................................... 146 

5.Supporting the implementation of the Anti-Poverty Strategy in EU Member States ....................... 164 

1 

 
 
 
 
 
5.1. Guidance ................................................................................................................................... 164 

5.1.1. Key dimensions of effective policies at national and local levels frameworks ................. 164 

5.1.2. Remaining challenges in the Member States ..................................................................... 167 

5.1.3. European Semester ............................................................................................................ 169 

5.2. EU funding ............................................................................................................................... 171 

5.3. Monitoring ................................................................................................................................ 179 

6. Combating poverty globally ............................................................................................................ 182 

Annex 1. Synopsis report – consultations on the EU Anti-Poverty Strategy ...................................... 187 

Annex 2. Synopsis report - consultations on the Commission proposal for a Council Recommendation 
on Fighting Housing Exclusion ........................................................................................................... 200 

2 

 
 
 
 
 
 
 
Introduction  
The  political  guidelines  2024-2029  announced  the  first-ever  EU  Anti-Poverty  Strategy 
with the aim ‘to help people to get access to the essential protection and services they need, 
along  with  addressing  the  root  causes  of  poverty’.  In  her  State  of  the  Union  address  in 
September 2025, President von der Leyen highlighted that the Strategy will “lay out our plan 
to  help  eradicate  poverty  by  2050”.  This  document  accompanies  the  Commission 
Communication on the EU Anti-Poverty Strategy, complements the Staff Working Document 
on “Breaking the cycle of child poverty – strengthening the European Child Guarantee” and 
supports  the  proposal  for  the  Council  Recommendation  on  fighting  housing  exclusion.  It 
provides a comprehensive analysis of poverty and its root causes in the EU and gathers evidence 
to support the initiatives presented in the Strategy.  

The rationale for the EU Anti-Poverty Strategy is three-fold. First, combating poverty is a 
moral imperative, and a strategic investment in the EU’s democracy, equality, competitiveness, 
cohesion, resilience, preparedness and shared prosperity. Chapter 1 recalls the legal context of 
the  fight  against  poverty  (in  particular  that  Article  3  of  the  Treaty  of  the  European  Union 
stipulates that the EU shall “combat social exclusion  and discrimination, and shall  promote 
social justice and protection”) and the strong economic and political case of addressing poverty. 
Indeed, preventing poverty is more effective and less costly than addressing its consequences 
and  there  is  a  need  to  unlock  the  EU’s  potential  workforce  and  support  human  capital 
development,  all  the  more  so  in  a  context  of  labour  and  skills  shortages.  Furthermore, 
addressing  poverty  contributes  to  build  trust  in  institutions,  supports  social  inclusion  and 
strengthens the bonds of societies. The EU Anti-Poverty Strategy aims to help reach the EU 
2030 poverty target, while also setting a path towards the ambition to help eradicate poverty by 
2050. 

To help combat poverty, the EU Anti-Poverty Strategy takes a comprehensive approach 
to poverty and recognises that poverty is multidimensional. Chapter 2 of this Staff Working 
Document sketches a definition of poverty and social exclusion in the EU today, recalling how 
it has evolved over the last decades. It also presents key facts and figures1 as well as recent and 
forthcoming trends. Chapter 3 provides an analysis on who faces poverty in the EU, and the 
main reasons behind it. 

The  EU  Anti-Poverty  Strategy  combines  a  preventive  and  supportive  approach,  by 
looking into the root causes of poverty. It takes a life-cycle approach, taking into account the 
different life stages and experiences that shape people’s individual development and wellbeing, 
and  the  specific  policy  responses  needed  in  these  different  phases.  Following  the  active 
inclusion  approach  the  Strategy  promotes  activation,  as  quality  jobs  are  the  best  prevention 
against poverty (for those who can work), together with access to key goods and services as 

1 The figures presented in this document are based on the EU Statistics on  Income and Living Conditions (EU-
SILC), unless indicated otherwise. The EU-SILC is co-ordinated by Eurostat and conducted annually in all EU 
Member States using harmonised concepts and methodology.  

3 

 
 
 
well as adequate income support. Chapter 4 presents relevant polices to support people at risk 
of poverty or social exclusion today and prevent others from falling into poverty. 

The EU Anti-Poverty Strategy recognises that national, regional and local authorities are 
at the forefront of the fight against poverty. Chapter 5 recalls how the EU support Member 
States’ efforts to combat poverty, in particular with guidance and funding, and refers to how 
the  Strategy  will  be  monitored.  Chapter  6  complements  this  by  recalling  how  EU  combats 
poverty outside of its borders through its external policies. 

Annex 1 provides an overview of key structural national challenges and drivers of poverty and 
social exclusion, identifying three priority challenges in each Member State. 

Finally,  the  strategy  was  informed  by  a  comprehensive  consultation  process,  which 
combined  an  open  public  consultation  as  well  as  targeted  consultations  of  all  relevant 
stakeholders, ranging from national authorities, social partners and civil society organisations 
to businesses and persons experiencing poverty. The results of these consultations are presented 
in Annex 1 of this Staff Working Document. 

1. Context of the fight against poverty in the EU 

The EU’s action on poverty is grounded in the Treaties and the Charter of Fundamental 
Rights. Article 3(3) of the Treaty on European Union sets the objective of promoting social 
justice and protection. Articles 19 and 145–161 of the Treaty on Functioning of the European 
Union  establish  the  EU’s  remit  in  the  areas  of  non-discrimination,  employment,  and  social 
policy, while Title III of the Charter of Fundamental Rights enshrines rights relating to equality 
and  solidarity.  The  power  to  enact  most  anti-poverty  policies  remains  primarily  with  the 
Member States, but addressing poverty and social exclusion has been a central concern of the 
EU’s social cohesion agenda for several decades.  

Already in 1975, the Council adopted the first Community programme of pilot schemes 
and studies to combat poverty, marking the beginning of a sustained European policy interest 
in  understanding  and  addressing  poverty  beyond  purely  economic  deprivation.  This  was 
followed by further Community anti-poverty programmes in the 1980s and early 1990s, as well 
as the 1989 Council Resolution on combating social exclusion, which helped broaden the focus 
from  income  poverty  alone  to  wider  patterns  of  exclusion  from  economic  and  social 
participation. In 1992, the Council Recommendation on common criteria concerning sufficient 
resources and social assistance established an important reference point by recognising people’s 
basic right to sufficient resources and social assistance so they can live in a manner compatible 
with human dignity.  

The  Lisbon  Strategy  (2000–2010)  placed  social  inclusion  alongside  employment  and 
growth  objectives,  paving  the  way  for  quantified  EU-level  targets.  Building  on  these 
foundations, the Europe 2020 Strategy, adopted in 2010, introduced the first headline target on 
poverty and social exclusion at EU level: to lift at least 20 million people out of the risk of 
poverty or social exclusion by 2020. This target was supported by enhanced monitoring through 
the  Social  Open  Method  of  Coordination,  earmarking  resources  under  the  European  Social 

4 

 
 
Fund, and strengthened reporting within the European Semester. Although the target was not 
fully met2, Europe 2020 marked a significant step in aligning social objectives with the EU’s 
overall growth strategy.  

The 2008 Commission Recommendation on active inclusion of people furthest away from 
the labour market introduced a comprehensive framework, called active inclusion, inviting 
Member States to design integrated strategies that combine adequate income support, inclusive 
labour markets, and accessible, quality social services. Emphasising a holistic and personalised 
approach, the Recommendation sought to break cycles of benefit dependency and ensure long-
term social and economic integration. The principles of active inclusion are a cornerstone of 
the 2023 Council Recommendation on adequate minimum income ensuring active inclusion.  

The 2013 Social Investment Package called on Member States to prioritise social policies 
that invest in people throughout the life course, prevent social risks and strengthen active 
inclusion  through  adequate  income  support,  inclusive  labour  markets  and  access  to  quality 
services. 

The European Pillar of Social Rights (EPSR), jointly proclaimed in 2017 by the European 
Parliament, the EU Council and the European Commission, further reinforced the EU’s social 
dimension. The Pillar sets out 20 principles in the areas of equal opportunities, fair working 
conditions, and social protection and inclusion. The third chapter of Pillar embeds key policy 
areas to tackle poverty and social exclusion, such as in particular Principle 11 on childcare and 
support to children; Principle 14 on minimum income; Principle 17 on inclusion of persons with 
disabilities; Principle 19 on housing and assistance for the homeless and Principle 20 on access 
to essential services. 

The EPSR Action Plan (2021) introduced a headline poverty reduction target: to reduce by at 
least 15 million the number of people at risk of poverty or social exclusion by 2030, including 
at  least  5  million  children.  The  target  was  endorsed  at  the  2021  Porto  Social  Summit  and 
welcomed by the European Council. All Member States established national poverty reduction 
targets, with 21 countries also setting specific child poverty reduction targets. The Pillar Action 
Plan  also  announced  a  number  of  initiatives  to  support  the  implementation  of  the  Pillar 
principles. In the area of poverty and social exclusion relevant initiatives include the Council 
Recommendation establishing a European Child Guarantee, the Council Recommendation on 
minimum income ensuring active inclusion, a European Platform on Combating Homelessness, 
an EU report on access to essential services and guidance on the use of distributional impact 
assessments.  

The  Council  Conclusions  on  the  role  of  labour  market,  skills  and  social  policies  for 
resilient  economies  emphasises  that  those  policies  have  the  potential  to  contribute  to 
economic  growth  while  pursuing  social  objectives.3  Well-designed  social  investment  can 

2 In 2019, for the EU28, the number of people living at risk of poverty or social exclusion was only down by 
around 10 million compared to 200814, with a total of 107.5 million people. Source: 2021 SPC annual review of 
the Social Protection Performance Monitor (SPPM) and developments in social protection policies. 
3  Council  Conclusions  of  18  June  2024  on  the  role  of  labour  market,  skills,  and  social  policies  for  resilient 
economies (11066/24, SOC 443, EMPL 258, ECOFIN 676). 

5 

 
 
 
raise productivity and economic growth. For instance, investments and reforms in education 
and skills can foster economic growth through increases in productivity, innovative capacity 
and employability. Based on a meta-analysis, on average, each euro invested in in-kind benefits 
for  children  yield  over  five  euros  in  return,  with  education-related  interventions  delivering 
highest  returns  of  nearly  seven  euros4.  Since  returns  can  compound  over  the  life  cycle, 
investment  in  early  childhood  education  and  care  (ECEC)  is  expected  to  have  the  strongest 
cumulative  impact.  Active  Labour  Market  Policies  (ALMPs)  and  well-functioning  public 
employment services (PES) can improve the efficiency of labour market matching and activate 
population  groups  that  are  underrepresented  in  the  labour  market.  Investment  in  health  can 
improve the working age and can prolong working lives; such investment can prevent work-
related  illnesses  and  help  (re-)  integrate  persons  with  disabilities  and  those  returning  from 
longer-term sick leave into the labour market. 

As part of its broader strategy to  combat poverty and social  exclusion, the EU has placed a 
strong  emphasis  on  fostering  social  and  territorial  cohesion  across  its  Member  States, 
underpinned  by  several  key  policies  and  funding  mechanisms.  The  Cohesion  Policy  for  the 
2021-2027 period emphasises strategic investments in transitioning towards a greener, more 
digital economy while maintaining a strong focus on inclusivity and social fairness.   

Poverty reduction is also strongly anchored in the EU international agenda. In 2015, the 
UN adopted the Sustainable Development Goals (SDGs), with SDG 1 explicitly calling to “end 
poverty in all its forms everywhere.” The EU committed to integrating the SDGs into its policy 
frameworks, and poverty reduction remains a core indicator of EU progress towards sustainable 
development. The EU also actively contributes to and supports the work of the International 
Labour Organization (ILO), in line with the Social Protection Floors Recommendation, 2012 
(No.  202)  and  with  the  Social  Security  (Minimum  Standards)  Convention,  1952  (No.  102), 
which are relevant commitments to address poverty. 

The  European  Social  Charter  represents  a  social  rights  framework  and  enshrines 
fundamental rights in areas such as work, housing, health, education, and social protection, and 
commits signatory states to guarantee these rights in law and practice. While all Member States 
have  ratified  the  original  1961  European  Social  Charter,  ratification  of  the  1996  Revised 
Charter, which expands and modernises social rights, has been incomplete and some countries 
accepted only a limited number of its provisions. This uneven ratification continues to constrain 
the  full  realisation  of  social  rights  across  Europe  and  highlights  the  need  for  renewed 
commitment to a coherent, high-standard social framework consistent with the principles of the 
EPSR. 

4 Rand, ‘Report on the effectiveness of child benefits in the EU’, forthcoming. 

6 

 
 
 
2. Definitions and key indicators 

2.1. Definitions 
Poverty is multifaceted and complex5. The way it is measured can depend on the context and 
on the underlying approach. For instance, monetary poverty can be assessed using different 
benchmarks — from the World Bank’s fixed international poverty line, which tracks extreme 
poverty in low- and middle-income countries, to measures relating to basic needs (such as food 
in the US), and relative poverty measures, such as those used in the EU and in the OECD.  

The EU approach to poverty and social exclusion has evolved across time, supported by 
advances in EU-level social statistics. A shared understanding has emerged that poverty and 
social exclusion are relative to time and place, while also recognising the need to consider their 
most severe forms. 

•  From the 1970s to the 2000s 

The concept of poverty was first clarified in the EU policy framework in 1975. The Council 
Decision  establishing  the  first  anti-poverty  programme6  defined  the  poor  as  “individuals  or 
families whose resources are so small as to exclude them from the minimum acceptable way of 
life of the Member State in which they live.” This definition emphasised the lack of control over 
resources that hampers full participation in society. It reflected a shared understanding that, in 
advanced  and  prosperous  economies,  governments’  responsibilities  extend  beyond  ensuring 
mere subsistence; they must also ensure that everyone can benefit from society’s overall level 
of prosperity. By referring explicitly to national circumstances, the Council also recognised that 
poverty is relative in time and place and confirmed that it is largely addressed through national 
policies. 

Over  time,  the  definition  of  poverty  evolved,  also  reflecting  a  growing  awareness  that 
poverty is multi-dimensional. What began as  a focus on material resources—“goods, cash 
income  plus  services  from  public  and  private  sources”  (1975  Council  Decision)—was 
broadened in 1984 to include “cultural and social resources.”7  

The concept of social exclusion entered EU policy in the late 1980s, through the 1989 Council 
Resolution on combating social exclusion.8 This broadened the focus beyond monetary poverty 
alone and signalled a shift in policy objectives: from fighting poverty alone to fighting poverty 
and  promoting  social  inclusion.  Since  the  mid-1990s,  EU  documents  have  consistently 
referred to “poverty and social exclusion” together. A shared understanding emerged that this 
is broad enough to accommodate national differences while remaining coherent at EU level. 

Strategy, 

Publications  Office 

5 See for instance Cassio, L.G., Addressing poverty in the EU - Insights from science and practice for an Anti-
2026, 
poverty 
https://data.europa.eu/doi/10.2760/0436735 , JRC144009. 
6 OJ L, 1975/199, 30.7.1975, p. 34, ELI: http://data.europa.eu/eli/dec/1975/458/oj. 
7 OJ L, 1985/2, 3.1.1985, p. 24, ELI: http://data.europa.eu/eli/dec/1985/8/oj. 
8 OJ C, C/1989/277, 31.10.1989, p. 1, ELI: EUR-Lex - 41989X1031 - EN - EUR-Lex. 

European  Union, 

Luxembourg, 

the 

of 

7 

 
 
 
•  2001–2010:  Development  of  social  inclusion  indicators  under  the  Social  Open 

Method of Coordination  

The first set of EU social inclusion indicators was formally adopted by the 2001 Laeken 
Council.  The  list  of  18  indicators  was  developed  by  the  indicators  sub-group  of  the  newly 
established  Social  Protection  Committee  (2000).  This  work  drew  on  decades  of  efforts  to 
develop comparable EU-level measures of poverty and social outcomes, alongside substantial 
investment in standardised EU social statistics. The indicators were used to support EU-level 
monitoring  in  the  context  of  the  Social  Open  Method  of  Coordination  strategy  for  social 
inclusion. 

The 18 “Laeken indicators” placed strong emphasis on relative income poverty, consistent 
with the original definition of poverty. They also covered labour market exclusion (jobless 
households),  regional  disparities  (dispersion  of  employment  rates),  education  (early  leaving 
from  education  and  training),  and  health  (life  expectancy).  Over  time,  this  list  was 
complemented  by  indicators  capturing  additional  dimensions  of  exclusion,  such  as  in-work 
poverty,  access  to  healthcare  (unmet  need),  material  deprivation  (access  to  non-monetary 
resources), and the quality and accessibility of housing. 

•  The current approach since 2010 

In June 2010, EU Heads of State or Government committed to reducing poverty and social 
exclusion  by  at  least  20  million  people  by  2020.  This  target  was  framed  as  “building  a 
cohesive  society  in  which  people  are  empowered  to  anticipate  and  manage  change  and 
consequently to actively participate in society and the economy.” Poverty and social exclusion 
were  defined  using  three  main  indicators:  risk  of  poverty,  severe  material  deprivation,  and 
people living in households with very low work intensity.9 This approach acknowledged the 
multi-dimensional  nature of poverty and social  exclusion and the diversity of situations and 
priorities across the EU. 

At the end of the last decade, the AROPE indicator (at risk of poverty or social exclusion) was 
refined,  following  an  in-depth  revision  of  the  deprivation  items  very  much  based  on  a 
Eurobarometer survey in 2007.10 The definitions of ‘severe material and social deprivation’ and 
of ‘jobless households’ were updated, including by extending the age bracket for the latter to 
64.  AROPE  underpins  the  2030  EU  poverty  reduction  target,  set  at  reducing  the  number  of 
people at risk of poverty or social exclusion by at least 15 million. 

The current AROPE indicator is based on the following dimensions: 

•  At-risk-of-poverty rate (AROP): defined relative to a threshold of 60% of national 
median equivalised disposable income. This relative dimension of poverty also relates 
to the inequality of income at the lower end of the income distribution. 

9 A comprehensive comparison between the indicators used for the EU 2020 strategy and for the EU 2030 target, 
can be found in Eurostat’s Glossary entry: At risk of poverty or social exclusion (AROPE). 
10  European  Commission,  ‘Special  Eurobarometer  279  Poverty  and  exclusion’,  September  2007,  Poverty  and 
exclusion - October 2007 - - Eurobarometer survey. 

8 

 
 
 
•  Severe material and social deprivation (SMSD): a non-monetary measure of poverty. 
It measures the proportion of individuals experiencing an enforced lack of at least 7 out 
of  13  specific  deprivation  items.11  These  items  encompass  both  household-level  and 
individual-level aspects, reflecting the inability to afford essential goods, services, or 
social activities necessary for an adequate life. 

•  Persons living in households with very low work intensity (VLWI) (also known as 
the share of persons living in “(quasi-)jobless households)”: referring to the number 
of people living in households where working age members work a time equal or less 
than 20% of their total combined work-time potential during the previous year. 

Social  monitoring  frameworks  agreed  by  the  Council  and  the  Social  Protection  Committee 
cover also further dimensions of poverty (see chapter 5.3).  

Available poverty statistics12 do not fully capture all dimensions of poverty. These “hidden 
dimensions of poverty” highlight its deep connections with social exclusion and inequality. For 
instance, according to the ATD 4th World project The Hidden Dimensions of Poverty13, poverty 
is associated with limited choices that can reduce individuals’ autonomy and create  ongoing 
insecurity. It is linked to physical, mental and emotional strain influenced by living conditions, 
insufficient nutrition and the challenges of meeting daily needs. People experiencing poverty 
may encounter social attitudes characterised by stigma or exclusion. Poverty can also be defined 
as  the  deprivation  of  the  ‘capacity  to  flourish’  – or  the  capability  to  live a  life  that  one  has 
reasons to value.14 

Finally, it should be noted that certain groups — such as homeless people and those living in 
institutions— often are not covered in official data, and that some dimensions of poverty are 
not well reflected by the data presented below. For instance, it remains a challenge to measure 
and  monitor  structural  discrimination  based  on  gender,  age,  ethnicity,  disability,  sexual 
orientation, gender identity or expression and sex characteristics, or other. 

2.2. Poverty diagnosis 

This section provides a diagnosis of poverty and social exclusion in the EU based on the current 
monitoring framework of poverty and social exclusion across the EU. It reviews key facts and 
figures, including on the territorial dimension, the impact of the cost-of-living crisis, simulation 

11 This represents the proportion of the population experiencing an enforced lack of at least 7 out of 13 deprivation 
items (6 related to the individual and 7 related to the household): Capacity to: 1. face  unexpected expenses; 2. 
afford one week annual holiday away from home; 3. deal with payment arrears (on mortgage or rental payments, 
utility  bills,  hire  purchase  instalments  or  other  loan  payments);  4.    afford  a  meal  with  meat,  chicken,  fish  or 
vegetarian  equivalent  every  second  day;  5.  ability  to  keep  home  adequately  warm;  6.  access  to  a  car/van  for 
personal use; 7. replacing worn-out furniture; 8. internet connection; 9. replacing worn-out clothes by some new 
ones; 10. two pairs of properly fitting shoes (including a pair of all-weather shoes); 11. spending a small amount 
of money each week on him/herself; 12. having regular leisure activities; 13.getting together with friends/family 
for a drink/meal at least once a month. 
12 See also section 5.3 on monitoring. 
13 ATD  Fourth World,  ’The  Hidden  Dimensions  of  Poverty’,  2019, The  Hidden  Dimensions  of  Poverty  - ATD 
Fourth World. 
14 Sen, A., Development as Freedom, Oxford University Press, 1999. 

9 

 
 
 
of the impact of different scenarios on poverty, the role of social protection and stress-testing 
of welfare systems before looking more into future prospects and the impact of megatrends. 

The rapid pace of changes exacerbated by the cost of living, as well as significant shifts in the 
labour market and workforce, calls for better anticipation and stronger, more agile evidence. In 
this  context,  the  Commission  will  improve  the  monitoring  of  poverty  and  put  forward  new 
indicators on affordability, with a view to having them agreed by 2028 and identify a strong 
monitoring basis for progress towards the 2050 ambition of helping eradicating poverty in the 
EU by 2050 (please see section 5.3). This new set of indicators will reflect relevant different 
dimensions  of  poverty,  as  well  as  affordability,  such  as  access  to  basic  goods  and  services 
essential for a decent life, and purchasing power, wealth and debt. 

2.2.1. Key facts and figures 
In 202515, 92.7 million people in the EU - including 19.3 million children - were estimated to 
be in AROPE, representing around 20.9% of the population. Among them, 72.4 million were 
AROP, 26.9 million experienced SMSD, and 26.1 million lived in VLWI households. There 
are  actually  some  overlaps  between  these  dimensions,  with  in  particular  5.7  million 
experiencing the three dimensions altogether and a bit less than half of those in severe material 
deprivation  and  around  one  third  of  those  in  very  low  work  intensity  are  not  experiencing 
monetary poverty.  

Figure 1 

Source: Eurostat (SILC 2025) 

15 Source: Eurostat data (SILC 2025, ilc_peps01n). 

10 

 
 
 
 
 
Wide disparities in AROPE rates persist across Member States. In 2025, AROPE ranged 
from around, or below, 16% in Czechia, Poland, Slovenia, the Netherlands to 25%, or more, in 
Spain,  Lithuania16,  Romania,  Greece,  and  Bulgaria.  This  variation  points  to  the  room  for 
upward convergence in the effectiveness of national frameworks to combat poverty and social 
exclusion as well as to the impact of potential new challenges. 

Chart 1 – At risk of poverty or exclusion rates in the EU (in %) (2025) 

Source: Eurostat (SILC 2025)  

While at risk of poverty (AROP) remains the largest component of the AROPE indicator, 
the composition of AROPE varies considerably across Member States. In 202517, the highest 
AROP rates are observed in Lithuania (22.6%18), Latvia (22.0%), and Bulgaria (21.2%), while 
the lowest are found in Czechia (9.6%), Belgium (10.9%), and Denmark (11.8%). 

The  highest  levels  of  severe  material  and  social  deprivation  (SMSD)  occur  in  Romania 
(16.8%), Bulgaria (15.0%), and Greece (14.9%), compared with much lower rates in Slovenia 
(1.9%), Croatia and Poland (2.0%) and Cyprus (2.2%).  

Regarding  very  low  work  intensity  (VLWI),  the  highest  shares  are  recorded  in  Lithuania 
(11.4%19),  Belgium  (11.0%)  and  Finland  (10.7%),  while  the  lowest  are  in  Slovenia  (3.8%), 
Slovakia and Croatia (4.0%) and Poland and Hungary (4.1%). These contrasts underscore that 

16 Provisional data. 
17 Source: Eurostat (SILC 2025). 
18 Provisional data. 
19 Provisional data. 

11 

 
 
 
 
 
poverty  challenges  are  highly  country-specific,  shaped  by  differing  labour  markets,  social 
protection systems, and living conditions. 

Regarding progress towards the EU 2030 poverty reduction target, between 2019 — the 
baseline  year  for  setting  the  target  —  and  2025,  the  total  number  of  people  in  AROPE  has 
decreased by 3.5 million20 (it declined by around 15 million between 2014 and 2019), SMSD 
registered the biggest decrease, while VLWI is estimated to have slightly dropped and AROP 
to  have  remained  broadly  stable21.  In  contrast,  progress  on  reducing  child  poverty  has 
stalled.  Since  2019,  the  number  of  children  in  AROPE  has  remained  broadly  stable22, 
maintaining the current remaining gap to achieving the 2030 child poverty target to  still 5.0 
million.  

To reach the 2030 headline target, an acceleration of the decline would be needed.  The 
AROPE population would need to fall by an average of around 2.3 million people per year, in 
order to bridge the remaining gap to the 2030 target of 11.5 million23.  

Chart 2: Overall number and rate of persons and of children in AROPE in the EU (2019-
2025)  

Note: Left axis populations (in thousand persons), right axis AROPE rates.  

Source: DG EMPL computation on Eurostat data (ilc_pecs01). 

Even though the decline since 2019 was slower than in the previous decade, some progress 
can be noted, in spite of the Covid pandemic and the energy crisis. This was possible thanks to 
resolute action at EU and national levels, that altogether allowed to prevent a significant drop 
in  employment  or  a  sharp  increase  in  unemployment  and  to  strengthen  resilience  through 

20 Source: based on Eurostat data (SILC 2025, ilc_pecs01). 
21 It can be noted that declines in the AROPE components cannot simply be added to one another to reach the 
overall change in AROPE, since a person could belong to more than one of the components of AROPE. 
22 Source: based on Eurostat data (SILC 2025, ilc_pecs01). 
23 Source: based on Eurostat data (SILC 2025, ilc_pecs01). 
12 

 
 
 
 
additional  support  to  households  income  (in  particular  through  reforms  in  tax  and  benefit 
systems, please see below). 

Chart 3 – At risk of poverty or social exclusion rate in the EU (2007-202524) 

Source: DG EMPL calculations based on Eurostat data, with series adjusted to neutralise the impact of breaks in 
time series over the period. The breaks in time series were treated as follows: when Eurostat’s results are flagged 
as “b”, indicating a break in time series, the change for that year is set be 0. This adjustment does not create fully 
a  break-free  series.  The  method  is  applied  backwards  in  time,  using  EU-SILC  2025  as  the  starting  point 
(provisional estimates, see footnote on data source). 

Since  the  mid-2000s  and  until  2024,  the  AROPE  rate  fell  by  nearly  4  percentage  points, 
equivalent to around 18 million fewer people at risk. However, progress has not been uniform 
over  time.  Between  2007  and  2013,  the  AROPE  rate  first  decreased  and  then  rose  again, 
reflecting the effects of the financial and economic crisis. In contrast, the period 2013 to 2019 
saw a faster decline of 3.3 percentage points (around 15 million people), driven by strong post-
crisis economic recovery. 

Overall,  the  observed  decline  in  the  AROPE  rate  between  2007  and  2024  has  been  driven 
mainly by a sharp reduction in the SMSD rate (–4.9 percentage points) and to a lesser extent by 
decreases in the VLWI indicator (–1.7 percentage points) and the AROP rate (–0.7 percentage 
points). However, trends have shifted over time: all three components initially increased during 
the  financial  crisis,  before  declining  steadily  in  the  subsequent  recovery  years.  Since  2019, 
progress has been led by a slightly faster reduction in the AROP rate (–0.7 percentage points) 
compared  with  the  other  two  AROPE’s  dimensions.  While  overall  AROPE  figures  show  a 
modest reduction compared with 2019, progress for children has reversed, with child poverty 
increasing over the same period. 

24 Provisional figures for SILC 2025, which are based on SILC 2025 data for the 21 Member States for which this 
data had been published on 20/04/2026 and on SILC 2024 data for the remaining 6 Member States. 

13 

 
 
 
 
 
 
Chart 4 – At risk of poverty or exclusion rate in the EU by components (2007-202525) 

Source: DG EMPL calculations based on Eurostat data, with series adjusted to neutralise the impact of breaks in 
time series over the period. The breaks in time series were treated as follows: when Eurostat’s results are flagged 
as “b”, indicating a break in time series, the change for that year is set be 0. This adjustment does not create fully 
a break-free series. The method is applied backwards in time, using EU-SILC 2025 (provisional estimates, see 
footnote on data source) as the starting point. 

Developments in AROPE  vary widely  across  Member States.  Most  countries have made 
progress.    Importantly,  between  2007  and  2024,  several  Member  States  with  initially  high 
AROPE  rates  (for  instance  Romania,  Poland,  Hungary,  Latvia,  Croatia  and  Bulgaria)  have 
recorded  marked  improvements,  pointing  to  gradual  convergence  within  the  EU,  though 
outcomes remain closely tied to national contexts and policy choices.  However, a few other 
Member States have seen stagnation or even slight deterioration in their AROPE rate. 

•  Around one third of Member States achieved sharp declines in AROPE rates, exceeding 
10 percentage points in Romania, Poland, and Hungary, and ranging between 5 and 10 
points in Latvia, Croatia, Bulgaria, and Portugal. 

•  Another third saw moderate reductions (between  –3 percentage points  and stability), 
including  Czechia,  Ireland,  Belgium,  Lithuania,  Italy,  Austria,  Germany,  Slovakia, 
Estonia, Slovenia, and Finland. 

25 Provisional figures for SILC 2025, which are based on SILC 2025 data for the 21 Member States for which this 
data had been published on 20/04/2026 and on SILC 2024 data for the remaining 6 Member States. 

14 

 
 
 
 
•  Conversely,  a  third  of  Member  States  experienced  stagnation  or  increases,  notably 
France, Malta, Sweden, Denmark, Greece, Spain, and Luxembourg, with adverse trends 
since 2019 in France and Denmark. 

Chart 5 – Trends in AROPE rates (in percentage points) (2007-2024) 

Source: DG EMPL calculations based on Eurostat data, with series adjusted to neutralise the impact of breaks in 
time series over the period. The breaks in time series were treated as follows: when Eurostat’s results are flagged 
as “b”, indicating a break in time series, the change for that year is set be 0. This adjustment does not create fully 
a break-free series. The method is applied backwards in time, using EU-SILC 2024.  

Analysis based on EUROMOD allows for a detailed breakdown of changes in the AROP rate 
over time, identifying the specific effects of policy reforms. Findings from the JRC indicate 
that tax-benefit reforms between 2019 and 2024 played a significant role  in reducing the 
AROP  rate,  although  their  impact  was  influenced  by  market  income  trends  and  structural 
changes (see box 1 for elements on a longer time span). Three main patterns emerge: 

•  First, in most countries (e.g. Lithuania, Romania, Portugal, Latvia, Bulgaria, Slovakia), 
policy measures were strongly  poverty-reducing (impact  on the at  risk poverty rate), 
showing that tax and benefit reforms generally lowered poverty risks. 

•  Second, in a few cases (Finland, Cyprus, France), at risk of poverty increased, due to 
insufficient  benefit  indexation  or  tax-benefit  design  changes  that  disadvantaged  low-
income households. 

•  Third,  in  Slovakia,  Latvia,  and  the  Netherlands,  poverty-reducing  policies  were 
outweighed by poverty-increasing market income effects. Changes in policies in these 
countries were poverty-reducing. However, overall poverty increased due to the effect 
of changes in the distribution of market incomes that were poverty-increasing. Overall, 
the poverty-increasing effect of market incomes (such as higher polarisation of market 
incomes) was stronger than the poverty-reducing effect of policy changes. 

15 

 
 
 
 
•  The “residual effect” — reflecting demographic or institutional shifts26 — also varied: 
it raised poverty in  Ireland, Luxembourg, and Malta, but  reduced it in  Germany and 
Sweden. 

Box  1  –  Disparities  in  social  expenditure  and  their  impact  on  poverty  across  Member 
States  

The share in GDP of the expenditure on social protection benefits reached, in the EU, 27.3% in 
2024. Variation across Member States remains large, with six countries having shares above 
28% and another six below 18%.27 The share of expenditure in GDP also varies depending on 
the types of social protection benefits considered. At EU27 level (2024), it was for instance of 
11.3% of GDP for old-age benefits and 8.1% for sickness/healthcare benefits. 

Chart 6 – Impact of social transfers (excl. pensions) on poverty reduction in the Member 
States (SILC 2024)  

Source: Eurostat. 

The  impact  of  social  transfers  (excluding  pensions)  on  poverty  reduction  varies 
significantly  between  Member  States  ranging  from  around  15%  to  around  50%  and 
reaching 34.1% at EU27 level. These large differences highlight the potential for improvement 
in  some  Member  States  in  the  adequacy,  coverage  and  effectiveness  of  social  protection 
expenditure.28  Between  2007  and  2024,  the  impact  of  social  transfers  (excl.  pensions)  on 

26 See also on the impact of changes in household structures for instance Azzolini, L., Breen, R. and Nolan, B., 
Changing household structures, household employment, and poverty trends in rich countries, Journal of European 
Social Policy, 2025. 

27 Respectively Finland, France, Austria, Germany, Belgium and Italy, and Estonia, Romania, Lithuania, Hungary, 
Malta and Ireland. 
28  This  indicator  is  a  headline  indicator  of  the  social  scoreboard  that  provides  an  overall  information  on  the 
effectiveness of transfers in terms of poverty reduction. It focuses on the impact on the at risk of poverty rate as a 
16 

 
 
 
 
 
poverty  reduction  at  EU27  level  slightly  increased  overall  (+1.2  pp),  with  however  some 
fluctuations over time: first a decline over 2007-2013 by 1ppt, that further continued over 2013-
2019 by 0.6 ppt and then a significant increase (+2.8 ppt) over 2019-2024. Over this period, 
declines were observed in 15 Member States and increases in 12 Member States. It dropped the 
most in Hungary (-15.1 pp) and Luxemburg, Denmark, Croatia and Sweden (by around -10 pp). 
It  increased the most in  Bulgaria (+24  pp),  IT  (+17.2 pp), Estonia (+14.6 pp), as well as in 
Cyprus, Belgium and Lithuania (by around +6 pp).  

Chart 7 – Impact of social transfers (excl. pensions) on poverty reduction in the Member 
States (SILC 2007-2024)  

Source: DG EMPL calculations based on Eurostat data, with series adjusted to neutralise the impact of breaks in 
time series over the period. The breaks in time series were treated as follows: when Eurostat’s results are flagged 
as “b”, indicating a break in time series, the change for that year is set be 0. This adjustment does not create fully 
a break-free series. The method is applied backwards in time, using EU-SILC 2024  

In addition, while there is no agreed EU indicator of severe poverty, reaching the 2050 ambition 
of helping to eradicate poverty requires complementing existing indicators with a measure of 
absolute poverty in the EU. As a first approximation, we can rely on the EU severe material 
and social deprivation (SMSD) indicator, combined with the at risk of poverty rate (people with 
an equivalised disposable income -after social transfers-– below 60% of the national median 
equivalised disposable income after social transfers). This indicator provides a picture of severe 
forms of poverty by focusing on the lack of access to key goods or services, as this relates to 
a certain minimum acceptable standard of living by referring to elements that are essential for 
living  in  dignity,  such as “a meal  with  meat,  chicken or fish or vegetarian equivalent  every 
second day”, “keeping home adequately warm”, “replacing worn-out clothes” or “having two 
pairs of properly fitting shoes”, among other things. It represents a lack of access to 7 out of 13 

whole, but not specifically on the depth of poverty or on households in deeper poverty. It may not improve when 
individuals take up employment or increase their work intensity if they remain in poverty. 

17 

 
 
 
 
items,  while  being  at  risk  of  poverty,  while  focusing  on  dimensions  that  more  specifically 
capture severe forms of poverty would allow to better capture severe forms of poverty. 

Chart 8 – Share (in % of the total population) and number (in thousand) of persons in the 
EU in severe forms of poverty (2008-202529) 

Source: DG EMPL calculations based on Eurostat data, with series adjusted to neutralise the impact of breaks in 
time series over the period. The breaks in time series were treated as follows: when Eurostat’s results are flagged 
as “b”, indicating a break in time series, the change for that year is set be 0. This adjustment does not create fully 
a break-free series. The method is applied backwards in time, using EU-SILC 2025 (provisional estimates, see 
footnote on data source) as the starting point. 

Currently, there are about 14 million people in such forms of severe poverty. At EU level, 
the  share  in  the  total  population  was  at  4.8%  in  2008,  then  peaked  at  5.4%  in  2012  before 
decreasing to 3.1% in 2025. There are a few Member States where severe poverty is already 
nearly negligible (close to 1% or lower), while they still have a sizable AROPE population. 

Between 2008 and 2024, the biggest drops in severe poverty occurred in Bulgaria, Romania 
and Latvia, which had initially the highest severe poverty rates. These drops, together with the 
(smaller) drops occurring in some of the other Member States, contributed to the overall decline 
in the EU severe poverty rate. However, a few Member States saw a slight deterioration in their 
severe poverty rate while Greece saw a larger deterioration. Overall, it appears that, in most of 
the Member States, the 2013 – 2019 period saw the largest decline in severe poverty, compared 
with  2008  –  2013  or  2019  –  2024,  which  showed  more  limited  declines  and  even,  in  some 
instances, increases. 

29 Provisional figures for SILC 2025, which are based on SILC 2025 data for the 21 Member States for which this 
data had been published on 20/04/2026 and on SILC 2024 data for the remaining 6 Member States. 

18 

 
 
 
 
 
Chart 9 – Share of persons in the EU (in % of  the total population) in severe forms of 
poverty (2024) 

Source: DG EMPL calculations based on Eurostat online database. 

The relatively slow overall decline of people at risk of poverty or social exclusion in the 
EU  hides  significant  yearly  transitions  in  and  out  of  poverty.  30  At  the  EU27  level  on 
average, from the income years 2022 to 202331, around one third (32.1%32) of the population at 
risk of poverty moved out of poverty (“exit rate”), and 5.3% of the population not at risk of 
poverty moved into poverty (“entry rate”).33 When expressed as a share of the total population, 
this  means  that  5.0%  of  the  total  population  moved  out  of  poverty  and  4.5%  of  the  total 
population moved into it.34 35 

There is wide variation across Member States in exit and entry rates. For instance, three 
Member States (Belgium, Czechia, Denmark) show an overall better performance with higher 
exit  rates  (averaging  37.2%  of  the  population  at-risk-of-poverty)  and  a  lower  entry  rate 
(averaging  3.1%  of  the  not  at-risk-of-poverty  population)  than  the  EU27  average.  At  the 

30 Alina-Mihaela Sandor, Shaun Da Costa and Argyrios K. Pisiotis, Poverty Dynamics in the EU: Exploring the 
experience and trajectories of poverty over time, Publications Office of the European Union, Luxembourg,  2026 
(forthcoming). 
31 I.e. from SILC 2023 to SILC 2024. 
32 The data mentioned in this section comes from own computation on Eurostat EU-SILC scientific use files (SUFs)  
(based on SILC longitudinal data). 
33 These % are expressed respectively in % of the AROP population and in % of the not AROP population for EU-
SILC 2024 (income reference year 2023). 
34 These % are expressed for the total population from EU-SILC 2024 (income reference year 2023). 
35 The change in the EU27 AROP rate of -0.5pp has been obtained using longitudinal EU-SILC data from Eurostat. 
For various reasons, it somehow differs from the change (from SILC 2023 (income reference year 2022) to EU-
SILC 2024 (income reference year 2023)) in the Eurostat published AROP rate, which was of 0.0pp and based on 
EU-SILC scientific use files (SUFs). 

19 

 
 
 
 
opposite,  six  Member  States  are  showing  both  a  lower  exit  rate  (averaging  24.4%  of  the 
population  at-risk-of-poverty)  and  a  higher  entry  rate  (averaging  7.0%  of  the  not  at-risk-of-
poverty  population)  than  the  EU27  average.  There  are  two  other  groups  of  Member  States, 
which are in an intermediate situation: a group of six Member States having a higher exit rate 
(averaging 39.6% of the population at-risk-of-poverty) but also a higher entry rate (averaging 
6.4% of the not at-risk-of-poverty population) than the EU27 average, as well as a group of 
twelve  Member  States  with  a  lower  exit  rate  (averaging  26.9%  of  the  population  at-risk-of-
poverty)  but  also  having  a  lower  entry  rate  (averaging  3.8%  of  the  not  at-risk-of-poverty 
population) than the EU27 average. 

People  with  low  education  are  the  most  vulnerable  in  terms  of  how  persistently  they 
experience poverty. People with low educational attainment (ISCED 0-2) are three times more 
likely than the highly educated (ISCED 5-8) and more than twice as likely as those with medium 
educational  attainment  (ISCED 3-4) to  have experienced poverty. They are five times more 
likely than the highly educated to be chronically poor.36 

2.2.2. The territorial dimension of poverty 

It is widely agreed that economic prosperity at aggregated levels alone will not  achieve 
social  progress.  High  levels  of  inequality  risk  leaving  much  human  potential  unrealised, 
damage social cohesion, hinder economic activity and undermine democratic participation. The 
EU  made  significant  progress  on  income  inequalities  within  countries  in  the  last  decade.37 
Additionally,  the  trends  in  economic  disparities  between  EU  countries  show  a  long-term 
convergence of Member States in terms of GDP and income.38 

Economic disparities between EU countries in terms of GDP and household income have 
fallen  notably  in  recent  years.  Not  only  have  economic  performance,  incomes  and  living 
standards improved across  the EU as a whole over time, they have  also  converged between 
countries. 

The coefficient of variation in gross domestic product (GDP) per capita — expressed in 
purchasing power standards (PPS) — shows that economic disparities between Member 
States have narrowed since 2000, reaching 38.0% in 2024.39 Most of this convergence took 
place in the period leading up to the 2008 economic crisis and between 2015 and 2019. The 

in 

Europe 

developments 

Publications  Office 

36  European  Commission:  Directorate-General  for  Employment,  Social Affairs  and  Inclusion, Employment  and 
social 
European  Union, 
2025, 
2025, https://data.europa.eu/doi/10.2767/9505984. 
37  European  Commission:  Directorate-General  for  Employment,  Social  Affairs  and  Inclusion,  Economic 
inequalities in the EU – Key trends and policies, Publications Office of the European Union, Luxembourg, 2024, 
https://employment-social-affairs.ec.europa.eu/document/download/960863c4-b2b3-45ac-a79b-
e693d5cec7da_en?filename=20240712_Analytical paper_final.pdf 
38 Eurostat, ’Sustainable development in the European Union – Monitoring report on progress towards the SDGs 
in  an  EU  context  –  2025  edition’,  Publications  Office  of  the  European  Union,  Luxembourg,  2025, 
https://doi.org/10.2785/1111373. 
39 Idem. 

the 

of 

20 

 
 
 
 
development  since  2019  has  been  less  clear,  showing  an  increase  in  economic  disparities 
between countries during the COVID-19 crisis in 2020 and 2021, followed by a decrease in 
2022 and 2023 and a stagnation in 2024. Overall, the EU coefficient of variation fell slightly 
by 1.6 percentage points between 2019 and 2024, reaching 38.0% in 2024. The long-term trend 
has been more favourable, showing a 6.6 percentage point reduction in the EU coefficient of 
variation. At Member State level, purchasing power adjusted GDP per capita ranged from 66% 
of the EU average in Bulgaria to 241% in Luxembourg in 2023. 

While GDP per capita is used to measure a country’s economic performance, adjusted gross 
household disposable income provides an indication the average material well-being of people. 
Gross household disposable income reflects households’ purchasing power and ability to invest 
in goods and services or save for the future, by taking into account taxes, social contributions 
and in-kind social benefits.  

The coefficient of variation in gross household disposable income between Member States 
has fallen significantly over time, reaching 21.2% in 2023.40 This figure is 5.1 percentage 
points lower than in 2018 and a 11.0 percentage point improvement since 2008. However, a 
clear north–south and west–east divide is evident when looking at the geographical distribution 
of GDP per capita and household income (from national accounts) in the EU. Citizens living in 
northern and western European countries with above-average GDP per capita levels had the 
highest  gross  disposable  income  per  capita.  At  the  other  end  of  the  scale  were  eastern  and 
southern  EU  countries,  which  displayed  gross  household  disposable  incomes  and  GDP  per 
capita levels below the EU average. 

This pattern is mirrored in poverty dynamics. While the between-country variance in the 
AROP  rate  has  fallen  significantly  (to  7%  in  2023),  the  within-country  variance  appears 
dominant, accounting for roughly 85% of total AROP dispersion. This indicates that poverty is 
a challenge rooted in domestic and sub-regional inequalities. 

Poverty  and  social  exclusion  are  deeply  shaped  by  territorial  inequalities,  reflecting 
differences in territorial economic structures, labour market opportunities (themselves directly 
impacted by structural shifts in  the  economy,  such as in  particular de-industrialisation), and 
access to services. In some cases, there are gaps between urban and rural areas, and pockets of 
poverty are largely concentrated in small areas, driven by economic and/or demographic decline 
or historical underdevelopment. 

Moreover, some regions in the EU are confronted with stagnant or declining growth and 
prosperity, which increase the risk of poverty concentration and impacts the quality of local 
services and opportunities for citizens. These adverse trends not only threaten the sustainability 
of welfare systems and EU’s competitiveness but also affect people’s willingness to remain in 
a certain place. 

40 Idem. 

21 

 
 
 
The  Draghi  report41  argues  that  Europe’s  ongoing  deindustrialisation risks  eroding  its 
economic base and social model. As manufacturing declines or relocates outside the EU, the 
report warns that this shift disproportionately affects less-skilled workers and industrial regions, 
increasing the risk of poverty and social exclusion while straining public finances. 

Map 1 shows vulnerability at EU regional level, with some facing high AROPE, primarily 
due to high levels of income poverty (AROP). These areas often struggle with limited access to 
essential  goods,  services  and  infrastructure.  Yet  progress  has  been  achieved  in  the  AROPE 
reduction since 2015, especially in eastern EU regions. Though economically stronger overall, 
several west-northern EU regions report higher shares of people living in households with very 
low work intensity (VLWI). This highlights challenges related to long-term unemployment and 
barriers to labour market participation. Regions that consistently show high rates across all three 
components  require  integrated  and  comprehensive  policy  responses  and  targeted  cohesion 
funding. 

Draghi, 

41 
The 
https://commission.europa.eu/topics/competitiveness/draghi-report_en#paragraph_47059. 

European 

future 

al., 

M. 

of 

et 

competitiveness, 

2024, 

22 

 
 
 
 
 
Map 1: Rates of AROPE and its components by NUTS 2 region (2024) 

Source: Eurostat  (online data codes ilc_peps11n, ilc_li41, ilc_mdsd18, ilc_lvhl21n). 

At  EU  level,  the  AROPE  rate  remains  broadly  similar  throughout  degrees  of 
urbanisation: in 2024, it stood at 21.3% in rural areas, 20.3% in towns and suburbs, and 21.3% 
in  cities.  Specific  challenges  linked  to  rural  areas  or  to  cities  are  evident  when  looking  at 
different parts of the EU and each country. In eastern and southern EU countries, city residents 
generally have higher employment rates and lower poverty rates compared to rural residents. 

23 

 
 
 
 
 
 
 
 
 
 
In  most  north-western  EU  countries,  however,  the  opposite  is  the  case.42  For  instance,  in 
Romania,  41.7%  of  rural  residents  were  AROPE,  compared  with  14.3%  in  cities  (gap  of 
27.4pp).  Population  in  rural  areas,  towns  and  suburbs  and  cities  face  distinct  challenges.  In 
cities, challenges can be linked to e.g. labour market polarisation and in-work poverty, rising 
cost of living and housing affordability, and spatial segregation. In rural areas, they can be 
linked  to  limited  economic  diversification,  population  decline  and  ageing,  service  delivery, 
risks of isolation and poverty and generational loss in farming. 

The EU’s outermost regions face markedly higher risks of poverty or social exclusion than 
both national and EU averages. In Portuguese Açores, the AROPE rate is 28.4% and 22.9% 
in Madeira, compared to around 20% in Portugal as whole. As well, the AROPE rate in Canary 
Islands is 31.2%, compared to around 25% in Spain as a whole. In 2024, the AROPE rate in 
French Guiana (59.5%) is nearly three times higher than in France as a whole (around 20%). 
These gaps are closely linked to low GDP per capita, and to persistently high unemployment. 
Educational inequalities further exacerbate these challenges. These structural disadvantages are 
compounded by exposure to climate change, as well as by demographic pressures. For instance, 
populations in Mayotte and French Guiana are projected to triple and double, respectively, by 
2100. 

Furthermore, it is crucial to highlight that regional data, such as NUTS 2 classifications, 
often  shadows  critical  local  variations  in  poverty.  While  a  region  may  appear  relatively 
prosperous on average, deprivation can be sharply concentrated in specific municipalities or 
neighbourhoods, driven by factors like housing costs, employment precarity, or service gaps. 
However,  local-level  data  availability  remains  limited  and  uneven  across  the  EU.  Member 
States  lack standardised  local  datasets  due to  administrative barriers or resource  constraints. 
Closing this gap is essential for designing targeted, place-based policies that address poverty 
where it is most acute. 

2.2.3. The impact of the increasing cost of living  
The  cost  of  living  remains  a  significant  worry  for  consumers  in  the  EU43:  38%  are 
concerned about being able to pay their bills (compared with 48% in 2022), while 35% worry 
about affording their preferred food (compared with 44% in 2022). 

The  period  of  rapidly  rising  consumer  prices  that  followed  Russia’s  illegal  full-scale 
invasion of Ukraine in February 2022 subsided in 2024. The EU27 annual rate of inflation 
stood  at  2.7%  in  December  2024,  considerably  lower  than  the  peak  of  11.5%  recorded  in 
October 2022. However, the evolution of consumer prices remains to be assessed in light of 
rapidly  evolving  geopolitical  situation  and  current  global  conflicts.  Such  significant 

42 Dijkstra, L., Testori, G., Hormigos Feliu, C., Kompil, M., Proietti, P. et al., Trends, challenges and opportunities 
in EU cities: Supporting the EU Cities Agenda, European Commission, Ispra, 2025. 
43 European Commission: Directorate-General for Justice and Consumers, ’Consumer Conditions Scoreboard  - 
2025, 
2025 
consumer_conditions_scoreboard_2025_EN.pdf. 

Luxembourg, 

Publications 

European 

edition’, 

Union, 

Office 

the 

of 

24 

 
 
 
 
developments in inflation affect real incomes and the affordability of key goods and services 
for households, in particular the most vulnerable ones, thereby impacting on poverty and social 
exclusion. 

Median incomes have remained broadly stable in the EU following the inflation shock in 
2022 and 2023. The growth of median income had decelerated with the Covid pandemic. This 
contrasted with the steady growth experienced over the second half of the last decade (that more 
than compensated the impact of the financial crisis). Overall, median incomes have grown by 
around 25% since 2006 in the EU, albeit with a great heterogeneity, with some Member States 
experiencing  significant  declines  (Greece),  while  incomes  nearly  doubled  in  some  others 
(Poland, Romania or Bulgaria).44 

Median income developments during the energy crisis have varied a lot among Member 
States,  with  significant  declines  in  some.  In  around  half  of  the  Member  States,  median 
incomes  declined  in  2022-23,  sometimes  to  a  significant  extent  (by  around  10%  or  more). 
Others were mostly stable and only a few increased, also contributing to social convergence 
(Bulgaria, Poland, Romania). This has also translated into an increase in the at ‘risk of poverty’ 
rate  over  time  (where  the  poverty  threshold  is  held  constant  in  real  terms  in  2019)  in  most 
Member States in 2022. 

Chart  10  –  Real  median  households 

income  growth 

(2018-23) 

in 

the  EU

Source:  DG EMPL calculations on EU-SILC  – years are income years. Series have been adjusted to neutralise 
the impact of breaks in time series over the period. 

44 DG EMPL calculations on Eurostat SILC data – years are income years. Series have been adjusted to neutralise 
the  impact  of  breaks  over  the  period.  The  evolution  of  real  median  equivalised  disposable  income  EU27  is 
computed as a weighted average of the evolutions in Member States. 

25 

 
 
 
 
 
 
In this context, lower-middle and mid-level wage earners have increasingly struggled to 
afford basic goods or services.45 The worsening in some high-income Member States since 
2019 reflects increases in energy and food prices, which led to a growing share of workers being 
deprived of proper heating or quality  food, in  the context of a slow recovery in  real  wages. 
While energy prices have started to ease off in 2023, the prices consumers have to pay for food 
and non-alcoholic beverages have continued to increase (altogether by 31.9% between January 
2021 and December 2024). Some everyday products have increased dramatically in price: olive 
oil prices almost doubled across the EU between January 2021 and December 2024 (around 
100% increase), sugar prices increased by around 50% over the same period, while increases 
of more than 40% were recorded for fruit and vegetable juices and potatoes.46 Households and 
individuals  in  the  EU  are  impacted  to  different  degrees  by  these  increased  prices,  with  the 
lower-income households affected  more significantly,  since the share of energy and food in 
their consumption is higher.47 Households in the EU spend on average 13% of their  income 
food, with the poorest fifth spending as much as 21%, compared with just 9% for the richest 
fifth. 

Similarly, low-income households have seen a decline in their incomes during the energy 
crisis in a number of Member States. In more than half of the Member States, real incomes 
declined for the first decile in the 2022-23 period, and in around one third of Member States to 
a significant extent (by around 10% or more see chart 11). In some instances, this decline has 
exceeded the gains that were registered in previous years (2018-21). 

45 European Commission: Directorate-General for Employment, Social Affairs and Inclusion, ’Labour market and 
wage  developments  in  Europe  –  Annual  review  2025’,  Publications  Office  of  the  European  Union,  2025, 
https://data.europa.eu/doi/10.2767/1810636. 
46 European Commission: Directorate-General for Agriculture and Rural Development, ’State of Food Security in 
the EU A qualitative assessment of food supply and food security in the EU within the framework of the EFSCM’, 
2024, State of Food Security in the EU (2024). 
47 European Commission: Directorate-General for Economic and Financial Affairs, ’Quarterly Report on the Euro 
Area‘, Volume 22, No 1, Publications Office of the European Union, Luxembourg, 2023, Quarterly Report on the 
Euro Area (QREA), Vol. 22, No. 1 (2023) - Economy and Finance 

26 

 
 
 
Chart 11 – Real households income growth in the first decile (2018-23) in the EU 

Source:  DG EMPL calculations on EU-SILC – years are income years. Series have been adjusted to neutralise the 
impact of breaks in time series over the period. 

Real wages began recovering in the second half of 2023, after their sharp decline between the 
end of 2021 and the first half of 2023 due to high inflation. Growth accelerated in 2024, with 
real wages in the EU rising by 2.7%. In 2025, they are set to exceed their 2019 levels, except 
in a few Member States.48. 

2.2.4. Scenarios of poverty until 2030 

While there are no available projections of the future number of people at risk of poverty or 
social exclusion or of AROPE rates, it is possible to grasp the potential impact of key drivers 
on future trends based on the literature and from specific simulations.49 Four main drivers are 
typically  at  play  and  can  be  accounted  for:  employment,  minimum  wages,  adequacy  and 
coverage of minimum income schemes (and more generally of social benefits) and future socio-
demographic  trends  (such  as  in  particular  skills  and  ageing  of  the  population).  The  poverty 
reduction impact of these drivers varies depending on the specific policy changes considered. 
Their combined impact can be very significant, which underlines the key importance of having 
an integrated approach towards addressing poverty. 

Specific  simulations  using  EUROMOD  have  been  elaborated  combining  these  four  main 
drivers in the following three scenarios:  

in  Europe’,  Publications  Office  of 

48 European Commission: Directorate-General for Employment, Social Affairs and Inclusion, ’Labour Market and 
Wage  Developments 
the  European  Union,  Luxembourg,  2025, 
https://doi.org/10.2767/5730015. 
49 Bornukova, K., Depoortere A., Leventi, C., Manso L., Mazzon, A., Papini, A., ’Reducing AROPE in the EU: 
combining  minimum  income,  minimum  wages,  and  employment  expansion’,  JRC  Working  Paper  Series  on 
Taxation and Structural Reforms, European Commission, Seville, March 2026, JRC146407. 

27 

 
 
 
 
•  A “no reforms” scenario, where only upcoming skills and demography projections until 
2030 have been taken into account (these trends are not accounted for in the following 
two scenarios). This reflects on the one side the impact of the structural shift towards a 
better  skilled  workforce  (and  hence  better  employment  outcomes)  as  well  as  the 
demographic shift towards more older people who on average experience lower risks of 
poverty and social exclusion. 

•  An “implementation” stylised scenario, where the national 2030 employment targets are 
reached, while minimum wages reach 60% of the median wages and the provisions of 
the Council Recommendation on minimum income ensuring active inclusion would be 
implemented (adequacy of benefits reaching the poverty threshold and the coverage rate 
increased by around 10 ppts).  

•  An “acceleration” scenario, where a further reduction (on top of the “implementation” 
scenario) in the share of people in households with very low work intensity is taking 
place and  a full coverage of minimum  income is achieved  (which would  represent  a 
very significant development compared to the current status). 

Chart 12 – Three scenarios   

The  results  show  that  in  the  “implementation”  scenario,  the  2030  headline  target  on 
poverty reduction would be fully achieved, with a decline by 18.5 million people at risk of 
poverty or social exclusion compared with  2024. In the “acceleration” scenario, the poverty 
reduction would be even more substantial with a decline by almost 55 million people out of the 
risk  of  poverty  or  social  exclusion  compared  2024.  Furthermore,  the  expected  socio 
demographic trends (related to the shift towards more skilled workforce and to the ageing of 
population)  would  translate  in  a  decline  of  around  8  million  people  at  risk  of  poverty  or 
exclusion  by  2030  (“no  reform”  scenario).  The  additional  cost  to  achieve  these  poverty 
reductions would be of 0.25 % of GDP for the “implementation” scenario and 0.91 % of GDP 
for the “acceleration” scenario. 

28 

 
 
 
 
Chart 13 – Impact on AROPE under three scenarios   

2.2.5. Stress-testing EU Welfare Systems 

Stress testing welfare systems allows us to assess their resilience to shocks 

Stress  testing  welfare  systems  contributes  to  preparedness  and  future  resilience  as  it 
allows identifying remaining gaps in welfare systems in case of shocks. Social protection 
systems are designed to safeguard households against risks, preventing and addressing poverty, 
maintain living standards and reduce inequality. Stress testing helps to identify ex ante some 
potential gaps in the impact of welfare systems when economies face sudden or severe shocks.  

The concept of stress testing originates from finance, where regulators examine whether banks 
can withstand extreme economic conditions. T. Atkinson first proposed applying the same idea 
to welfare systems in 2009, underlining that governments need to understand how well social 
protection measures perform under stress, rather than only in normal circumstances.50 
Atkinson  suggested  specifically  considering  whether  households  maintain  adequate  income 
when  faced  with  a  sudden  job  loss,  whether  income-tested  benefits  stabilise  households’ 
incomes, and which groups are most vulnerable to gaps in the social safety net.  

Stress  testing  provides  a  structured  approach  to  assess  the  resilience  of  our  systems, 
identify weaknesses and highlight best practices. It is not intended to predict the impact of 
future  crises.  Stress  testing  also  involves  defining  outcome  measures  such  as  changes  and 
inequality, household (real) income, or fiscal costs, specifying stress scenarios including sudden 
unemployment surges, income loss, or price increases. The impact  under these scenarios on 
households  is  then  assessed  using  detailed  microdata  and  tax/benefit  models,  identifying 
vulnerable  groups  and  structural  gaps.  By  systematically  testing  welfare  systems  against 
plausible  shocks,  policymakers  can  pinpoint  areas  requiring  reform  and  design  policies  that 
better protect people during times of crisis. 

50 Atkinson, A. B., Stress-testing the welfare state, 2009. In Ofstad, B., Bjerkholt, O. & Skrede, K. (Eds.), Rettferd 
Og Politik Festskrift Til Hilde Bojer (pp. 31-39). Emiliar Forlag. 

29 

 
 
 
 
Stress testing unemployment shocks 

A  sudden  rise  in  unemployment  is  one  of  the  most  immediate  and  visible  threats  to 
household income and social stability. In the context of the EU Anti-Poverty Strategy, the 
European Commission carried out a stress-testing exercise to assess how tax/benefit systems 
across the European Union would respond to a sudden increase in unemployment. 

Job  losses  directly  reduce  earned  income,  while  they  can  also  trigger  a  cascade  of 
secondary  effects,  including  reduced  contributions  to  social  security,  increased  reliance  on 
benefits,  and  rising  household  debt.  These  effects  can  be  unevenly  distributed  across  the 
population. For example, young workers, temporary employees, and low-income households 
are typically more vulnerable to income loss and may face greater difficulty in accessing social 
benefits. 

Stress testing unemployment shocks allows to assess how well existing social protection 
systems cushion these losses and maintain living standards. By simulating a sudden increase 
in unemployment, it is possible to evaluate the capacity of unemployment and other benefits 
such as housing support, child benefits and minimum income schemes, as well as tax provisions 
to prevent households from falling into poverty. The analysis also highlights the performance 
of automatic stabilisers and allows us to identify potential gaps in coverage or benefit adequacy. 

Two  hypothetical  labour-market  shocks  are  considered  across  all  Member  States:  a 
moderate  shock  (where  the  unemployment  rate  increases  by  two  percentage  points)  and  a 
severe shock (where unemployment increases by four percentage points). These magnitudes 
are  broadly  consistent  with  labour-market  changes  observed  in  past  downturns.  During  the 
global financial crisis, unemployment in the EU increased from 7.2% in 2008 to 9.1% in 2009, 
and  later  reached  11.4%  in  2013.  The  analysis  focuses  on  three  main  dimensions:  i/  how 
effectively tax/benefit systems protect household incomes when employment declines; ii/ how 
unemployment shocks affect poverty and social exclusion; iii/ what fiscal cost arises from the 
automatic stabilisers embedded in national welfare systems.51 These simulations do not aim to 
predict  a  specific  crisis.  Instead,  they  illustrate  how  existing  policy  systems  would  respond 
under stylised recession scenarios. 

The analysis provides a comparable assessment of how national welfare systems cushion 
income  losses  during  labour-market  downturns.  It  relies  on  the  EUROMOD  tax/benefit 
microsimulation model to simulate how two hypothetical unemployment shocks would affect 
household incomes, poverty risks and public finances across the EU-27.52 The simulations are 
carried out using the EUROMOD microsimulation model with 2025 policy systems and best-
match EU Statistics on Income and Living Conditions (EU SILC) microdata. The model applies 
national  tax and benefit  rules to  household-level  data to  estimate how labour-market  shocks 

51 The scenarios presented here however do not account for the positive macro-economic impact of the effect of 
automatic stabilisers. 
52 Bornukova, K., Riera Mallol, G., ’How Resilient Are EU Welfare Systems to Unemployment Shocks? A Stress-
Testing  Exercise  across  27  Member  States’,  JRC  Working  Paper  Series  on  Taxation  and  Structural  Reforms, 
European Commission, Seville, May 2026 (forthcoming), JRC146422. 

30 

 
 
 
 
affect disposable incomes. The shocks are implemented through a reweighting method (also 
see box 2).53 

Box 2 – Considerations on simulating an unemployment shock 

The  reweighting methodology used  in  this  exercise allows to  perform  an  analysis  of the  impact  of hypothetical 
unemployment  shocks  on  welfare  systems,  but  the  limitations  of  the  methodology  constrain  the  depth  of  the 
analysis.  In  particular, 
the  exercise 
cannot completely capture  benefit  entitlement  dynamics,  benefit  exhaustion,  or  the potential heterogeneity  of 
newly unemployed workers’ characteristics. 

transitions  means 

individual-level 

to  model 

inability 

that 

the 

An extension that would include transitions from unemployment to inactivity would substantially strengthen the 
analysis, capturing prolonged downturns that would lead to benefit exhaustion and labour market withdrawal. A 
two-year scenario in which the unemployment shock persists and a share of the unemployed transition to inactivity 
would capture the role of minimum income schemes and social assistance as a second layer of protection after 
unemployment  insurance  entitlements  are  exhausted.  To apply the  inactivity  extension, the Labour Market 
Adjustment  (LMA)  approach  should  be  adopted.  It  factors  in  transitions  of  selected  employed  persons  into 
unemployment (and subsequently into inactivity), recalculating their benefit entitlements and household incomes. 
This  enables  a  much  richer  analysis: 
individual-level  net  replacement  rates,  proper  counterfactual 
income stabilisation by quintile and the identification of protection gaps for particular household types. Previous 
work demonstrates the feasibility of LMA-based stress testing across all EU Member States using the EUROMOD 
framework.54  

The stress testing shows that the impact of unemployment shocks on poverty and social 
exclusion  varies  greatly  across  Member  States  from  one  to  double,  highlighting  the 
importance of the design of the welfare systems. At EU level, the at-risk-of-poverty or social 
exclusion rate (AROPE) rises by 1.1 ppt on average under the moderate shock and 2.3 pp under 
the severe shock. All three components of the AROPE indicator would worsen (see table). The 
largest  increase  is  observed  in  the  people  living  in  very  low  work  intensity  households 
component,  which  responds  most  directly  to  the  labour-market  shock.  Country-level  results 
(Figure  2)  show  considerable  heterogeneity.  Under  the  severe  shock,  the  AROPE  increase 
ranges from approximately 1.6 p.p. in Luxembourg and Poland to over 3 p.p. in Slovakia. These 
differences  reflect  both  the  structure  of  the  underlying  social  protection  systems  and  the 
baseline composition of the population at risk. 

53 This  method  adjusts  the  statistical  weight  of  individuals  in  the  microdata  so  that  the  overall  labour-market 
composition reflects the target increase in unemployment. It allows cross-country comparison but has limitations. 
In particular, it does not simulate actual individual transitions from employment into unemployment, and it does 
not recalculate benefit entitlements based on new employment histories. Despite these limitations, the approach 
provides a robust and transparent estimate of the income-cushioning capacity of tax/benefit systems across the EU. 
54  Eichhorst,  W.,  Bonin,  H.,  Krause-Pilatus, A.,  Marx,  P.,  Dolls,  M.  and  Lay,  M.,  ’Minimum  Income  Support 
Systems as Elements of Crisis Resilience in Europe’, IZA Research Report, No. 615., 2024. 

31 

 
 
 
 
 
 
 
Table 1 –Impact of unemployment shocks on AROPE in the EU 

Moderate shock (+2 
p.p. unemployment) 
+1.16 pp 
+0.87 pp 
+0.42 pp 
 + 0.93pp 

Severe shock (+4 p.p. 
unemployment shock) 
+2.3 pp 
+1.76 pp 
+ 0.82 pp 
+1.88 pp 

At risk of poverty or social exclusion  
 At-risk-of-poverty rate (anchored)  
 Severe material and social deprivation  
 Very low work intensity  
Source: EUROMOD microsimulation with 2025 policy systems and EU-SILC microdata. AROP is computed 
using a fixed (anchored) poverty threshold. The at risk of poverty rate anchored in time corresponds to the usual 
poverty rate where the poverty threshold remains frozen at the levels before the shock hits. 

Figure 2 – Impact of unemployment shocks on AROPE in the Member States (p.p change) 

Source: EUROMOD microsimulation with 2025 policy systems and EU-SILC microdata. AROP is computed 
using a fixed (anchored) poverty threshold. *RO results are unreliable due to a low share of unemployed in EU-
SILC dataset. 

The  impact  of  the  tax/benefit  systems  can  be  measured  using  the  income  stabilisation 
coefficient,  which  captures  the  share  of  the  market-income  shock  absorbed  by  taxes  and 
transfers. At EU level, automatic stabilisers absorb around 44% of the market-income shock 
under both scenarios, which is broadly consistent with previous estimates.55 In practice, this 
means that when market income falls by one euro, household disposable income falls by only 
around  56  cents.  There  is  substantial  cross-country  variation.  Strong  stabilisation  can  be 
observed in Belgium (61%), Denmark (54%), Finland (54%) and Germany (52%). At the other 
end,  stabilization  is  low  in  Bulgaria  (17%  of  the  shock).  These  results  closely  mirror  the 

55 Dolls, M., Fuest, C. and Peichl, A., Automatic stabilizers and economic crisis: US vs. Europe, Journal of Public 
Economics, 96(3-4), 279–294., 2012. And Eichhorst, W., Bonin, H., Krause-Pilatus, A., Marx, P., Dolls, M. and 
Lay, M., ’Minimum Income Support Systems as Elements of Crisis Resilience in Europe’, IZA Research Report, 
No. 615., 2024. 

32 

 
 
 
 
 
 
 
organization  of  welfare  states.  Nordic  and  Continental  European  countries  characterised  by 
generous  unemployment  insurance,  progressive  taxation,  and  comprehensive  means-tested 
transfers also provide the strongest cushioning. Southern and Eastern European countries, with 
less  generous  replacement  rates  and  shorter  benefit  durations,  absorb  a  smaller  share  of  the 
income loss. 

The cushioning effect has a fiscal cost. During a downturn, governments collect less revenue 
from taxes and social contributions and at the same time pay out more benefits. Across the EU-
27, the fiscal cost of the moderate shock is estimated at around 0.56% of GDP. Under the severe 
shock, the cost rises to around 1.12% of GDP. Most of this comes from lower tax and social 
contribution  revenue,  which  accounts  for  roughly  three  quarters  of  the  total  cost.  Increased 
benefit  expenditure  accounts  for  the  remaining  quarter.  The  fiscal  effects  vary  significantly 
across Member States. Under the moderate shock, it reaches 0.76% of GDP in Belgium, 0.68% 
in Germany and 0.67% in France. By contrast, the impact is around 0.26% of GDP in Ireland 
and Bulgaria. These differences reflect both the structure of tax systems and the design of the 
benefit systems. Higher cushioning, on average, is associated with higher fiscal costs. 

Stress testing price shocks 

A sudden and severe price shock is another type of shock that is relevant to consider for 
the stress-testing of welfare systems. Such shock – if not mitigated – would likely result in a 
substantial drop in households’ real incomes (even more if wages and benefits do not adjust to 
inflation), resulting in a drop in their purchasing power. Welfare (and tax) systems can however 
help to mitigate such a drop, for instance if certain types of social benefits are automatically 
indexed56 or if (income) tax brackets adjust to inflation. It is therefore important to know to 
what extent such systems can indeed help to mitigate a loss of purchasing power. In such stress-
testing analyses, it is also relevant to factor in the “distributional impacts of inflation”, reflecting 
the effects of a price shock on purchasing power will likely differ between different population 
groups (depending on which consumption items experience the largest price increases and on 
the various consumption patterns along the income distribution).57 

Price  shocks emerged as  a  distinct  focus  for  welfare  stress-testing  primarily  after  the 
2021–23  inflation  surge  which  affected  more  lower  income  households.  Amores  et  al. 
(2025) used EUROMOD with a consumption tax extension to assess the distributional impact 
of the 2022 euro-area inflation episode, finding that the shock was regressive — lower-income 
households, who spend a larger share of income on essentials, faced proportionally larger real 
income  losses.  Country responses  varied considerably  in both  size  and  design:  Greece  spent 
around  2.5%  of  GDP  on  price-related  measures,  while  Portugal  achieved  a  comparable 
distributional outcome at less than half the fiscal cost by targeting income transfers rather than 
broad price subsidies. It appeared that targeted transfers dominate broad price subsidies in terms 

56 Not necessarily exactly matching the rise in prices (inflation) but at least somehow taking this rise into account 
for increasing the amounts of benefits.  
57 E.g. the share of income spent on certain items differs between lower-income and higher income households. 
33 

 
 
 
of adequacy protection per euro spent.58 The earlier automatic stabiliser literature (Dolls, Fuest 
and Peichl, 2012) provided the methodological benchmark, showing that EU systems absorb 
around 38% of a proportional income shock through automatic tax/benefit responses. However, 
this  framework  designed mainly for income  and  employment  shocks,  cannot  be  directly 
extended  to  analysis  of  price  shocks because  a  pure  price  shock  leaves  nominal  incomes 
unchanged, income tax liabilities and unemployment insurance do not automatically adjust, and 
the standard stabilisation coefficient is close to zero (see box 3). 

Box 3 – Limitations and avenues in stress testing price shocks 

Several  gaps  are  present  in  existing  analyses.  First,  existing  studies  measure  the  distributional  impact  of  price 
shocks  and  of  fiscal  responses,  but  do  not  break  it  down  into  its component channels  —  automatic  responses, 
existing  indexation rules  and  discretionary  measures.  This makes  it  difficult  to  assess  how  much  protection  is 
structural  (built  into  the  system)  versus  the  result  of  ad  hoc  political  choices.  Second,  the  automatic  stabiliser 
concept does not transfer directly. Classical stabilisers respond to nominal income changes; a price shock with 
rigid wages produces almost no automatic response. The system is structurally blind to real income losses unless 
benefits or tax parameters are formally indexed to prices, and existing cross-country analyses have not yet built a 
comparable “stabilisation coefficient” for price shocks. Building on EUROMOD and its consumption tax tool and 
consumption data, a more complete framework could help isolate each buffering mechanism. 

2.2.6. Megatrends impacting poverty 

Poverty  developments  are  affected  by  major  ongoing  megatrends  in  Europe  –  in 
particular  digitalisation,  climate  change,  and  demographic  change.  These  forces  are 
reshaping  labour  markets,  welfare  systems  and  access  to  opportunities,  producing  new 
vulnerabilities and shifting poverty patterns across regions and social groups. Each trend has 
both the potential to reduce poverty through economic opportunity and innovation, but also to 
intensify social exclusion if not managed inclusively.59 

Digitalisation is reshaping European economies, influencing how individuals work, learn, 
and access services. Digitalisation offers major opportunities for EU economies by boosting 
productivity, innovation,  and global competitiveness  across sectors.  The  adoption of digital 
technologies leads to an increase in firms’productivity, but these gains could be larger than they 

WP/22/262, 

58 See for instance: International Monetary Fund, ’Fiscal policy measures in response to the energy and inflation 
shock  and  climate  change; Targeted,  Implementable,  and  Practical  Energy  Relief  Measures  for  Households  in 
Europe’, 
https://www.imf.org/-
/media/files/publications/wp/2022/english/wpiea2022262-print-pdf.pdf  or  European  Commission:  Directorate 
General Economic and Financial Affairs, ’Energy measures to attenuate the impact of the current spike in energy 
prices:  Note  to  the  attention  of  the  Eurogroup’,  Brussels,  26  March  2026,  26-03-2026-eg_draft-note-energy-
measures.pdf 
59 European Commission, Directorate-General for Employment, Social Affairs and Inclusion, ’Employment and 
Social Developments in Europe 2023: Addressing labour shortages and skills gaps in the EU’, Publications Office 
of the European Union, Luxembourg, 2023, https://op.europa.eu/webpub/empl/esde-2023/esde-review.html. 

December 

2022, 

34 

 
 
 
 
have been until now if institutions, policies and worker skills are adapted in order to promote 
and ease the diffusion of digital technologies among firms.60 

However, it can also exacerbate structural inequalities, particularly in terms of digital skills. In 
the EU, 46% of adults lack basic digital skills, a figure that rises sharply in Bulgaria, Romania, 
and Italy to over 70%.61 Special attention should be given to vulnerable groups, who might need 
support to acquire the necessary digital skills to benefit from the digital evolution. The rural–
urban  digital  divide  persists,  especially  in  Eastern  and  Southern  Europe,  where  broadband 
coverage and digital training are limited. In this regard, digitalisation can bring opportunities in 
rural and remote areas, some of which face significant challenges  related to unaffordable or 
unavailable services. There are also challenges related to digital skills, there are 15pp between 
urban  and  rural  areas  of  individuals  with  at  least  basic  digital  skills.62  New  and  complex 
challenges are arising, in the context of a rapidly evolving labour market, featuring  automation, 
which displaces routine jobs: 14% of EU jobs are at high risk of automation and another 32% 
are at significant risk of transformation63, and the impact of AI. Digital technologies including 
artificial intelligence can be important engines of job creation and productivity but may also 
lead to sectoral disruptions, job displacement and further polarisation in the workforce between 
low- and high-skilled employees.64 

In  this  respect,  barriers  in  access  to  public  services  and  other  administrative  services  (e.g. 
banking, correspondence with various service providers such as healthcare providers or energy 
providers, etc.) – due to the increasing prevalence of “digital only” channels – should be closely 
and  regularly  monitored.  This  would  be  needed  to  avoid  some  parts  of  the  population  (e.g. 
people with low digital literacy or lack of access to digital tools) no longer being able to use 
such services. 

Digital  inequality  also  reinforces  labour  precarity  and  inequality.  Platform  work  has 
expanded rapidly in the EU, yet 55% of persons performing platform work are estimated to earn 
below  their  country’s  net  minimum  wage,  and  most  lack  access  to  sick  pay  or  pensions.65 
Without regulation, digitalisation risks creating a new “digital underclass” in low-paid, unstable 
employment. The use of AI in public administrations also needs to be carefully implemented, 
to avoid potential adverse consequences, for instance regarding the handling of application for 

of 

level 

digital 

’Individuals’ 

60  European  Central  Bank,  ’A  report  by  the  ESCB  expert  group  on  productivity,  innovation  and  technological 
change’, 2024. 
61 European Commission, ’Digital Economy and Society Index (DESI)’, 2023. 
62  Eurostat, 
2021 
https://doi.org/10.2908/isoc_sk_dskl_i21 
63  Nedelkoska,  L.  and  Quintini,  G.,  ’Automation,  Skills  Use  and  Training,  OECD  Social,  Employment  and 
Migration Working Paper’, No. 202,  OECD Publishing, Paris, 2018. 
64 European Commission: Directorate-General for Employment, Social Affairs and Inclusion, ’Labour Market and 
Wage Developments in Europe - Annual review 2024’, Publications Office of the European Union, Luxembourg, 
2024. 
65  Commission Staff Working Document SWD/2021/396 final of 9 December 2021 Impact Assessment Report 
accompanying the Proposal for a Directive of the European Parliament and of the Council on improving working 
conditions in platform work. 

onwards)’, 

dataset, 

2026, 

(from 

skills 

35 

 
 
 
support in public employment services or of the application to social benefits.66 At the same 
time,  resource-constrained  public  organisations  can  better  serve  the  public  with  improved 
digital workflows. 

AI also raises specific risks for people already in vulnerable situations that may lack digital 
literacy  and  face  barriers  to  accessing  AI-enabled  services.  At  the  same  time,  automated 
decision-making can perpetuate discrimination and social bias. The EU Fundamental Rights 
Agency has documented cases where algorithmic systems used in fraud detection or policing 
wrongly  penalised  low-income  and  migrant  families,  with  severe  financial  and  social 
consequences.67  Moreover,  while  AI  in  social  protection  and  banking  may  bring  important 
benefits, such as improving benefit allocation, reducing administrative burdens, and expanding 
financial inclusion through tailored services, groups in vulnerable situations who rely more on 
welfare and basic financial services remain at risk of digital, economic, and social barriers that 
can amplify the impact of errors or biases in automated systems. 

While climate change poses serious risks, the transition to address it creates important 
opportunities.  Investment 
low-carbon 
technologies can drive innovation, industrial transformation, and job creation. 

in  renewable  energy,  energy  efficiency,  and 

However, climate change and environmental degradation have clear social consequences 
in  Europe.  Low-income  households  face  greater  exposure  to  floods,  heatwaves  and  energy 
price shocks, especially in Southern Europe and the Baltic States.68 They are disproportionately 
affected  by  pollution,  as  well  as  by  biodiversity  loss  and  the  degradation  of  natural 
environments, while often depending more directly on the latter for their livelihoods. Climate 
extremes can disrupt essential services such as energy, water, sanitation and water, lead to rising 
food and water prices, thus pushing vulnerable groups further into poverty and social exclusion. 
Socio-economic vulnerabilities also further limit the capacity to adapt to climate change due to 
financial  constraints.  The  shift  to  a  low-carbon  economy  under  the  European  Green  Deal 
presents opportunities for job creation in renewable energy and green technology—an estimated 
1  million  additional  EU  jobs  by  2030.  Yet  these  gains  are  unevenly  distributed,  and  some 
regions  face  rising  unemployment  due  to  coal  and  heavy  industry  decline.  Poland’s  Silesia 
region, Germany’s Lusatia, and Czechia’s Moravian-Silesian Region are among the EU’s most 
vulnerable areas, relying heavily on fossil-fuel employment.69 Without just transition measures, 
decarbonisation can create “transition  poverty”, where displaced workers fall into long-term 
unemployment.  In  this  context,  it  is  important  to  continue  the  momentum  created  by  the 
Recovery  and  Resilience  Facility  and  the  Just  Transition  Fund  (JTF)  and  strengthen  their 

66 European Commission, Directorate-General for Employment, Social Affairs and Inclusion, ‘European Network 
of Public Employment Services - Opportunities of AI within PES processes and services’, Publications Office of 
the  European  Union,  Luxembourg,  2025,  https://employment-social-affairs.ec.europa.eu/european-network-
public-employment-services-opportunities-ai-within-pes-processes-and-services_en. 
67  European  Union  Agency  for  Fundamental  Rights  (FRA),  Bias  in  algorithms  –  Artificial  intelligence  and 
discrimination, Publications Office of the European Union, Luxembourg, 2022, p. 32-35. 
68 European Environment Agency (EEA), Climate Change as a Threat to Poverty Reduction in Europe, 2022. 
69 OECD, ’Regions in Industrial Transition: Policies for a Climate-Neutral Economy’, OECD Publishing, Paris, 
2023. 

36 

 
 
 
implementation  to  support  the  economic  diversification  and  transition  towards  a  more 
sustainable economy. The JTF is supporting the Lusatian lignite mining area in Brandenburg 
that is particularly affected by the phase-out of lignite and the transition to a climate-neutral 
economy  with  an  EU  contribution  of  EUR  671  million.  Funding  aims  to  support  SMEs  to 
diversify and modernise their operations, to projects securing and developing skilled labour and 
lastly to the expansion of digital infrastructure as well as public transport services. 

Fossil  fuel  dependence  can  also  burden  poorer  households.  Rising  energy  prices  have 
contributed to energy poverty. Inability to keep homes warm affected 9.2% of EU citizens in 
2024, with  a wide geographical  disparity throughout  the EU.  Also, moving  to  a low-carbon 
economy requires investment and system changes that may raise energy, transport and housing 
costs, particularly for households already under financial pressure. When revenues from carbon 
pricing  are  redistributed  in  a  well-targeted  way,  they  can  offset  or  even  reverse  negative 
distributional effects. In addition, targeted investment support (for example, using revenues to 
subsidise  renewable  heating  systems  or  building  renovations)  can  reduce  reliance  on  fossil 
fuels, lower bills over time, and strengthen long-term resilience. 

Demographic change in the EU—particularly population ageing and migration—creates 
several economic opportunities despite its challenges. An older population can drive growth 
in the “silver economy,” increasing demand for healthcare, long-term care, and age-friendly 
goods and services, which in turn stimulates innovation and job creation. 

At the same time, an ageing and shrinking population may impact negatively social and 
economic sustainability and territorial cohesion. By 2026, the EU population will peak and 
gradually  shrink  over  the  coming  decades70,  losing  about  1  million  working-age  people 
annually until 2050. This will lead to a decline of 57.4 million in the working-age population 
by  2100,  and  the  old-age  dependency  ratio  will  rise  from  33%  in  2022  to  60%  by  210071, 
potentially worsening labour shortages. Already between 2014 and 2024, both the EU old-age 
and total dependency ratios increased by 5.6 pp (from 28.3% to 33.9%) and 5.2 pp (from 51.6% 
to 56.8%), respectively. 

While  migration  can  mitigate  these  shortages,  it  alone  cannot  offset  the  challenges. 
Although migration has boosted employment growth72, this effect does not substantially reduce 
the  pressures  on  welfare  systems  ensuing  from  the  shrinking  working-age  population.  In 
addition,  migrant  population  subgroups  tend  to  be  more  vulnerable  to  poverty  or  social 
exclusion (38.2% at EU level), especially young migrants aged 18-29 (40.6% at EU level), than 

70 Commission Communication COM/2023/577 final of 11 October 2023 on Demographic Change in Europe: A 
Toolbox for Action. 
71 Idem. 
72European Commission: Directorate-General for Employment, Social Affairs and Inclusion, ’Joint employment 
report 2026 – As adopted by the EPSCO Council on 9 March 2026’, Publications Office of the European Union, 
2026, https://data.europa.eu/doi/10.2767/1924784 and Migration, mobility and the EU labour market - Economy 
and Finance. 

37 

 
 
 
the native-born population.73 Migrants are often concentrated in low-wage and informal sectors 
and  can  face  labour  exploitation,  housing  exclusion  and  educational  segregation  for  their 
children, with the risk of fuelling intergenerational transmission of poverty. 

Demographic  change  also  creates  increasing  challenges  for  EU’s  territorial  cohesion.74 
The  demographic  transition  is  also  reshaping  societies  with  implications  for  younger 
generations’ access to housing, work and income, as well as for long-term care and healthcare. 
At the same time, in line with the European Commission Intergenerational Fairness Strategy, 
active  ageing,  intergenerational  knowledge  transfer  and  extended  economic  and  social 
participation  can  support  longer  and  healthier  lives.  With  investment  in  lifelong  learning, 
flexible work and age-friendly communities, demographic change can become an opportunity 
for all generations. 

73 European Commission: Directorate-General for Employment, Social Affairs and Inclusion, ’Employment and 
Social Developments in Europe 2025:  Unlocking the potential of people: promoting higher employment in the 
EU’, Publications Office of the European Union, Luxembourg, 2025. https://data.europa.eu/doi/10.2767/9505984  
74 Idem. 

38 

 
 
 
 
 
3. Who faces poverty in the EU and why 
To reduce and prevent poverty effectively, it is essential to understand its main drivers and how 
they impact different segments of the population.  

The chart below illustrates how AROPE has  evolved across main age groups  since 2007.  It 
highlights persistent generational disparities, with children facing higher and more volatile risk 
of poverty or social exclusion than the working-age population and how progress has varied 
over time, in response to economic cycles, labour market developments, and policy measures. 

Chart 14 – At risk of poverty or exclusion rate in the EU by main age groups (2007-2025) 

Note: The definition of the AROPE rate differs between people aged under 65 and those aged 65 or over, as the latter 
excludes the very low work intensity component. 75 

Source: DG EMPL calculations based on Eurostat data, with series adjusted to neutralise the impact of breaks in 
time series over the period. The breaks in time series were treated as follows: when Eurostat’s results are flagged 
as “b”, indicating a break in time series, the change for that year is set be 0. This adjustment does not create fully 
a break-free series. The method is applied backwards in time, using EU-SILC 2025 (provisional estimates, see 
footnote on data source) as the starting point. 

75 Provisional figures for SILC 2025, which are based on SILC 2025 data for the 21 Member States for which this 
data had been published on 20/04/2026 and on SILC 2024 data for the remaining 6 Member States. 

39 

 
 
 
 
 
 
 
Beyond  age  differences,  AROPE  remains  highly  concentrated  among  specific  groups.  The 
unemployed,  inactive,  migrants,  the  low-skilled,  and  persons  with  disabilities  experience 
significantly higher risk. 

Chart 15 – At-risk-of-poverty or social exclusion (AROPE) rates by socio-demographic 
characteristic (%), EU, 2024. 

Notes: 2024 values refer to 2023 income reference period for all Member States. The definition differs for the 
AROPE rate of people aged less than 65 years and those aged 65 years or above as the latter excludes the Very 
Low Work Intensity component.  

Source: Eurostat (online data codes ilc_peps01n, ilc_peps06n, ilc_peps02n, ,ilc_peps04n, hlth_dpe010). 

3.1. Children 
Children are disproportionately  affected by poverty risks. In 202576,  24.3%  of children 
were AROPE, compared with 20.9% of the overall population, which amounted to 19.3 million 
children being AROPE. The number of children AROPE slightly increased between 2019 and 
2022 and only started to slightly decrease since then. This led to the number of children AROPE 
remaining,  overall,  broadly  stable  since  201977,  therefore  not  making  progress  regarding 
“moving towards the 2030 EU poverty reduction sub-target covering children”. 

76 Source: Eurostat data (SILC 2025, ilc_peps01n). 
77 Source: Eurostat data (SILC 2025, ilc_pecs01). 

40 

 
 
 
 
 
 
 
Among the 21 Member States which set national child poverty reduction targets, progress 
towards their achievement has been limited. While Ireland, Cyprus and Sweden reached their 
targets, the remaining Member States need to make additional efforts to do so. The incidence 
of child poverty varies greatly throughout the EU from less than 15% in Cyprus and Slovenia 
to more than 30% in Bulgaria, Spain and Romania. Together with Greece, the latter countries 
are also those in which child-specific material deprivation is also the highest. 

Children  growing  up  in  poverty  face  significant  disadvantages.  They  are  less  likely  to 
perform well in education, experience good health, and realise their full potential in adulthood. 
According to OECD estimates it takes 4-5 generations for children starting at the bottom of the 
income distribution to reach average income.78 Data indicates that adults aged 25 to 59 who 
experience  financial  difficulties  around  age  14  have  a  20%  risk  of  poverty,  compared  with 
12.4% for those who grew up in better financial conditions. In addition to the short- and long-
term impact of child poverty on individual outcomes, it also has a societal impact: according to 
OECD’s estimate79, its cost amounts to not less than 3.4% of lost GDP every year, just when 
considering the impact of childhood disadvantage on employment and health outcomes. 

Parental  income  is  a  primary  determinant  of  child  poverty,  stemming  from  barriers 
hindering  parents’  labour  market  integration  and  lack  of  adequate  income  support.  Besides 
lower employment rate, workers with children are more likely to experience in-work poverty 
than those without children in all but seven EU Member States in 2024. The impact of social 
transfers on reduction of children’s poverty risks has remained broadly stable on average in the 
EU, but with large country variations, ranging from around 20% in Spain and Romania to 60% 
in Finland. These variations reflect those of child benefits, which constitute one type of social 
transfers specifically supporting families’ income, as Spain and Romania’s child benefits also 
have among the lowest child poverty reduction effect.80 This large heterogeneity suggests scope 
for further upward convergence. 

Early access to key services helps mitigate the negative impact of growing up in poverty, 
essential  in  ensuring  equal  opportunities  and  breaking  the  cycle  of  intergenerational 
transmission of poverty. However, gaps in services’ access remain between children AROPE 
and  their  better  off  peers,  with  some  disparities  across  Member  States.  As  an  illustration, 
disadvantaged  children  often  face  multiple  barriers,  including  financial  (high  fees)  and 
non‑financial  barriers  (lack  of  availability,  accessibility,  adaptations  for  children  with 
disabilities, long waiting lists) to early childhood education and care (ECEC). In 2024, only 
24.4% of children under the age of 3 at risk of poverty or social exclusion were enrolled in 

78  OECD,  ’A  Broken  Social  Elevator?  How  to  Promote  Social  Mobility’,  OECD  Publishing,  Paris,  2018, 
https://doi.org/10.1787/9789264301085-en. 
79  Clarke,  C.,  Bonnet,  J.,  Flores,  M.  and  Thévenon,  O.,  ’The  economic  costs  of  childhood  socio-economic 
disadvantage  in  European  OECD  countries’,  OECD  Papers  on  Well-being  and  Inequalities,  No.  9,  OECD 
Publishing, 
https://doi.org/10.1787/8c0c66b9-en.https://www.oecd.org/en/publications/the-
economic-costs-of-childhood-socio-economic-disadvantage-in-european-oecd-countries_8c0c66b9-en.html. 
80 Bornukova, K., Hernandez, A., & Picos, F., ’Investing in children: The impact of EU tax and benefit systems on 
child poverty and inequality (No. 2/2024)’, JRC Working Papers on Taxation and Structural Reforms, 2024. 

2022, 

Paris, 

41 

 
 
 
ECEC,  compared  with  42.4%  of  their  peers  who  were  not  at  risk.81  The  socioeconomic 
participation gap for children under 3 has widened in most EU countries, highlighting the urgent 
need for targeted policy measures to ensure that ECEC systems are inclusive and accessible, 
particularly for families facing socio-economic challenges. This socioeconomic participation 
gap occurs also in other areas, ranging from education to nutrition, healthcare and housing.82  

Chart 16: Share of children below age 3 at risk of poverty or social exclusion (AROPE 
and not AROPE) participating in ECEC for one hour or more per week in 2024 (average 
of 2024 and 2023 shares in %) 

90

80

70

60

50

40

30

20

10

0

EU BE BG CZ DK DE EE IE EL ES FR HR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE

AROPE

Not AROPE

Note: The average rate of two years (average of rates from reference year and reference year-1) is used instead of 
the annual rate available in ilc_caindform25to increase the reliability of this indicator. No AROPE figures available 
for RO. 
Source: Eurostat (online data code ILC_CAINDFORM25B) (date of extraction – 03/12/2025) 

Lastly, certain groups of children face multiple and overlapping disadvantages — from a 
higher risk of poverty or social exclusion to lower take-up of key services — which can have 
long-lasting  effects  on  their  outcomes  later  in  life.  Around  77%  of  Roma  children  live  in 
households at risk of poverty – a stark disproportionality when contrasted with the general child 
population.  Due to  adverse experiences before and during care, coupled  with  an accelerated 
transition into adulthood and insufficient support during and after this transition83, children in 

81  European  Commission,  Directorate-General  for  Employment,  ’Social Affairs  and  Inclusion,  Monitoring  and 
benchmarking  frameworks’,  Social  Protection  Committee  –  Indicators’  Sub-Group,  2024,  https://employment-
social-affairs.ec.europa.eu/policies-and-activities/social-protection-social-inclusion/social-protection-
committee/indicators-sub-group/monitoring-and-benchmarking-frameworks_enhttps://employment-social-
affairs.ec.europa.eu/policies-and-activities/social-protection-social-inclusion/social-protection-
committee/indicators-sub-group/monitoring-and-benchmarking-frameworks_en?prefLang=fr. 
82 Social Protection Committee, ’NOTE OF THE SPC-ISG: Update of the monitoring framework for the European 
Child  Guarantee’,  Brussels,  26/05/2025,  https://webgate.ec.europa.eu/circabc-ewpp/ui/group/bab664d7-1188-
47b2-9fa6-869902320ba2/library/1263d2f9-f558-4e3f-a384-9e24da0883d1/details  
83 Fryar, G., E. Jordan and K. DeVooght, Supporting Young People Transitioning from Foster Care: Findings from 
a National Survey, 2017, https://www.childtrends.org/publications/supporting-young-people-transitioning-foster-
carefindings-national-survey;  Kääriälä, A.  and  H.  Hiilamo,  ’Children  in  out-of-home  care  as  young  adults: A 
42 

 
 
 
 
 
institutional  care  and  care  leavers  are  more  likely  to  have  lower  educational  outcome,  be 
unemployed or in precarious employment, earn lower salaries, and face an increased risk of 
poverty.84 Care leavers, including children leaving institutional care, are also overrepresented 
among the homeless.85 

3.2. Youth 

Young people in the EU face a disproportionately high risk of poverty or social exclusion. 
This is largely driven by youth unemployment, early school leaving, and disengagement from 
education or the labour market. In 202586, the AROPE rate for young people aged 16-29 years 
was 24.0%, 3.1 percentage points higher than the rate for the total population.87 Young people 
are also more likely to start their working career in low-paying jobs. The disadvantages facing 
young people have increased in recent years.88 

The youth unemployment rate (15-24 years old) is substantially higher than the overall 
unemployment rate. It stood at 15.2% in 202589 and remains a major barrier to young people 
achieving financial stability and avoiding poverty. In 2025, the share of young people aged 15-
29 who are neither in education, employment nor training (NEET) stood at 10.9% in the EU, 
but there are significant discrepancies in NEET rate among Member States, ranging from 5.3% 
in the Netherlands to 19.2% in Romania.90 These NEET rates reflect, among other issues, early 
school  leaving,  skills  mismatches,  multidimensional  barriers  to  integration  into  the  labour 
market (such as health issues), care responsibilities as well as insufficient access to employment 
opportunities. 

Young people’s access to the labour market can be determined by their socio-economic 
status. For young people from poor households, access to a first job may be further impaired 

systematic review of outcomes in the Nordic countries’, Children and Youth Services Review, Vol. 79, pp. 107-
114, 2017, https://doi.org/10.1016/J .CHILDYOUTH.2017.05.030. 
84  Stewart,  C.  et  al.,  ’Former  foster  youth:  Employment  outcomes  up  to  age  30’,  Children  and  Youth  Services 
Review,  Vol.  36,  pp.  220-229,  2014,  https://doi.org/10.1016/J.CHILDYOUTH.2013.11.024,  Hageleitner  et  al. 
(2022). 
85  SZN,  Factsheet  Zwerfjongeren  Nederland,  Stichting  Zwerfjongeren  Nederland,  2017;  Frechon,  I.  and  M. 
Marpsat, ’Placement dans l’enfance et précarité de la situation de logement’, Économie et Statistique, 488-489, 
2016,  https://www.insee.fr/fr/statistiques/2123144?sommaire=2123156;  Dworsky,  A.,  L.  Napolitano  and  M. 
Courtney, ’Homelessness during the transition from foster care to adulthood’, American journal of public health, 
Vol. 103 Suppl 2/Suppl 2, pp. S318-S323, 2013, https://doi.org/10.2105/AJPH.2013.301455. 
86 Source : Eurostat data (SILC 2025) 
87 When focusing in on certain AROPE components at EU level, it can be observed  that the severe material and 
social deprivation rate is slightly lower for the people aged 20-29 (at 5.4% in 2024) than for the total population 
(at 6.4% in 2024). However, the AROP rate is higher for people aged 20-29 (at 17.9% in 2024) than for the total 
population (at 16.2% in 2024). 
88 Ciccolini, G., Endrich, M., Nedee, A. And Natale, F., Intergenerational fairness in the EU: income and housing 
dynamics in the context of demographic change, Publications Office of the European Union, Luxembourg, 2025, 
https://data.europa.eu/doi/10.2760/6294128, JRC144437. 
89 Source: Eurostat (online data code une_rt_a). 
90 Source: Eurostat (online data code edat_lfse_20). 

43 

 
 
 
by  the  lack  of  information,  resources  and  networks  associated  with  low  levels  of  social 
integration. 

Participation in education has increased across the EU, also for young people at risk of 
poverty.  Average  EU  enrolment  rates  in  2023  in  higher  education  were  at  43.1%. 
Nevertheless,  socio-economic  background  remains  the  most  significant  determinant  of  a 
learner’s  educational  outcomes  and  attainment91,  as  it  shapes  learners’  access  to  quality 
resources and learning environments, influences family support and expectations, their health 
and  well-being,  and  the  quality  of  schools  they  attend,  thereby  generating  cumulative 
inequalities  that  affect  both  participation  and  achievement  in  education  over  time.  The  new 
2030 EU-level target on equity, suggested in the Interim evaluation of the 2021-2030 European 
Education Area strategic framework, states that the share of learners from disadvantaged socio-
economic backgrounds with a good achievement in at least one domain (reading, mathematics 
or science) should be at least 25%.92 However, only 16.3% of disadvantaged students reached 
this  level in  2022,  compared to 20.8% in 2018 and 21.1% in  2015.93 The  equity indicator94 
reveals a growing inequality in learning outcomes between young people with disadvantaged 
socio-economic backgrounds and their peers with advantaged socio-economic backgrounds, for 
whom  the  share  in  2022  reached  59.0%.  Main  drivers  are  school  segregation  and  unequal 
resource distribution.95 

In 2024, over 3 million 18-24-year-olds remain disengaged from education and training 
without having attained at least upper secondary education, even though the current EU 
average rate of early school leaving of 9.4%96 is approaching the 2030 EU-level target of below 
9%.97 Early school leaving reduces lifetime earnings, weakens resilience to economic shocks, 
and  heightens  the  risk  of  intergenerational  transmission  of  poverty.98  While  socio-economic 

91 European Commission, ‘Parental background shapes access to tertiary education’,  European Education Area, 
accessed 28 April 2026,  Parental background shapes access to tertiary education - European Education Area. 
92 European Commission: Directorate-General for Education, Youth, Sport and Culture, ’Interim evaluation of the 
2021-2030  European  Education  Area  strategic  framework  –  Report  from  the  Commission  to  the  European 
Parliament,  the  Council,  the  European  Economic  and  Social  Committee  and  the  Committee  of  the  Regions’, 
Publications Office of the European Union, 2025, https://data.europa.eu/doi/10.2766/2668196. 
93 Eurostat, EU Labour Force Survey 2024, 2024. 
94 Based on OECD’s PISA data, the indicator captures the outsized effect of learners’ socio-economic background 
on  one  of  the  lowest  thresholds  in  educational  achievement:  combined  underachievement  in  reading  and 
mathematics and science (here labelled ‘severe underachievement’). The indicator is detailed in the Education and 
Training Monitor 2022. 
95  European  Commission:  Directorate-General  for  Education,  Youth,  Sport  and  Culture  and  European  Expert 
Network on Economics of Education (EENEE), Patterns of school segregation in Europe – Executive summary, 
Publications Office of the European Union, 2021, https://data.europa.eu/doi/10.2766/501504. 
96 Source: Eurostat (online data code edat_lfse_14). 
97 European Commission, Directorate-General for Education, Youth, Sport and Culture, ’Education and Training 
Monitor 2023 – Comparative report’, Chapter 4, Publications Office of the European Union, Luxembourg, 2023, 
https://op.europa.eu/webpub/eac/education-and-training-monitor/en/comparative-report/chapter-
4.htmlhttps://op.europa.eu/webpub/eac/education-and-training-monitor/en/comparative-report/chapter-4.html. 
98 European Commission, Directorate-General for Education, Youth, Sport and Culture, ’Education and Training 
2022, 
Monitor 
https://op.europa.eu/en/publication-detail/-/publication/2f5457d7-3edb-11ed-92ed-01aa75ed71a1. 

Luxembourg, 

Publications 

European 

Union, 

2022’, 

Office 

the 

of 

44 

 
 
 
background  remains  the  largest  determinant  of  early  school  leaving,  other  factors  include 
ethnic, migrant or refugee backgrounds and disability. 

Access to and participation in higher education remain uneven, despite the expansion of 
tertiary educational attainment99 across the EU over the past decade. The share of 25–34-
year-olds holding a tertiary qualification increased from 36.5% in 2015 to 44.1% in 2024.100 
The average unemployment rate for this group, at 3.8%, remains significantly lower than for 
those with upper secondary or lower levels of education (respectively 5.5% and 11.8%). Socio-
economic  background  continues  to  influence  entry,  progression  and  completion  rates.101 
According to the Eurostudent102 survey, financial barriers, insufficient guidance and support 
services and limited outreach to under-represented groups contribute to unequal opportunities. 

High property prices and rents, an insufficient supply of affordable accommodation, the 
shortage of social housing and more limited financial means end up pushing many young people 
into  unaffordable,  overcrowded,  precarious  and 
their 
independence and participation in society, education and in the economy. 

inadequate  housing, 

limiting 

Pressures  of  unemployment,  lower  education,  and  social  exclusion  can  intensify  the 
mental health challenges young people face, creating a circle that can worsen both individual 
well-being  and  societal  outcomes.  Almost  half  of  young  people  reported  emotional  or 
psychological  problems  in  the  past  year,  with  global  events  like  the  COVID  pandemic  and 
geopolitical crises contributing to heightened stress levels.103 

3.3. Working-age population 

Employment remains the most effective and sustainable route out of poverty. Employment 
also promotes social inclusion, skills development, and access to contributory social protection, 
reinforcing resilience over the life course. Higher employment rates generally reduce poverty, 
though the magnitude depends on who benefits from new jobs.104 

99 The share of the population aged 25-34 years who have successfully completed tertiary education, an education 
level ISCED 2011 (International Standard Classification of Education) of 5 to 8. 
100 Source: Eurostat (online data code edat_lfse_03). 
101 Education and Training Monitor 2024. 
102  Hauschildt,  K.,  Gwosc,  C.,  Schirmer,  H.  and  Wartenbergh-Cras,  F.,  ’EUROSTUDENT  8  –  Synopsis  of 
Indicators‘,  DZHW  (German  Centre  for  Higher  Education  Research  and  Science  Studies),  Hannover,  2024, 
https://www.eurostudent.eu/download_files/documents/EUROSTUDENT_8_Synopsis_of_Indicators.pdf.  
103  UCL  Centre  for  Longitudinal  Studies  (CLS),  ’Almost  half  of  young  people  experiencing  mental  health 
problems‘,  23  November  2022,  https://cls.ucl.ac.uk/almost-half-of-young-people-experiencing-mental-health-
problems/https://cls.ucl.ac.uk/almost-half-of-young-people-experiencing-mental-health-
problems/?utm_source=chatgpt.com 
104  See  in particular Akarçeşme,  S.,  Cantillon,  B.,  Gábos, A., Nolan,  B.,  & Tóth,  I.,  ’Simulating  the Impact  of 
Employment Growth on Poverty: Implications for the European Social Targets’, Social Inclusion, 13, Article 9903, 
2025, https://repository.uantwerpen.be/docman/irua/72836cmotoM42, or Marx, I., Vandenbroucke, P., & Verbist, 
G., Can higher employment levels bring down relative income poverty in the EU? Regression‐based simulations 
Journal  of  European  Social  Policy,  22(5),  472–486,  2012, 
of 
https://doi.org/10.1177/0958928712456577. 

the  Europe  2020 

target, 

45 

 
 
 
The  EU  is  on  track  to  meet  its  2030  target  of  having  78%  of  people  aged  20-64  in 
employment.  In  the  last  year,  labour  force  and  employment  improvements  have  largely 
benefitted from increased participation by migrants, women and older individuals who however 
still  have  below  average  employment  rates.  Simulations  suggest  that  meeting  2030  national 
employment targets could lower monetary poverty by around 1 percentage point on average, 
with stronger impacts (1.5 - 1.9 percentage points) in countries starting from lower employment 
levels.105 If job creation primarily benefits households with low work intensity, the reduction 
could  reach  around  5  percentage  points106,  highlighting  the  need  for  targeted  activation 
strategies to help those furthest from the labour market. 

Yet labour market participation is not always sufficient to escape poverty. Addressing in-
work poverty remains a challenge to ensure a sustainable decline of people at risk of poverty or 
social exclusion in the EU. In 2024, the in-work poverty rate was 8.2%107, slightly improving 
over the last decade (-1.5 pp between SILC 2014 and 2024).108 In-work poverty is higher among 
people in non-standard forms of employment, which may be related to lack of access to certain 
branches that replace income in case of unemployment or sickness. In 2025, 18 Member States 
witnessed gaps for at least one group of non-standard workers in at least one branch of social 
protection, most often unemployment, sickness and/or maternity benefits. 

Unemployed  persons  face  much  higher  risk  of  poverty  or  social  exclusion.  In  2024,  the 
unemployed  remained  the  group  with  the  highest  levels  of  the  severe  material  and  social 
deprivation  rate,  at  23.7%  in  the  EU-27,  and  66.6%  of  the  unemployed  were  in  AROPE, 
compared  with  just  10.9%  of  employed  people.  This  is  particularly  the  case  for  long-term 
unemployed, for which it rises to 73.2%109. The long-term unemployed are also more likely to 
be overburdened by the cost of housing, and to have unmet needs for medical care. In many 
countries, the net replacement rate (proportion of previous in-work income received through 
benefits) drops dramatically as people become long-term  unemployed.  For the unemployed, 
entering  employment is  found to increase their chances of exiting poverty by 33 percentage 
points among men, and 30 percentage points among women. 

Half the population experiencing poverty aged less than 65 live in households with low or 
very low work intensity. Alongside the lack of adequate wages, low work intensity - whether 
measured in terms of months worked annually or hours worked weekly - is also among the main 
variables causing in-work poverty. Poverty rates are lower than 5% for very high work intensity 
households, around 20% for medium work intensity and around 60% for households with very 
low work intensity. Undeclared work plays a role in increasing the risk of poverty for those 

105 Bornukova, K., Depoortere A., Leventi, C., Manso L., Mazzon, A., Papini, A., ’Reducing AROPE in the EU: 
combining  minimum  income,  minimum  wages,  and  employment  expansion’,  JRC  Working  Paper  Series  on 
Taxation and Structural Reforms, European Commission, Seville, March 2026, JRC146407. 
106 See Akarçesme and al (2025). 
107 Source: Eurostat (online data code ilc_iw01). 
108 The in-work poverty rate is defined as the share of people in employment aged 18-64 who live in a household 
whose equivalised disposable income is below 60% of the national median. 
109 SILC 2024 figure. 

46 

 
 
 
with  low  work  intensity,  as  informal  working  arrangements  are  often  associated  with 
inconsistent  employment  and  gaps  in  working  time,  inadequate  protection  from  sudden 
dismissal and no income security during periods of inactivity. 

Chart  17  -  At-risk-of-poverty  rate  and  share  in  total  at-risk-of-poverty  population  of 
persons aged 0-64, by work intensity110 of their household (EU27, SILC 2024) 

Source - DG EMPL calculations. 

The persistence of undeclared work remains a challenge.  Informal employment can be a 
livelihood strategy for poor people. It provides a source of income when no formal opportunities 
are available. However, it typically puts workers in weaker negotiating positions towards their 
employers, thus exposing them to exploitative and dangerous working conditions, lower pay 
and  wage  insecurity  and  a  lack  of  access  to  social  protection.  For  2019,  estimates  point  to 
undeclared labour making up 9.7% of total labour input in the EU (compared with 10.2% in 
2013), accounting for 14.6% of private sector GVA (14.9% in 2013).111 Certain sectors exhibit 
higher numbers of undeclared workers: personal services such as childcare, elderly care and 

110 The work intensity of a household is the ratio (0-1) of the total number of months that all working-age household 
members  have  worked  during  the  income  reference  year,  and  the  total number  of  months  the  same  household 
members theoretically could have worked in the same period. 
111 European Labour Authority, ’Extent of undeclared work in the European Union‘, 2023. 

47 

 
 
 
 
 
 
 
domestic work (27%), construction (19%), hospitality (17%), retail or repair services (10%) 
and agriculture (6%).112 

The risk of in-work poverty is also shaped by household characteristics. The number of 
dependent individuals living in the household or the presence of persons with disabilities also 
play a decisive role. This is why single-parent households and large families, with three or more 
dependent  children113  or  with  family  members  in  need  of  care  or  support,  are  particularly 
vulnerable.114 

A  large  proportion  of  working-age  adults  is  not  participating  in  the  labour market.  In 
2024, 69.8 million people aged 16–64 were outside the labour force and poverty is high among 
the inactive (43%). The majority of those outside the labour force are women. In 2024, around 
41.5  million  women  aged  15–64  in  the  EU-27  were  not  participating  in  the  labour  market, 
accounting for 59.4% of all people outside the labour force. 

Women face specific barriers to entry into the labour market. The uneven distribution of 
care  and  domestic  responsibilities  at  the  household  level  is  a  major  factor  driving  female 
inactivity, with 75% of mothers of young children reporting family and care responsibilities as 
reasons  for  their  non-participation.115  The  design  of  tax  benefit  systems  can  compound  and 
exacerbate these obstacles, when tax and benefit withdrawal threshold are set so as to penalise 
second earners entering the labour market, creating inactivity traps.116 Persisting discrimination 
and  stereotypes  are  also  holding  back  women  from  joining  the  workforce,  especially  in 
traditionally male-dominated sectors.117 

Difficulties  in accessing good quality education and lower take-up of skill  development 
and training are also considered a driver of inactivity, especially for people who are seeking 
to enter the labour market for the first time, such as the youth and migrants. Working-age adults 

112 European Commission, Directorate-General for Employment, Social Affairs and Inclusion and co-ordinated by 
the  Directorate-General  for  Communication,  ’Special  Eurobarometer  498.  Undeclared  Work  in  the  European 
Union‘, Survey requested by the European Commission, 2020. 
113 In the context of EU-SILC, dependent children are defined as individuals aged 0-17 years and 18-24 years if 
inactive and living with at least one parent. 
114 Since the at-risk-of-poverty status of a person is determined by considering the income of her whole household, 
the absence of other wage earners in a household thus tends to lead to a higher in-work poverty rate for a single-
adult  household  compared  to  a  multiple-adult  household  (where  all  adults  would  be  employed). As  well,  the 
presence of dependent children (which number influences the equivalised disposable income at individual level) 
therefore  tends  to  lead  to  a higher  in-work  poverty  rate  for  single  parents  compared  to single  persons  without 
dependent children. 
115 European Commission: Directorate-General for Employment, Social Affairs and Inclusion, ’Employment and 
the  European  Union,  2025, 
social  developments 
https://data.europa.eu/doi/10.2767/9505984. 
116 European Commission: Directorate-General for Employment, Social Affairs and Inclusion, ’Joint Employment 
Report 2025 – As adopted by the EPSCO Council on 10 March 2025‘, Publications Office of the European Union, 
2025, https://data.europa.eu/doi/10.2767/9542551. 
117 Data shows that women are less likely to be affected by in-work poverty than men (7.3% vs. 9%), but this is 
rather due to the fact that poverty is measured at the household level and women are more likely to be the second 
contributor to household income. European Commission: Directorate-General for Employment, Social Affairs and 
study  of  national  policies,  Publications  Office, 
Inclusion, In-work  poverty 
2019, https://data.europa.eu/doi/10.2767/31835. 

in  Europe  2025‘,  Publications  Office  of 

in  Europe  –  A 

48 

 
 
 
with lower levels of education are more likely to be outside the labour force than those with 
higher qualifications. In 2024, 32.5 million people aged 15–64 who were not in the labour force 
in the EU-27 had a low level of education (ISCED levels 0-2). At the same time, lower-income 
adults report significantly lower participation rates in education and learning, pointing to socio-
economic  barriers  to  participation.118  Among  all  adults  who  would  want  to  participate  in 
education and learning activities, the main obstacles highlighted have to do with financial costs 
of  participation,  or  conflicts  with  working  and  family  responsibilities,  which  point  to  the 
potential of enhancing accessibility.119 

Digital skills levels also show significant inequalities across socio-economic groups. The 
DESI indicators120 show that in 2023, the gap in at least basic digital skills between individuals 
with high formal education and those with little or no formal education was 46.2 percentage 
points.121 Age is another strong determinant: the gap between younger (16–24) and older (65–
74) adults stands at 41.8 percentage points. A Joint Research Centre study identifies multiple 
vulnerable  profiles  at  risk  of  lacking  basic  digital  skills.  Young  people  with  low  education 
attainment, manual workers and those unemployed or outside the labour market, all face a high 
likelihood to lack basic digital skills.122 

3.4. Older people  
In 2025123, almost one in five (18.8%) people aged 65 or above were at risk of poverty or 
social exclusion. While there are large differences among countries, this represents a decrease 
compared with  2022 (20.2%) and 2019  (19.9%). However, in  absolute terms the number of 
older people in AROPE has showed an upward trajectory since 2019 as the share of old people 
is increasing because of growing longevity. Following the projected growth in the population 
aged  65  or  above  in  the  coming  decades,  this  trend  is  likely  to  continue,  even  if  adequate 
pensions and access to affordable high-quality services can contain poverty risks. 

Despite  positive  developments,  older  women  still  face  higher  risk  of  poverty  or  social 
exclusion than men in all Member States. In 2024, 21.5% of women aged 65 or above were 
in AROPE, compared with 16.3% of men in the same age group. The risk remains even higher 
for women in advanced old age, despite relative improvement - in 2024, 22.8% of women aged 

learning  – 

118 OECD (2025),  ’Trends in Adult Learning: New Data from the 2023 Survey of Adult Skills‘, Getting Skills 
Right, OECD Publishing, Paris, https://doi.org/10.1787/ec0624a6-en. 
119  Eurostat,  Statistics  Explained:  Adult 
reasons 
https://ec.europa.eu/eurostat/statistics-explained/SEPDF/cache/134706.pdf. 
120  European  Commission,  ’Digital  Decade  DESI  indicators‘,  dataset/visualisation  tool,  2025,  https://digital-
decade-desi.digital-strategy.ec.europa.eu/datasets/desi/charts/desi-indicators. 
121 The 2025 Education and Training Monitor also picks up on the correlation between socio-economic background 
and computer and information literacy, see p. 29 Education and Training Monitor 2025. 
122  Joint Research Centre, Bertoni, E et al, JRC Publications Repository - Digital skills gaps - a closer look at the 
Digital  Skills  Index  (DSI  2.0),  2025,  https://publications.jrc.ec.europa.eu/repository/handle/JRC140617.  The 
findings are based on a multivariate analysis conducted by the Joint Research Centre (JRC) examining the Digital 
Skills Indicator and the specific competencies it measures. 
123 Source : Eurostat data (SILC 2025) 

for  not  participating,  2024, 

49 

 
 
 
 
75 and above in the EU were AROPE. Being more often single in old age, with related higher 
costs, further increases the poverty risk for women compared to men. 

Even though on a downward trend, the average gender pension gap (for 65-79) was 24.8% 
at  EU  level  in  2024124,  meaning  that  women  got  pensions  which  are  on  average  about  one 
fourth lower than that one of men. A higher number of women also receive no income from 
pensions at all, compared with men (4.8% gender pension coverage gap in the EU in 2024 for 
the same age group125). These gaps have their roots in accumulated differences along women’s 
professional career: average lower pay, often in lower-paid, gender-segregated sectors such as 
social  care  sector,  more  part-time  work  and  shorter,  interrupted  or  never  started    careers, 
including due to care obligations. Lower financial literacy can also hamper women’s retirement 
planning, calling for financial education and pension transparency measures. 

Pension replacement rates are projected to significantly decrease in most Member States 
over the next forty years.126 The aggregate replacement ratio for pensions in the EU has been 
broadly stable over the last decade, standing at 60% on average in 2024.127 Looking forward, 
though, the decline will be more than 20 percentage points for a similar career in some cases, 
which is likely to push more pensioners below the poverty line. 

Together with pension adequacy issues, old-age poverty  risk  is  also  linked to changing 
household composition, including survivorship. Older people whose children have left may 
find themselves in housing no longer adapted for their needs, while higher life expectancy in 
conjunction with lower pensions may expose women to particularly high poverty risks. While 
these  changes  are  driven  by  different  factors,  they  all  contribute  to  cost  pressures  on  older 
households.  Furthermore,  the  consumption  patterns  of  older  people  differ  from  younger 
population, meaning they can be more exposed to rapid increases in food or energy prices, in 
particular older people with low incomes.128 

The need for health care and long-term care tends to increase with age and is associated 
with higher poverty risks, notably for those with severe needs. Deeper into old age (people 
aged  75  or  over),  covering  care  needs  becomes  a  critical  social  challenge.  Without  public 
support, the costs of LTC for older people would be unaffordable in most countries. The costs 
of LTC can pose a substantial financial challenge for older people, often representing a large 

124 Source: Eurostat (online data code ilc_pnp13). 
125 Source: Eurostat (online data code ilc_pnp14). 
126  Replacement  rates  are  projected  using  the  methodology  of  Theoretical  Replacement  Rates  (See  Pension 
Adequacy Report 2024), while Aggregate Replacement Ratios are based on EU-SILC. 
127 Source: Eurostat (online data code ilc_pnp3). 
128  European  Commission:  Directorate-General  for  Employment,  Social  Affairs  and  Inclusion  and  Social 
Protection Committee, ’The 2024 Pension Adequacy Report: Current and future income adequacy in old age in 
the EU‘, Volume I, Publications Office of the European Union, Luxembourg, 2024, https://doi.org/10.2767/909323 
https://data.europa.eu/doi/10.2767/909323 

50 

 
 
 
portion  of  their  disposable  income.  Poverty  risks  for  people  with  LTC  needs  remain 
substantially higher than for older people in general.129 

Old age poverty goes indeed beyond income alone as older people are more vulnerable to 
multidimensional deprivation.130 Research based  on SHARE data between 2011 and 2022 
highlights  significant  and  persistent  disadvantages  among  older  Europeans,  particularly  in 
Southern and Eastern European countries, where many face multiple, overlapping challenges 
across different dimensions: social participation, independent living, and the capacity to age 
healthily. About 4.4% of older individuals are simultaneously disadvantaged across multiple 
areas of well-being, while nearly one in four (22.74%) fall below the median. Disadvantages 
over the years show that older individuals in the lowest level of well-being in 2015 experienced 
limited upward mobility by 2021/2022.131 In contrast, those who started at the top were more 
likely to remain there. 

Socioeconomic inequalities in life expectancy are a challenge for pension policies, which 
may  need  to  adjust  retirement  pathways  for  different  career  profiles  to  prevent  the 
building  of  inequality,  as  underscored  in  the  Pension  Adequacy  Report  2024.  The  way  in 
which inequality in labour earnings translates into pension inequality depends largely on the 
progressivity of the pension system. While pension systems protect those in need, gaps remain. 
Pensions for the self-employed are projected to be on average a third lower than those of full-
time employees with  a similar career, among  other things due to  differences in  rules and in 
average earnings. 

3.5. Women and single parents 
The  AROPE  rate  in  2025132  was  higher  for  women  than  for  men  (21.9%  compared  to 
19.7%). Women and girls face a higher risk throughout their lives due to structural inequalities, 
including economic disparities, gender stereotypes, and discrimination, particularly related to 
care  and  work.  Single-adult  households,  which  are  predominantly  female,  experience  an 
AROPE  rate  approximately  10  percentage  points  higher  than  the  average.133  In  terms  of 
employment, pay, pensions, control over household resources, and ownership of assets, women 
consistently  fare  worse  than  men.  Gender  inequality  is  both  a  cause  and  a  consequence  of 
poverty, often resulting in poorer health outcomes and perpetuating intergenerational cycles. 

Capturing different dimensions of female poverty is challenging. Measures of poverty or 
social exclusion are primarily calculated at household level which can mask specific economic 
challenges faced by women, as it assumes resources are shared equally among all household 

129 OECD (2024), ’Is Care Affordable for Older People?‘, OECD Health Policy Studies, OECD Publishing, Paris, 
https://doi.org/10.1787/450ea778-en. 
130 SSM Research Note: Decancq K., Van de More W., ’How clustered are disadvantages among older Europeans? 
Evidence from SHARE‘, forthcoming. 
131 Idem. 
132 Provisional figures for SILC 2025, which are based on SILC 2025 data for the 21 Member States for which this 
data had been published on 20/04/2026 and on SILC 2024 data for the remaining 6 Member States. 
133 Source: Eurostat (online data code ilc_peps03n). 

51 

 
 
 
members. Fully understanding the scale and dynamics of women’s poverty also requires us to 
consider individualised data, such as indicators on the gender employment gap and the gender 
pay gap, which provide a useful view on gender discrepancies at individual level in the areas 
of employment and wages.  

Menstrual and menopause poverty affect many women across the EU.134 A specific poverty 
issue  for  women  and  girls  refers  to  the  inability  to  afford  menstrual  products  and  other 
challenges to deal with periods, as well as inadequate sanitation facilities, especially in schools 
and public places. It is estimated that it could impact 10% of women and girls.135 It is associated 
with  increased  health  risks,  including  mental  health,  and  can  lead  to  educational  and  work 
disruptions, hindering educational and professional prospects. 

Women’s  pay  tends  to be  lower  due  to  concentration  in  lower-paying  occupations  and 
sectors, slower career progression, part-time work, non-permanent contracts, and career 
breaks. Additional factors such as undervaluation of women’s work, differences in bargaining 
behaviour,  and  persistent  gender  stereotypes  further  reinforce  these  disparities.  These  also 
affect  savings,  wealth  accumulation,  and  financial  autonomy,  increasing  vulnerability  to 
poverty—particularly following household changes such as separation or bereavement, and in 
old age. 

Gender  employment  and  pay  gaps  remain  significant  across  the  EU.  In  2024,  women’s 
employment rate was about 10 percentage points lower than men’s, and in 2024, the gender pay 
gap was at 11.1%.136 The gender pension gap, as noted earlier, is even wider, reflecting  the 
unequal employment histories of older generations. Even when women are well-educated or 
primary earners, informal care duties often limit their career choices and progression. Women 
are more likely to involuntarily work part-time, especially where access  to affordable, high-
quality care services is lacking. Many women take jobs with more predictable schedules and 
locations, which tend to offer lower pay and fewer opportunities for advancement. 

Women and girls are also at higher risk of control over or denial of access to household 
resources, economic exploitation, and interference with employment or education. EU surveys 
indicate that around 12% of women have experienced economic violence by a partner since age 
15137,  and  lack  of  control  over  resources  can  constrain  women’s  ability  to  leave  abusive 
relationships, particularly when intersecting with other forms of discrimination, such as migrant 
background. 

In  2024,  the  AROPE  rate  for  single  parents  was  much  higher  than  for  the  overall 
population at EU27 level (43.2% vs 21.0%). The AROPE rate for single parents ranged from 
24.6% in Cyprus to 53.0% in Bulgaria. The gap between the AROPE rate for single parents and 

134 Commission Communication COM/2026/113 final of 5 March 2026 on the Gender Equality Strategy 2026-
2030. 
135  European  Parliamentary  Research  Service,  Addressing  menstrual  poverty  in  the  EU,  May  2025, 
https://www.europarl.europa.eu/RegData/etudes/BRIE/2025/772855/EPRS_BRI(2025)772855_EN.pdf. 
136 Source: Eurostat (sdg_05_2 - 0). 
137  Fundamental  Rights Agency  (FRA),  ’Violence  against Women: An  EU-wide  survey  – Main  results  report‘, 
2014. 

52 

 
 
 
the AROPE rate for the overall population was the lowest in Cyprus (at 7.5 pp) and the highest 
in Ireland (at 31.4 pp). At the EU27 level, the AROPE rate for single parents was at the same 
level in SILC 2024 than in SILC 2020 (at 43.2%)138, despite having slightly fluctuated between 
these two years. For female single parents, the AROPE rate (in SILC 2024 data) was 46.3% 
(which means that around 1 out of 2 single parents that are women are also AROPE).139 This 
rate is much higher than the male single parents AROPE rate, which stands at 30.4% (SILC 
2024). 

3.6. Persons with disabilities 

Close to one in four people in the EU has some sort of disability (23.9% of the population 
aged 16 or over in 2024). As disability prevalence increases with age, numbers are expected to 
grow as the EU population ages. 

In  2024,  almost  29%  of  all  persons  with  disabilities  were  at  risk  of  poverty  or  social 
exclusion (28.7% compared with 17.9% for people without disabilities), and 36% of those with 
severe disabilities. Social transfers play an important role. Without them the rate that would rise 
to  68.2%.140  The  AROPE  rate  ranged  from  45.8%  in  Lithuania  to  15.6%  in  Czechia.  When 
zooming  in  on  the  Severe  Material  and  Social  Deprivation  indicator  (one  of  the  3  AROPE 
components), it appears that the Severe Material and Social Deprivation rate for persons with 
disabilities (some or severe) was at 10.4% (for persons aged 16 or over) in 2024, compared to 
6.0% for the total population (for persons aged 16 or over). People of working age are most 
affected (34.5% in 2024), while in-work poverty for persons with disabilities stands at 9.7%, 
showing that employment substantially reduces the risk. 32% of children with disabilities are 
at risk of poverty or social exclusion in 2021. 

Employment rates among persons with disabilities remain low, with only around 50% in 
employment  over  the  years.  The  gap  in  employment  between  those  with  and  without 
disabilities, at 24 percentage points in 2024, has not improved significantly over the years. On 
the contrary, it has increased slightly from 22.7 percentage points in 2014. Many persons with 
disabilities remain inactive (40%) or are employed on a part-time basis despite expressing a 
desire to work more hours. Young persons with disabilities are particularly affected, with 28.5% 
aged 15–29 classified as NEET—almost three times the rate of their peers without disabilities 
(10%). Many persons with disabilities do not have a choice of employment. Often, they are 
obliged  to  work  in  ‘sheltered  workshops’,  many  of  which  do  not  offer  adequate  working 
conditions and a transition to the open labour market. 

Employment opportunities reflect labour demand as well as the outcome of education or 
active inclusion or social policies. Lack of inclusive education options results in a high level 
of early school leavers, at 24.6% in 2024. Tertiary education attainment gap between persons 
with and without disabilities amounted to 15.9 pps in 2024 for population aged 25-34. While 

138 There are breaks for some Member States in the underlying data behind this trend though. 
139 Source: DG EMPL own calculations using EU-SILC data. 
140 Source: Eurostat (online data code hlth_dpe030). 

53 

 
 
 
the EU is on track to meet the 2030 target of reducing early school leaving below 9%, students 
with disabilities remain at significantly higher risk. 

Active labour market  policies  alone often fail to  meet  the needs of persons  with  disabilities 
insofar  they  do  not  ensure  adequate  outreach,  or  targeted  support  and  measures  that  require 
including  vocational  rehabilitation,  organisations 
involvement  of  many  stakeholders, 
representing  persons  with  disabilities,  and  education  establishments.  While  EU  legislation 
guarantees the right to reasonable accommodation in the workplace141, lack of knowledge on 
the part of employers results in its limited implementation. Adequate design of benefit system 
plays  an  important  role.  Disability  benefits  are  often  strictly  withdrawn  upon  entering 
employment  without  significant  tapering  or  in-work  supplements  and  therefore  introduce 
disincentives to labour market integration, resulting in a benefit trap. 

Persons  with  disabilities  also  face  other  barriers  linked  to  accessing  services,  such  as 
community  services  enabling 
independent  living,  social  services,  healthcare,  Public 
Employment Services, transport, energy, and digital infrastructure. 

Despite the right to independent living, many persons with disabilities remain segregated, 
particularly those in institutions. Across the EU, about one million children and working-age 
adults, and two million older persons with disabilities live in institutions. Institutionalisation of 
persons  with  disabilities  is  a  form  of  social  exclusion,  undermining  their  autonomy,  self-
determination  and  development  of  capacities  to  contribute  into  the  economy  and  society. 
Expanding  community-  and  home-based  services  is  essential  for  deinstitutionalisation  and 
enabling full societal integration of persons with disabilities. 

3.7. People experiencing homelessness and housing exclusion 

Homelessness  is  the  most  extreme  form  of  poverty  and  social  exclusion,  leading  to 
significant adverse effects on life expectancy, health, well-being, and negatively affecting 
access to vital economic and social services. It is a dynamic and multifaceted social challenge, 
driven by structural and systemic drivers such as poverty, unemployment, living in marginalised 
communities, lack of affordable housing and inadequate social support services. In addition to 
structural drivers, individual factors can increase a person’s vulnerability to homelessness or 
act as  a “trigger” for homelessness. These include drug use, poor mental or physical health, 
family dissolution or domestic violence. Drug use can be both a consequence and a cause of 
social  exclusion  and  homelessness.142  People  living  in  the  street  or  in  public  places 
(rooflessness) is the most visible dimension of homelessness, but beyond it, other, less visible 
living situations that constitute homelessness or housing exclusion are houselessness (people 
staying  in  shelters  or  institutions),  or  insecure  housing  (those  at  risk  of  eviction,  domestic 
violence, or with insecure tenancy). 

141 OJ L, 2000/303, 2.12.2000, p. 16, ELI: http://data.europa.eu/eli/dir/2000/78/oj. 
142 Commission Communication COM/2025/743 final of 4 December 2025 on the EU Drugs Strategy. 

54 

 
 
 
Available national data point to a rising trend in several Member States, with the OECD 
estimating around one million people experiencing homelessness in the EU.143 However, 
given the variations in legal and statistical definitions of homelessness, as well as differences 
in monitoring efforts and methodologies among Member States, some stakeholders call for the 
production of consistent, reliable and comparable data on homelessness across the EU. 

The socio-demographic characteristics of individuals experiencing housing exclusion or 
homelessness  differ  substantially  based  on  national  and  local  contexts.  Nonetheless,  the 
latest  data  from  the  OECD  highlights  certain  groups  within  the  general  population  that  are 
disproportionately  affected  by  homelessness.  These  groups  include  young  people,  families 
with  children,  migrants,  older  adults,  and  persons  with  disabilities,  who  experience  a 
heightened risk of homelessness across various countries. 

Within  the  EU,  approximately  5%  of  adults  have  reported  experiencing  housing 
difficulties at some stage in their lifetime, according to the 2023 EU-SILC module on housing 
difficulties.  These  challenges  encompass  a  variety  of  situations,  including  sleeping  rough, 
residing in emergency shelters, living in non-traditional housing, or temporarily staying with 
family and friends due to a lack of alternatives. 

The primary causes of housing difficulties are family and personal, accounting for 30.0% of 
people in the EU aged 16 or older. Financial reasons accounted for 25.9%, followed by job loss 
or inability to find a job (7.3 %), and the end of a rental contract (5.2 %). Other reasons included 
uninhabitable accommodation (4.0%), health reasons (2.0%), and leaving an institution after a 
long stay with no home to return to (1.1%). Finding a job was the most common solution to 
overcome housing difficulties, reported by 26.5% of the respondents.144 

3.8. Third-country nationals and people with a migrant background 
The AROPE rate in 2025145 among people (aged 18 or over) born outside the EU remains 
more than twice as high as that of persons born in a given Member State (38.9% compared 
with 17.6%). Migrants and people with a minority racial or ethnic background face multiple 
and  interlinked  barriers  to  labour  market  integration,  including  skills  mismatches,  language 
difficulties, discrimination, and limited access to support services. In Germany, nearly one in 
three  refugees  remains  unemployed  five  years  after  arrival  despite  policy  reforms.146  In 
Southern Europe, especially Greece and Italy, asylum seekers often experience housing poverty 

of 

‘HC3.1  Population  experiencing  homelessness’,  Affordable  Housing  Database,  2024, 

143  OECD, 
https://webfs.oecd.org/Els-com/Affordable_Housing_Database/HC3-1-Population-experiencing-
homelessness.pdf. (Harmonised data does not yet exist). 
144  Eurostat,  Living  conditions  in  Europe  –  housing  and  renting  difficulties,  Statistics  Explained,  Publications 
Office 
https://ec.europa.eu/eurostat/statistics-
explained/index.php?title=Living_conditions_in_Europe_-_housing_and_renting_difficulties. 
145 Provisional figures for SILC 2025, which are based on SILC 2025 data for the 21 Member States for which this 
data had been published on 20/04/2026 and on SILC 2024 data for the remaining 6 Member States.. 
146 German Institute for Employment Research (IAB), Labour Market Integration of Refugees in Germany: Five-
Year Review, 2022. 

European  Union, 

Luxembourg, 

2024, 

the 

55 

 
 
 
 
and informal labour dependence.147 Early school leaving rates remain markedly higher among 
non-EU  citizens  (29.5%)  than  among  nationals  (9.0%)  in  2024,  which  further  affects  their 
employment  prospects.  These  dynamics  risk  intergenerational  poverty,  particularly  when 
children of migrants face educational segregation and slow school integration. 

Migrants  often  face  a  cycle  of  poverty  and  discrimination  that  reinforces  their 
marginalisation.  Discrimination  whether  overt  or  subtle  can  limit  their  access  to  housing, 
education, healthcare, and social services, deepening their economic struggles. Prejudice and 
negative stereotypes may isolate migrants socially, making it harder to build support networks 
or integrate fully into the community. 

The non-recognition of qualifications obtained in non-EU countries, together with lower 
levels of education, are key obstacles to inclusion in the labour market. Individuals with 
low educational attainment tend to have lower labour force participation, higher unemployment, 
and greater exposure to in-work poverty, while also engaging less in adult learning.148 Migrant 
women  often  encounter  additional  barriers  in  accessing  ECEC,  such  as  limited  institutional 
knowledge, financial constraints, and language barriers. 

Despite overall increasing employment rates for migrants in the EU, migrant women continue 
to face additional obstacles to the labour market, including the ‘motherhood penalty’ and unpaid 
care responsibilities. They are more likely to be overqualified for their jobs than migrant men 
and less likely to be employed than female EU nationals. This gender gap warrants a targeted 
approach  to  the  employment  of  migrant  women,  tackling  their  limited  access  to  integration 
support, childcare and family networks.149 

 3.9. Persons with a minority racial or ethnic background and LGBTIQ+ 
people 

Roma, people of African descent and other population groups with a minority racial or 
ethnic  background  continue  to  face  systemic  discrimination  and  social  exclusion.  Such 
discrimination affects areas such as housing, employment, education, and access to essential 
services,  and  is  increasingly  reported  during  job  searches  and  in  securing  accommodation. 
Longstanding  prejudice  and  structural  marginalisation  have  led  to  accumulated  and 
intergenerational  disadvantage,  resulting  in  a  markedly  higher  risk  of  poverty  among  these 
groups compared with the general population. 

31% of Roma and Travelers face discrimination, 70% live  at risk of poverty  and only 
54%  have  paid  work.150  Housing  outcomes  reflect  these  inequalities:  47%  of  Roma 

147 OECD, ’How Immigrants Contribute to Developing Countries’ Economies‘, OECD Publishing, Paris, 2020, 
https://doi.org/10.1787/9789264288737-en. 
148 European Commission, Directorate-General for Employment, Social Affairs and Inclusion, ’Employment and 
Social Developments in Europe 2025‘, Publications Office of the European Union, Luxembourg, 2025. 
149 Commission Staff Working Document SWD/2025/162 final of 11 June 2025 on the Mid-term Review of the 
Commission Action Plan on Integration and Inclusion 2021–2027, accompanying the Communication from the 
Commission on the State of Play on the Implementation of the Pact on Migration and Asylum. 
150  European  Union Agency  for  Fundamental  Rights  (FRA),  ’Roma  and  Travellers  in  the  EU:  more  jobs  but 
discrimination persists‘, news article, 2 October 2025, https://fra.europa.eu/en/news/2025/roma-and-travellers-eu-
56 

 
 
 
households  face  housing  deprivation—three  times  the  EU  average—often  characterised  by 
overcrowding, substandard conditions, and heightened risk of eviction.151 Spatial segregation 
further  compounds  exclusion.  Many  Roma  communities  are  concentrated  in  ethnically 
homogeneous  and  geographically  isolated  areas,  far  from  employment  opportunities, 
mainstream schools, and healthcare services. Access to basic utilities remains unequal: one in 
five  Roma  households  lack  indoor  tap  water,  underscoring  persistent  disparities  in  living 
standards.152 

Too many Roma face extreme poverty, unemployment, sub-standard education in segregated 
schools and classes, inadequate housing, poor health and wellbeing. Social exclusion reinforces 
resentment  against  Roma,  making  their  marginalisation  socially  acceptable  and  bolstering 
antigypsyism.  Roma  families  trapped  in  a  cycle  of  poverty  often  have  either  limited  or  no 
resources, and no means to get out of poverty and provide themselves and their children with a 
better  future.  Low  income  and  lack  of  basic  financial  literacy  lead  to  barriers  such  as  the 
impossibility to cover even bare necessities in times of crises, let alone pay for early education 
and care, schooling and school material, transportation, housing and utilities such as water and 
electricity.153 

Some  other  groups  experiencing  racism  are  more  at  risk  of  poverty  than  the  general 
population.  For  instance,  people  of  African  descent  are  at  a  higher  risk  of  poverty,  social 
exclusion  and  energy  poverty  than  the  general  population.  A  third  (32%)  of  them  face 
difficulties in making ends meet compared with 18% of the general population in the EU-27. 
14% of people of African descent cannot afford to heat their homes adequately (compared with 
7% of the general population). 

Discrimination continues to affect LGBTIQ+ people throughout all stages of life. In the 
labour  market,  they  frequently  encounter  unequal  treatment  during  recruitment,  in  the 
workplace,  and  towards  the  end  of  their  careers.  Barriers  to  accessing  fair  and  stable 
employment  contribute  to  a  heightened  risk  of  poverty,  social  exclusion,  and  homelessness. 
According to data from the third FRA LGBTIQ Survey154, 38% of respondents reported making 
ends meet “with great difficulty”, while 13% had to stay temporarily with friends or relatives, 
highlighting the precarious living conditions faced by many LGBTIQ individuals. 

more-jobs-discrimination-persistshttps://fra.europa.eu/en/news/2025/roma-and-travellers-eu-more-jobs-
discrimination-persists. 
151  European  Union Agency  for  Fundamental  Rights  (FRA),  ’Rights  of  Roma  and  Travellers  in  13  European 
Countries – Perspectives from the Roma Survey 2024‘, Luxembourg, Publications Office of the European Union, 
2025, https://fra.europa.eu/sites/default/files/fra_uploads/fra-2025-roma-survey-2024_en.pdf. 
152 Idem. 
153  Commission  Staff  Working  Document  SWD/2020/530  final  of  7  October  2020  accompanying  the 
Communication from the Commission to the European Parliament and the Council on A Union of Equality: EU 
Roma Strategic Framework for Equality, Inclusion and Participation. 
154 European Union Agency for Fundamental Rights (FRA), ’LGBTIQ at a crossroads: progress and challenges‘, 
Publications Office of the European Union, Luxembourg, 2024. 

57 

 
 
 
 
 
4. Policies to prevent and reduce poverty: EU response 
and remaining gaps  
This section looks at the key policies that help prevent and reduce poverty, and highlights how 
the  EU  Anti-Poverty  Strategy  combines  a  life-cycle  approach  with  a  horizontal  approach, 
looking in a comprehensive way into all relevant policy areas to prevent and address poverty. 
It also outlines the main EU initiatives in these areas. Despite progress, gaps in implementation 
persist and this section highlights where further EU efforts are planned to prevent and address 
poverty. In particular, this section underpins the new flagship initiatives announced by the EU 
Anti-Poverty  Strategy.  These  aim  to  boost  the  three  pillars  of  the  EU’s  active  inclusion 
approach to combat poverty: first by improving access to quality jobs (with special attention 
given  to  the  activation  of  those  excluded  from  the  labour  market  and  addressing  in-work 
poverty), second by supporting access to services (with new efforts to improve access to social 
services) and third by ensuring adequate income support (in particular for families). 

4.1.  Addressing  and  preventing  poverty  in  all  ages  and  across 
generations 

The EU Anti-Poverty Strategy takes a life-cycle approach, focusing on the different life stages 
and experiences that shape people’s development and wellbeing. People face different barriers 
and needs over the course of their lives, and these require tailored policy responses. Many of 
these challenges arise at different stages of life, but here these are explained in the chapter on 
which their impacts are more visible. 

In recent years, the EU has taken significant steps to promote the use of Distributional Impact 
Assessments  (DIA)  as  a  foundation  for  evidence-based  policymaking.  Building  on  the 
European Commission Communication on 'Better assessing the distributional impact of 
Member  States’  policies'  (2022),155  which  provided  Member  States  with  comprehensive 
guidance on improving the use of DIAs in planning and budgeting, subsequent initiatives have 
reinforced this commitment. The European Commission organises four mutual learning events 
per  year  to  exchange  best  practices  on  DIA.156  By  2024,  the  Council's  voluntary  guiding 
principles for EU Member States for evaluating economic effects of reforms and investments 
in the labour market, skills and social policy domains had further embedded DIA as a tool for 
evaluating  reforms  to  labour  markets,  skills  development  and  social  policy.  The  amended 
Council  Directive  on  requirements  for  budgetary  frameworks  of  the  Member  States 
(2024)157 specifically asks attention for the environmental and distributional impacts of climate 
change. 

155  Commission  Communication  COM/2022/494  final  of  28  September  2022  on  Better  Assessing  the 
Distributional Impact of Member States' Policies. 
156 Summary report of the 13th Mutual Learning Event (May 2025): 418aa1e5-1057-45fb-b45a-0e512d741588_en. 
157 OJ L, 2024/1265, ELI: http://data.europa.eu/eli/dir/2024/1265/oj. 

58 

 
 
 
4.1.1. Investing in children  

Investing in children to break the intergenerational cycle of disadvantage requires improving 
access to adequate resources and services, as well as support for parents to participate in the 
labour  market.  The  contributors  to  the  open  public  consultation  on  the  EU  Anti-Poverty 
Strategy158  identified  children  living  at  risk  of  poverty  or  social  exclusion  as  a  priority 
vulnerable  group  requiring  intervention.  Overall,  consulted  stakeholders  in  all  consultation 
exercises consistently emphasised the need to prevent  and combat child poverty, with many 
contributors calling for a strengthened implementation of the European Child Guarantee (see 
more information in Annex 1). 

4.1.1.1. Child and family benefits 

In addition to supporting parents’ participation in the labour market (see section 4.1.3), income 
support is key to ensuring access for them to adequate resources and to protect children from 
poverty.  Such  income  support  can  take  various  forms,  ranging  from  minimum  income  (see 
section 4.1.3.3) to housing (see section 4.2.2.8) and child benefits. Child benefits specifically 
target  households  with  children,  with  a  variety  of  child  benefit  systems  throughout  the  EU. 
There are three main types of in-cash benefits: child allowances, tax reliefs and other benefits 
(encompassing  additional  child  contingent  transfers  tied  to  broader  social  schemes  such  as 
housing assistance). In turn, the form that child benefits take, such as means-tested parameters, 
their coverage (i.e. the share of people entitled to the benefits) and adequacy (i.e. their amount), 
shape their impact on child poverty reduction, which ranges from 4 to 16 percentage points.159 

Spotlight on Czechia 

Among existing child benefit schemes, those with a balanced mix of universal in-cash benefits 
with additional targeted income support for vulnerable families can alleviate child poverty in an 
efficient  manner.  This  mix  is  for  instance  implemented  in  Czechia  and  reduces  the  share  of 
children under the poverty threshold by around 15 p.p.  

•  EU instruments in place 

The  Commission  Recommendation  on  Investing  in  Children  (2013)160  calls  on  Member 
States to develop integrated approaches to improving child wellbeing. It rests on three pillars: 
access to resources, access to quality services, and children’s right to participate. As regards 
access to resources, the Recommendation recommends supporting parents’ participation in the 

158 The open public consultation was open between 25 July and 24 October 2025 on  the ‘Have Your Say’ web 
portal. 

159 Joint Research Centre, Investing in Children: The Impact of EU Tax and Benefit Systems on Child Poverty and 
Inequality, 
2024, 
https://publications.jrc.ec.europa.eu/repository/handle/JRC137125. 
160 OJ L, 2013/59, 2.3.2013, ELI: EUR-Lex - 32013H0112 - EN - EUR-Lex. 

Luxembourg, 

Publications 

European 

Union, 

Office 

the 

of 

59 

 
 
 
 
 
labour  market  as  well  as  to  provide  for  adequate  living  standards  through  a  combination  of 
adequate, coherent and efficient cash and in-kind benefits. 

•  Next steps 

The Commission will publish a study on the effectiveness of child benefits in addressing child 
poverty in 2026. It aims to provide a comparative overview of child benefit policies across the 
EU, and estimate their short and long-term impact on a range of social outcomes, ranging from 
deprivation to parents’ employment. 

On this basis, and with the view to complement the Commission Recommendation on Investing 
in Children, the Commission will adopt in 2027 a Commission Recommendation with guidance 
on enhancing the efficiency and integration of child-related benefit systems in addressing child 
poverty, with a particular focus on their adequacy, coverage and effectiveness in reducing child 
poverty. 

4.1.1.2. Access to services for children 

Tackling child poverty and breaking the transmission of poverty across generations also require 
ensuring  access  to  affordable,  high-quality  services.  Children  at  risk  of  poverty  or  social 
exclusion start  their lives  at  a disadvantage which can have long-term implications for their 
development  and  prospects.  To  offset  such  disadvantage  and  foster  equal  opportunities, 
ensuring access to integrated services supporting child development plays a crucial role. Early 
childhood education and care (ECEC), schooling, inclusive education, extracurricular activities, 
school meals and healthy nutrition, healthcare and housing are among those services. While the 
access of children at risk of poverty or social exclusion is often hindered by multiple barriers, 
specific  policies  can  address  them.  Improving  children's  access  to  quality  services  was 
considered as second-most effective policy in tackling poverty by the contributors to the open 
public consultation. During the discussion in the EPSCO Council (19 June 2025), delegations 
shared the opinion that poverty must be tackled from a multi-dimensional perspective, with an 
important  focus  put  on  children  and  affordable  and  accessible  basic  services  (see  more 
information in Annex 1). 

Spotlight on Belgium 

Houses of the Child are local collaborative networks of partners providing child support in 
Belgium (Flanders and Brussels) in an integrated manner. They bring together local actors, 
including municipal authorities, health practitioners, providers of early childhood education 
and  care,  educational  institutions,  youth  services,  social  services,  libraries,  and  cultural 
centres.  Houses  of  the  Child  can  take  the  form  of  one-stop-shop  hubs,  where  co-located 
services  are delivered from  a single building.  By  providing seamless  access  to  a range of 
services  which  are  crucial  for  child  development,  these  hubs  play  an  essential  role  in 
addressing  non-take  up  challenges,  supporting  parents  and  fostering  equal  opportunities 
among children. 

60 

 
 
 
 
Programmes providing school meals for free, in particular for disadvantaged children, is 
one example which entails a positive benefit/cost ratio, especially in the long run. By removing 
financial  barriers,  programmes  of  quality  contribute  to  higher  take-up  of  healthy  food  by 
children.  They  may  also  have  a  positive  impact  on  health,  educational  and  (later  in  life) 
employment  outcomes  of  children  in  need,  the  agricultural  sector  and  environment  more 
broadly.  For  example,  just  considering  labour  market  integration  and  earnings  of  past 
beneficiaries,  the  benefit/cost  ratio  of  the  Swedish  universal  free  school  meal  scheme  is 
estimated  to  amount  to  4/1  for  the  overall  child  population  and  to  7/1  for  disadvantaged 
children,  based  on  a  longitudinal  study.  Even  though  this  order  of  magnitude  may  vary 
depending  on  context  and  features  of  programmes,  the  literature  converges  towards  the 
multifaceted  and  long-term  nature  of  positive  returns  yielded  by  school  meal  schemes.161 
Among key features is the level of targeting. Compared to universal schemes which provide all 
children  within  a  given  age  range  with  meals,  regardless  of  socioeconomic  background, 
schemes targeting children most in need can be less costly given their smaller coverage. Yet, 
such targeting can also raise administrative hurdles and entail some forms of stigmatisation, 
hindering take-up by children in need. 

Spotlight on Sweden 

Introduced during the 1960s, the Swedish universal school meal scheme provides nutritious 
school lunches – meeting balanced quality standards – free of charge to all primary school 
children.  Building  on  historical  data,  its  impact  on  pupils  has  been  assessed.  Pupils  who 
receive meals are found to be taller, reflecting a positive impact on health, and spend more 
time studying at school. In turn these entail an increase in lifetime income on the long run, 
through improved labour market integration and higher earnings once reaching adulthood, 
for  all  beneficiaries  and  even  more  for  those  from  disadvantaged  households.  Beyond  its 
universal positive impact, the Swedish universal school meal thus levels the playing field for 
the most in need.162 

Out-of-school and extracurricular activities also play a crucial role in promoting equal 
opportunities. Participation in sports, arts, and community-based programmes enhances social 
skills,  improves  school  performance,  particularly  for  disadvantaged  students,  and  facilitates 
social inclusion.163 However, children from low-income families are much less likely to benefit 

161 School Meals Coalition’s Research Consortium, ’The current state, benefits, and exemplary models of school 
meal programmes in the European Union – a report following 19th meeting of Child Guarantee coordinators on 
school meals’, 2025, f375b3a0-3821-4dbf-9ef8-ec620a335aca_en. 
162 Petter Lundborg, Dan-Olof Rooth, Jesper Alex-Petersen, Long-Term Effects of Childhood Nutrition: Evidence 
from a School Lunch Reform, The Review of Economic Studies, Volume 89, Issue 2, March 2022, Pages 876–908, 
https://doi.org/10.1093/restud/rdab028. 
163 See e.g. ion Policy Institute, ’Access to extra-curricular provision and the association with outcomes‘, 2024, 
https://epi.org.uk/publications-and-research/access-to-extra-curricular-provision-and-the-association-with-
outcomes/      Heath,  R.  D.,  Anderson,  C.,  Cureton  Turner,  A.,  Payne,  C.  M.,  Extracurricular  Activities  and 
61 

 
 
  
 
 
from them due to cost, lack of local infrastructure, or limited parental time – barriers which can 
be addressed in several ways. In some Member States, forms of incentives have for instance 
been introduced by national or local authorities to lower financial barriers and provide children 
with the possibility to access cultural activities at a discounted price (e.g. through passes). Yet, 
evaluations of the impact of such measures as well as of other types aiming to address non-
financial barriers remain limited and to be expanded. 

Addressing child poverty must go together with strengthening child protection systems, 
including preventing family separation, identifying at-risk children early, and ensuring access 
to  integrated  child  protection  services.  Interventions  are  most  effective  when  they  build  on 
preventive  action,  are  timely  and  coordinated  across  sectors—education,  health  including 
mental health, social protection, justice —and tailored to the specific needs of children and their 
families in vulnerable situations. 

•  EU instruments in place  

The  Council  Recommendation  establishing  a  European  Child  Guarantee164  (2021) 
provides  a  comprehensive  framework  to  mitigate  the  impact  of  poverty  on  children  by 
guaranteeing their effective access to a set of key services: (i) free early childhood education 
and care; (ii) free education (including school-based activities and at least one healthy meal 
each school day); (iii) free healthcare; (iv) healthy nutrition; and (v) adequate housing. 

The EU Strategy on the Rights of the Child (2021) aims to support and promote children’s 
rights across all relevant EU policies. It duly considers the specific needs of certain groups of 
children, including those in situations of multiple vulnerabilities and facing discrimination. It 
aims  at  combating  child  poverty  and  fostering  equal  opportunities,  notably  through  the 
European Child Guarantee. 

The Commission Recommendation on Integrated Child Protection Systems (2024)165 calls 
on  Member  States  to  reinforce  national  child  protection  systems,  with  a  particular  focus  on 
children in vulnerable situations. It acknowledges poverty as a major factor undermining child 
protection,  and  promotes  integrated  and  inclusive  services  that  address  the  root  causes  of 
vulnerability. It encourages early intervention, parenting and family support services to prevent 
harm and prevent separation from the family. 

EU  Children’s  Participation  Platform  (2022)166  creates  opportunities  for  children  from 
different socio-economic backgrounds to be involved in policymaking. It provides a structured 
and  safe  space  for  consultations  and  meetings,  reflecting  the  EU’s  commitment  to  child 

Complicated—But 
Disadvantaged 
https://journals.sagepub.com/doi/10.1177/004208591880579;  

Youth: 

A 

Promising 

— 

Story, 

2022, 

European  Commission:  Directorate-General  for  Employment,  Social  Affairs  and  Inclusion,  Benefits  of 
extracurricular activities for children – A focus on social inclusion and children from disadvantaged and vulnerable 
backgrounds, Publications Office, 2021, https://data.europa.eu/doi/10.2767/254969. 
164 OJ L, 2021/223, 22.6.2021, p. 14, ELI: http://data.europa.eu/eli/reco/2021/1004/oj. 
165 OJ L, 2024/1238, 14.5.2024, ELI: http://data.europa.eu/eli/reco/2024/1238/oj.  
166  European  Commission,  ‘EU  Children’s  Participation  Platform’,  EU  for  Children,  accessed  23 April  2026, 
https://eu-for-children.europa.eu/eu-childrens-participation-platform_en. 

62 

 
 
 
participation  and  to  hearing  the  perspectives  of  children  directly  affected  by  poverty  and 
exclusion. In addition, the EU school scheme167 supports the distribution of fruit, vegetables, 
milk and milk products at school. Around 19 million children annually across the EU benefit 
from the scheme regardless of household income, while promoting healthy eating habits.  

•  Next steps 

With the view to boost the implementation of the European Child Guarantee, the EU’s Anti-
Poverty Strategy is accompanied by a Communication on “Breaking the cycle of child poverty 
-  strengthening  the  European  Child  Guarantee”.  It  will  aim  both  to  close  gaps  in  its 
implementation  and  address  growing  challenges,  with  a  special  focus  on  early  childhood 
education  and  care,  access  to  education,  to  school  meals  and  healthcare,  including  mental 
health, and online safety (see separate initiative for more information) with a view of breaking 
the intergenerational transmission of poverty. 

4.1.1.3. Early Childhood Education and Care 

ECEC is a critical stage in building cognitive abilities such as literacy and numeracy, as 
well as social and emotional skills competencies. Research consistently shows that all young 
children can benefit from high-quality ECEC, but it can be especially helpful for children from 
low-income  households,  yielding  long-term  advantages  for  individuals  and  for  society  (e.g. 
educational attainment, better health, and less involvement in crime). These benefits and their 
close links with the level of quality of ECEC have been demonstrated by a large literature, with 
most studies conducted in the United States, complemented by a growing number of studies 
from European countries.168 

Fostering access to ECEC also enables parents—particularly women—to participate in 
the  labour  market,  contributing  to  gender  equality  and  economic  resilience.  Increasing 
participation in ECEC for children under the age of three to 50% could improve mothers’ labour 
participation  by  between  5%  and  30%  and  therefore  it  may  reduce  the  risk  of  poverty.169 
Investing  in  accessible,  affordable  and  high-quality  ECEC  is  therefore  not  only  a  social 
imperative but also a strategic investment in Europe’s long-term prosperity, competitiveness 
and cohesion. Throughout the EU, children in need participate less in ECEC than their better 
off peers (for more information on participation gaps, see section 3.1). 

167 OJ L, 2013/347, 20.12.2013, p. 671, ELI: http://data.europa.eu/eli/reg/2013/1308/oj. 
168 OECD (2025), Reducing Inequalities by Investing in Early Childhood Education and Care, Starting Strong, 
OECD Publishing, Paris, https://doi.org/10.1787/b78f8b25-en. 
169 European Commission. (2024). Employment and Social Developments in Europe 2024. Publications Office of 
the European Union. 

63 

 
 
 
 
 
 
Spotlight on Portugal 

In the past years, Portugal has rolled out large scale reforms to expand access to ECEC.170 
Most  notably,  relevant  prioritisation  criteria  were  set  up  in  2022  to  prioritise  access  of 
children most in need (i.e. at least 30% of the vacancies are to be allocated to children covered 
by specific child benefits – e.g. ‘Child Guarantee’ benefit) and ECEC became free of charge 
for  all  children  under  4  years  old  in  2024.  Partly  supported  by  Recovery  and  Resilience 
Programme’s funding, facilities are also being extended, already increasing the number of 
places by more than 11,000. In the meantime, participation rate of young children at risk of 
poverty or social exclusion in ECEC rose from 35.5% in 2022 to 45.6% 2024. 

•  EU instruments in place  

The  Council  Recommendation  on  High-Quality  ECEC  systems  (2019)171  describes  the 
Quality Framework to be in place to provide high-quality ECEC, based on five inter-connected 
pillars:  availability,  accessibility  and  affordability  of  ECEC;  qualifications  and  training  of 
ECEC  staff;  implementation  of  a  curriculum,  and  appropriate  funding;  governance  and 
monitoring and evaluation measures. 

Council Recommendation on the Revision of the Barcelona Targets on Early Childhood 
Education and Care (2022)172 updated the original 2002 Barcelona targets on the provision of 
ECEC in the EU. The revised targets aim to increase participation in ECEC to at least 45% of 
children under 3 years old and 96% of children from age 3 until the start of compulsory primary 
education (also a 2030 EU-level target under the EEA strategic framework), alongside closing 
the  participation  gaps  between  AROPE  children  and  their  better  off  peers.  In  line  with  the 
Council  Recommendation,  one  way  to  close  such  gaps  consists  in  establishing  a  legal 
entitlement  to  ECEC,  by  which  public  authorities  guarantee  a  place  for  all  children  whose 
parents demand it. It should also be complemented by more targeted support to disadvantaged 
groups of children to lower specific access barriers they may face. 

•  Next steps 

As part of the Action Plan on Basic Skills173, the Commission will introduce guidelines for 
curriculum and pedagogical  development  in  ECEC. These will focus on strengthening early 

170 European Commission: Directorate-General for Employment, Social Affairs and Inclusion, ‘Child Guarantee 
Biennial  Report  of  Portugal:  National  Action  Plans  and  Progress  Reports’,  2024,  https://employment-social-
affairs.ec.europa.eu/policies-and-activities/social-protection-social-inclusion/addressing-poverty-and-supporting-
social-inclusion/investing-children/european-child-guarantee/national-action-plans-and-progress-reports_en. 
171 OJ C, C/201/189, 5.6.2019, p. 4, ELI: EUR-Lex - 32019H0605(01) - EN - EUR-Lex. 
172 
content/EN/TXT/?uri=oj:JOC_2022_484_R_0001. 
173 Commission Communication COM/2025/88 final of 5 March 2025 on the Action Plan on Basic Skills. 

https://eur-lex.europa.eu/legal-

C/2022/484, 

20.12.2022, 

ELI: 

OJ 

C, 

1, 

p. 

64 

 
 
 
 
 
 
acquisition  of  basic  skills,  while  supporting  early  detection  of  developmental  delays.  The 
Commission will also report on the state of play in the implementation of the Recommendation 
on ECEC: the Barcelona targets for 2030 in 2027. 

4.1.1.4. General education 
The foundations of equal opportunity are laid early in life. Research by the OECD174 and 
UNESCO175 shows that children who attend quality primary and lower secondary education are 
far less likely to experience poverty or exclusion as adults. Secondary education serves as the 
critical bridge between basic education and access to further training or decent work. The 2030 
EU-level target under the EEA strategic framework is to reduce  the share of low achieving 
students  in  reading,  mathematics  and  science  to  below  15%.176  In  addition,  the  Interim 
Evaluation of the 2021-2030 European Education Area strategic framework suggested a new 
equity target of at least 25% of learners from a disadvantaged socio-economic background to 
reach a good level of achievement in at least one domain (reading, mathematics or science).177 

Inequities  in  learning  outcomes  have  widened  in  all  Member  States  between  2018  and 
2022. Underachievement in all basic skills is high among students from disadvantaged socio-
economic backgrounds (e.g. 48% in math in 2022), and the socio-economic gap continues to 
widen, also  in  digital skills.178 The low socio-economic background of students  remains the 
most persistent driver of educational inequality in Europe, primarily due to intergenerational 
cycles of disadvantage and poverty reproduction. Low parental education limits a child’s early 
cognitive stimulation, language development, and academic aspirations, while limited access 
to educational resources at home (e.g., books, quiet study spaces, academic support and private 
tutoring) and reduced cultural capital further widen gaps. At school, systemic underfunding in 
deprived areas leads to teacher shortages in high-need schools, higher staff turnover, and fewer 
experienced educators, resulting in larger class sizes and less individualised support179; TALIS 
2024 confirmed disadvantaged children, who depend most heavily on school-based learning 
because they lack compensatory resources at home, are systematically more likely to be taught 
by less experienced or less qualified teachers. The lingering effects of COVID-19, including 
uneven learning recovery due to reduced access to private tutoring compared to more affluent 
peers,  risks  increasing  the  penalties  for  disadvantaged  children  who  cannot  compensate  for 

[n.d.], 

accessed  23  April  2026, 

‘Earnings  by  Educational  Attainment’,  OECD, 

174  OECD, 
https://www.oecd.org/en/topics/sub-issues/earnings-by-educational-attainment.html. 
175  UNESCO,  ‘Education’,  UNESCO,  [n.d.],  accessed  23  April  2026,  https://www.unesco.org/en/education. 
https://www.unesco.org/en/education?utm_source. 
176Council  of  the  European  Union,  ‘Council  Resolution  on  a  strategic  framework  for  European  cooperation  in 
education and training towards the European Education Area and beyond (2021-2030)’, Official Journal of the 
European Union C 66/01, 18 February 2021. 
177 Good achievement is defined as reaching at least level 4 on the OECD’s PISA scale, which is at least two levels 
higher than underachievement. 
178 European Commission: Directorate-General for Education, Youth, Sport and Culture,  The twin challenge of 
equity and excellence in basic skills in the EU – An EU comparative analysis of the PISA 2022 results, Publications 
Office of the European Union, 2024, https://data.europa.eu/doi/10.2766/881521. 
179  In  OECD’s  PISA  2022,  principals  in  socioeconomically  disadvantaged  schools  reported  more  shortages  of 
qualified teachers than those in advantaged schools, and school-based hiring is associated with a larger gap in the 
distribution of teacher quality between advantaged and disadvantaged schools. 

65 

 
 
 
school-level deficiencies through private means. Finally, as highlighted in the Education and 
Training Monitor 2025, certain education policies may inadvertently reinforce socio-economic 
disparities:  early  tracking  increases  educational  stratification  by  funnelling  disadvantaged 
students into lower-tier schools, grade repetition disproportionately affects migrant and low-
income  students,  increasing  dropout  risks,  and  school  segregation  exacerbates  inequalities, 
underscoring the need for reforms to make education systems more inclusive.180 

•  EU instruments in place 

The Council Recommendation Pathways to School Success (2022)181 aims to promote better 
educational  outcomes  for  all  learners,  regardless  of  their  socio-economic  background,  by 
seeking  to  raise  basic  skills  levels,  increase  upper  secondary  completion  rates  and  support 
inclusive education systems and wellbeing at school, with particular attention to disadvantaged 
groups.  

The  Union  of  Skills  Communication182  and  the  Action  Plan  on  Basic  Skills  (2025)183 
highlight  the  urgent  need  to  address  the  basic  skills  crisis  evidenced  by  recent  international 
surveys.184 The Action Plan sets out short/medium-term actions to improve performance across 
all basic skills (literacy, mathematics, science, digital and citizenship skills).  

•  Next steps 

In 2026, the Commission will adopt an Education Package, which will include a Basic Skills 
Support Scheme, supporting effective interventions at school level to help children and young 
people attain an adequate level of basic skills by the end of compulsory schooling and to reduce 
early learning inequalities.  

4.1.2. Supporting young people to thrive 

Young people are at greater risk of being out of work. In 2024, 11.1% of 15–29 year-olds 
in the EU were neither in employment nor in education and training (NEET).185 The diverse 
NEET population faces multiple barriers, necessitating tailored solutions. Young people often 

C, 

9.12.2022, 

180 European Commission: Directorate-General for Education, Youth, Sport and Culture, Education and training 
monitor  2024  –  Comparative 
the  European  Union,  2024, 
report,  Publications  Office  of 
https://op.europa.eu/en/publication-detail/-/publication/9637e78f-acc7-11ef-acb1-01aa75ed71a1/language-en. 
181OJ 
C/2022/469, 
content/EN/TXT/?uri=oj:JOC_2022_469_R_0001. 
182 Commission Communication COM/2025/90 final of 5 March 2025 on The Union of Skills. 
183 Commission Communication COM/2025/88 final of 5 March 2025 on the Action Plan on Basic Skills. 
184 According  to  the  OECD  PISA  2022  survey,  30%  of  15-year-olds  in  the  EU  lack  minimum  proficiency  in 
mathematics, while around 25% struggle in reading and science.  IAE’s ICILS 2023 revealed that some 43% of 
eighth graders are struggling with basic digital literacy, confirming a downward trend. 
185 Source: Eurostat (online data code edat_lfse_20). 

https://eur-lex.europa.eu/legal-

ELI: 

p. 

1, 

66 

 
 
 
 
 
 
 
require intensive, holistic support beyond employment, including housing and social welfare, 
to  effectively  aid  those  in  vulnerable  situations.  The  academic  conference  on  the  EU  Anti-
Poverty Strategy organised in the context of the consultation on the Strategy featured a strong 
call from the participants for ensuring opportunities and inclusion for younger generations (see 
more information in Annex 1). 

4.1.2.1. Comprehensive support for youth 

To prevent and mitigate youth poverty, investing in childhood as well as the transition 
from childhood to adulthood is key. Tackling child poverty contributes to the promotion of 
equal  opportunities  from  the  earliest  age  onward,  which  in  turn  reduces  the  chances  of 
disadvantaged children falling into poverty when turning 18. Continuous support afterwards 
also plays a key role. This includes support to access education, apprenticeship, traineeship or 
employment,  and  counselling  delivered  in  an  individualised  approach,  tailored  to  young 
people’s needs.  

Unemployment and inactivity among young people have a high cost, both at personal and 
societal levels. Unemployment, especially long-term unemployment, at the start of a career can 
have negative long-term consequences such as lower future earnings and worse employment 
prospects,  increasing  precariousness  and  the  risk  of  poverty.  Young  people  are  often  more 
vulnerable to economic downturns and negative changes in the labour market. 

Given the changing realities of the world of work, welfare systems, which are mainly tailored 
to  traditional  labour  markets,  may  not  cover  all  those  who  need  protection.  Therefore, 
developments in the labour market may affect young people, on multiple levels, more than those 
at a more advanced stage of their career, and may have implications for the fulfilment of their 
life projects. 

Completing education and training increases children’s and young people’s employment 
prospects. Therefore, fighting early school leaving and supporting children and young people 
with appropriate education and skills policies are crucial. Their upskilling needs to focus on 
skills which will be in demand in the labour market also in the future and which can offer a 
sustainable integration into  the labour market.  Work-based learning has proven efficient for 
those for whom more academic paths are not suitable. Evidence shows that at their best, also 
traineeships can offer a way to the labour market.186 

Young people are a highly heterogeneous group. In particular, young people who bear certain 
vulnerabilities (early school leavers, young people with migrant background, with disabilities, 
(mental)  health  problems,  etc.),  require  often  intensive  and  more  complex  interventions. 
Therefore, they need holistic support from a broad range of actors and services. 

•  EU instruments in place 

186 According to a 2023 Eurobarometer, for one fifth of respondents, the first work experienced was a traineeship. 
Over two thirds of respondents who had done a traineeship found a job following a traineeship. 

67 

 
 
 
The EU Youth Strategy (2019-2027)187 addresses the major challenges faced by young people 
in  Europe.  It  promotes  equal  access  to  rights  and  opportunities,  particularly  for  the  most 
marginalised, through the European Youth Goal 3 on inclusive societies. 

The Youth Guarantee188 (2013, reinforced in 2020) remains the EU’s key policy to combat 
youth unemployment and non-participation in the labour market. It recommends that all young 
people under 30 receive an offer of employment, continued education, an apprenticeship, or a 
traineeship within 4 months of leaving education and training or becoming unemployed. The 
reinforced Youth Guarantee focuses on supporting school-to-work transitions, outreach to and 
activation of the more vulnerable, upskilling and re-skilling, as well as individualised support. 
Since 2013, almost 57 million young people have benefited from this scheme, improving their 
employability and reducing their poverty risk. 

The Traineeships package (presented in 2024) consists of a proposal for a new Directive189 
and a proposal for a reinforced Council Recommendation190 to improve conditions for over 3 
million trainees in the EU. The package introduces fair pay, access to social protection, and 
targeted support for groups in vulnerable situations, while improving and enforcing working 
conditions of trainees as well as preventing disguised employment relationships. Negotiations 
on the proposals are ongoing. 

The  ALMA  initiative  is  a  key  tool  for  targeting  disadvantaged  NEET  people  (not  in 
employment, education, or training) aged 18–29. The initiative helps combat social exclusion 
and youth unemployment by supporting the integration of NEETs into employment, education, 
or training through a three-phase programme that includes a work-related learning experience 
abroad. Since its launch at European level in 2022, around 8,000 young people are benefitting 
from ALMA. Some of those NEETs benefitted from counselling, support and mobility abroad 
in the context of 28 transnational projects implemented in 15 Member States under a Union-
wide  call  funded  under  ESF+,  others  benefitted  from  ALMA  in  the  context  of  national  or 
regional  initiatives.191  Participants’  experiences  demonstrate  that  the  program  helps  build 
confidence, discover new directions, and acquire practical  skills  that lead to  employment or 
further education.192 

p. 

1, 

C, 

OJ 

ELI: 

4.11.2020, 

C/2020/372, 

https://eur-lex.europa.eu/legal-

187  European  Commission,  'EU  Youth  Strategy',  European  Youth  Portal,  [n.d.],  accessed  23  April  2026, 
https://youth.europa.eu/strategy_en.https://youth.europa.eu/strategy_en. 
188 
content/EN/TXT/?uri=CELEX:32020H1104%2801%29. 
189 Commission Proposal COM/2024/132 final/2 of 20 March 2024 for a Directive of the European Parliament and 
of the Council on improving and enforcing working conditions of trainees and combating regular employment 
relationships disguised as traineeships (Traineeships Directive). 
190 Commission Proposal COM/2024/133 final of 20 March 2024 for a Council Recommendation on a Reinforced 
Quality Framework for Traineeships. 
191 National or regional ALMA initiatives are implemented in Bulgaria, Czech Republic, Germany, Greece, Malta, 
Poland  (Lublin,  Podkarpackie,  Świętokrzyskie  and  Śląskie  Province),  Spain  (Catalunya,  Galicia, Andalucia), 
Slovenia. 
192 European Social Fund Agency,  Impact Evaluation of the Projects Implemented under the ALMA Initiative: 
Final Evaluation Report, Vilnius, 2026. 

68 

 
 
 
The  European  Youth  Work  Agenda193  and  EU  Programmes  such  as  Erasmus+  and 
European  Solidarity  Corps  aim  to  ensure  that  all  young  people  (and  other  target  groups), 
regardless  of  background,  can  participate  fully  in  society.  They  tackle  barriers  linked  to 
economic disadvantages by offering financial support, flexible mobility formats and inclusive 
participation opportunities.  

The Intergenerational Fairness Strategy194 (2026) sets an overarching goal to guarantee that 
current  decisions  are  made  with  the  future  in  mind,  ensuring  a  fair  balance  of  benefits  and 
burdens across all generations. 

Spotlight on Greece 

Greece  supports  children  leaving  alternative  care  through  individual  action  plans  and 
initiatives such as the Semi-Autonomous Living programme which involves counselling and 
housing programmes focused on young people. These actions aim to support independence 
and social integration of care leavers.  

•  Next steps 

The Commission will continue to support the Member States in their implementation of the 
Youth Guarantee. The main financial support of the EU to Member States’ efforts to address 
youth  unemployment  and  inactivity  is  through  the  ESF+  and  the  RRF.  Furthermore,  the 
implementation of the Youth Guarantee will continue to be monitored through 1) annual data 
collection and 2) through the thematic reviews of the Employment Committee (EMCO) every 
two years. In addition, the Youth Guarantee coordinators meet twice a year to exchange best 
practices and discuss common challenges. 

To address the urgent needs of children and break the cycle of poverty, the Commission takes 
actions to (1) improve parents’ access to adequate resources, (2) ensure vulnerable children’s 
take-up of in-kind support by strengthening the Child Guarantee, (3) protect them from growing 
safety threats and (4) join force with all partners to invest in children. 

A new Youth Strategy going beyond 2027 will be developed, further promoting equal access 
to rights and opportunities, particularly for the most marginalised, and inclusive societies.  

4.1.2.2. Higher education 
At  tertiary  level,  education  continues  to  be  a  major  determinant  of  life  outcomes. 
Participation and completion rates in tertiary education remain strongly influenced by socio-
economic background, but also by permeability between different learning pathways, dedicated 
information about study opportunities and positive role-models. This underscores how the level 
of ambition to participate in further or higher education along with educational advantages are 

193 OJ C, C/2020/415, 1.12.2020, p. 1, ELI: EUR-Lex - 42020Y1201(01) - EN - EUR-Lex. 
194  Commission  Communication  COM/2026/110  final  of  5  March  2026  on  the  Strategy  on  Intergenerational 
Fairness. 

69 

 
 
 
 
 
often passed down through generations. A recurring challenge is the lack of appropriate support 
services  and  reasonable  accommodations  to  ensure  equal  participation  in  and  positive 
completion of higher education studies. Expanding access through financial support, affordable 
student  housing,  personalised  counselling  and  guidance,  flexible  learning  pathways,  better 
permeability between different educational pathways, and recognition of non-formal learning 
can play a decisive role in reducing inequality in the access to higher education and enabling 
upward mobility. Part of the students face difficulties in meeting their daily expenses (including 
paying for accommodation, food and energy) or have to work for paying these expenses, as 
well  as  for  paying  their  tertiary  education  (which  is,  overall,  becoming  more  and  more 
expensive). 

Spotlight on Ireland 

Access  and inclusion  in higher education have been a  long-time Irish priority since 2005, 
guided by the National Access Plan (NAP) focused on enhancing access, participation and 
success for underrepresented groups. The NAP identifies three particular groups in higher 
education:  socioeconomically  disadvantaged,  members  of  the  Irish  Traveller  and  Roma 
communities  and  students  with  disabilities.  In  addition  to  a  grant-based  student  support 
system the NAP aims at achieving greater inclusion, equity and diversity; to make pathways 
to higher education available to all, to increase flexible ways of learning, to support students 
to study on a flexible basis (including part-time and blended learning) and to improve the use 
of recognition of prior learning. 

•  EU instruments in place  

The EU actively supports the objectives of the Bologna Process (1999) to build consistent 
higher education systems across Europe and neighbouring regions. These efforts culminated in 
the establishment of the European Higher Education Area (EHEA)195 in 2010. The Bologna 
Follow-Up Group developed Principles and Guidelines to Strengthen the Social Dimension 
of Higher Education in the EHEA196, which provide a shared framework for promoting equal 
opportunities and supporting underrepresented groups in higher education. The commitment to 
build an inclusive EHEA by 2030 was reconfirmed in the Tirana Communiqué (2024).197 

The European Strategy for Universities (2022)198 also underlined the importance of inclusive 
universities. It accompanied the Council Recommendation on building bridges for effective 
European  higher  education  cooperation  (2022)199  which  encourages  European  higher 
education institutions to embrace new learning formats as a means of offering opportunities for 

195 European Higher Education Area (EHEA), 'Home', EHEA, [n.d.], accessed 23 April 2026, https://ehea.info/. 
196 BFUG Working Group on Social Dimension, Principles, Guidelines and Indicators to Strengthen the Social 
Dimension of Higher Education in the European Higher Education Area, 4 May 2023, 

BFUG_SE_BA_84_WG_SD_Principles_and_Guidelines.pdf. 
197 European Higher Education Area (EHEA),  EHEA Ministerial Conference, Tirana, 29–30 May 2024. Tirana-
Communique.pdf. 
198 Commission Communication COM/2022/16 final of 18 January 2022 on the European Strategy for Universities. 
199OJ C, C/2022/160, 13.4.2022, p. 1, ELI: EUR-Lex - 32022H0413(01) - EN - EUR-Lex. 

70 

 
 
 
 
transnational  cooperation  and  mobility 
the 
underrepresentation  of  students,  academics  and  administrative  staff  from  disadvantaged 
backgrounds. 

thereby  addressing 

learners, 

for  all 

•  Next steps 

As part of the Union of Skills, the Commission will in 2027 present an initiative to increase 
accessibility of higher education to a wider range of learners and ages – to meet the increasing 
demand for higher education graduates in the labour market. 

4.1.2.3. Vocational education and training 

Vocational  education  and  training  (VET)  has  a  specific  role  to  play  to  improve 
employability,  earnings  potential  and  social  mobility.  According  to  Eurostat,  the 
employment  rate  of  recent  graduates  from  medium-level  vocational  programmes  in  the  EU 
reached 80.0% in 2024 – 17.2 percentage points higher than for graduates from medium-level 
general education and 27.4 points higher than for those with only lower secondary education. 
Medium-level vocational programmes refer to upper-secondary or post-secondary vocational 
education and training (typically EQF200 levels 3–5) that provide practical, job-specific skills 
and formal qualifications for direct entry into the labour market, often  combining classroom 
learning  with  work-based  training.  By  supporting  access  to  employment  and  helping 
individuals build relevant skills for the labour market, VET can strengthen their prospects for 
more stable income and greater economic security. Participation in vocational pathways helps 
individuals who have felt marginalised or disconnected from traditional education to reconnect 
with the world of work and their communities. Through these mechanisms, VET contributes 
not only to employment and growth, but also to social cohesion and the fight against poverty201. 
Its contribution in this respect depends not only on participation in VET as such, but also on 
the quality and labour market relevance of the programmes concerned. 

VET offers targeted and accessible pathways to employment, particularly for groups in 
vulnerable situations who need to enter the labour market more rapidly or who face barriers 
to  pursuing  longer  academic  studies.  VET  programmes  that  are  closely  connected  to  labour 
market needs, include strong employer involvement, integrate work-based learning, and lead to 
recognised  qualifications  are  more  likely  to  support  sustainable  labour  market  integration. 
These features are important to ensure that VET does not simply redirect individuals into low-
paid or precarious employment but helps them access jobs with better prospects for progression, 
stability and adequate working conditions. At the same time, the extent to which leaners can 
benefit from VET depends heavily on enabling policy design that reduces barriers to access and 
successful  participation.  Such  barriers  may  include  the  geographic  distance  from  VET 
providers,  particularly  in  rural  and  remote  areas;  the  cost  of  registration,  equipment  and 

200    European  Commission,  'European  Qualifications  Framework  (EQF)',  European  Commission,  [n.d.], 
https://ec.europa.eu/ploteus/en/european-qualifications-framework. 
201 Cedefop, ’Inclusion at the core of the future-proof VET in Europe: Insights from Cedefop’s monitoring and 
analysis of VET policies in Europe‘, 2026 [Unpublished paper]. 

71 

 
 
 
 
transport; limited childcare support for young learners with dependents; literacy and numeracy 
requirements  that  may  exclude  those  with  weak  basic  skills;  discrimination  in  access  to 
employer-led  placements,  including  for  Roma,  migrants  and  persons  with  disabilities;  and 
insufficient financial support during training, especially for young adults with limited resources. 
Addressing  these  barriers  is  important  if  VET  is  to  function  as  an  inclusive  pathway  to 
qualification and employment. 

Spotlight on Spain 

Spain has recently undertaken a major reform of its VET system through Organic Law 3/2022 
on VET. The reform aims to create a more unified, modular and flexible VET offer, structured 
in progressive learning pathways ranging from short training modules to full qualifications. 
It also strengthens the dual character of VET by reinforcing links between classroom learning 
and workplace experience. This type of reform is particularly relevant from an anti-poverty 
perspective,  as  it  aims  to  widen  access  to  recognised  qualifications,  support  progression 
opportunities, and strengthen the labour market relevance of VET. 

•  EU instruments in place 

The  European  Alliance  for  Apprenticeships202  (EafA,  2013)  has  brought  together 
governments, social partners, businesses and education providers from 43 countries to expand 
access to quality apprenticeships. With over 500 members, the Alliance supports the creation 
of inclusive training pathways for young people, adults and disadvantaged groups, including 
NEETs and early leavers from education and training.  

The  2020  Council  Recommendation  on  VET  for  sustainable  competitiveness,  social 
fairness  and  resilience203  focuses  on  making  vocational  education  and  training  inclusive, 
accessible,  and  flexible  for  all,  particularly  targeting  disadvantaged  groups.  Key  measures 
include promoting equal access for persons with disabilities, low-skilled individuals, minorities, 
and migrants. 

•  Next steps 

The European Commission is preparing a new European Strategy for Vocational Education 
and Training (VET),  aiming to develop an attractive and innovative VET system to increase 
the attractiveness, excellence and inclusiveness of VET. 

202    European  Commission,  'European  Alliance  for  Apprenticeships',  Employment,  Social  Affairs  &  Inclusion, 
[n.d.], 
https://employment-social-affairs.ec.europa.eu/policies-and-activities/skills-and-qualifications/working-
together/european-alliance-apprenticeships_en.https://employment-social-affairs.ec.europa.eu/policies-and-
activities/skills-and-qualifications/working-together/european-alliance-apprenticeships_en. 
203 OJ C, C/2020/417, 2.12.2020, p. 1, ELI: EUR-Lex - 32020H1202(01) - EN - EUR-Lex. 

72 

 
 
 
 
 
4.1.2.4. Culture 

Poverty  often  limits  access  to  cultural  activities,  while  low  participation  in  culture  can 
reinforce exclusion and reduce opportunities for personal and community development. 
The  latest  data  show  that  51%  of  Europeans  did  not  engage  in  any  artistic  activities,  either 
individually or as part of a group, within the last 12 months.204 People living at risk of poverty 
or social exclusion often lack the financial resources to pay for tickets, transport or materials 
needed to participate in cultural events (museums, concerts, festivals). Cultural infrastructure 
(theatres,  libraries,  art  centres)  is  often  concentrated  in  wealthier  or  urban  areas,  leaving 
disadvantaged communities underserved. Lower education levels often mean less exposure to 
arts and culture, which can reduce both access and interest. 

When poverty limits cultural participation, people lose access to the social and educational 
benefits  that  could help  them  improve  their  conditions  -  creating  a  cycle  of  cultural  and 
economic  exclusion.  Conversely,  policies  that  promote  inclusive  cultural  participation  and 
create  opportunities  through  sustained  investment,  enhanced  monitoring,  and  inclusive  and 
accessible design of cultural infrastructure and programmes (e.g. free museum entry combined 
with targeted outreach and mediation rather than relying on free entry alone; community arts 
programmes; school partnerships with artists and cultural institutions, especially for schools in 
disadvantaged areas; or investments to decentralise cultural infrastructure in high-poverty areas, 
e.g.  in  the  form  of  accessible  cultural  hubs  or  equivalent  services)  can  help  break  cycles  of 
disadvantage  and  promote  social  mobility.  Other  measures  can  include,  for  example: 
micro‑grants; artists’ residencies; training for artists and cultural workers from low‑income or 
marginalised  backgrounds;  enhancing  digital  access  and  skills  to  mitigate  territorial 
disadvantage; design of digital cultural workforce pathways for the low skilled; integration of 
culture  into  social  welfare  and  health  services;  support  to  social  economy  and  community 
organisations to run cultural and creative projects in low‑income areas; peer-learning (OMC) 
on strategies to improve access to culture for disadvantaged groups; improved data collection 
and monitoring of cultural participation with indicators that include gender, age and life stage, 
geographic  location,  ethnic  origin/migration  status,  educational  attainment  level,  income, 
situation of parents (and parents’ own participation in culture), and disability status. 

Spotlight on Italy 

Cooperativa La Paranza in Napoli’s Rione Sanità started in 2006 as a social cooperative by 
young people from the Rione Sanità with a mission to revitalise the community by caring for 
its  cultural  assets.  The  cooperative  took  on  the  restoration  and  public  management  of  the 
Catacombs of San Gennaro and San Gaudioso, ancient sites that had long been neglected. 
The  cooperative  employs  dozens  of  people  from  the  neighbourhood  —  increasing  job 

204 Eurostat, 'Culture statistics - cultural participation: Highlights', Statistics Explained, [n.d.], accessed 23 April 
2026, 
https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Culture_statistics_-
_cultural_participation#Highlights.https://ec.europa.eu/eurostat/statistics-
explained/index.php?title=Culture_statistics_-_cultural_participation. 

73 

 
 
 
 
opportunities in an area with high unemployment. The project fosters social cohesion and 
positive narratives about the area: a once stigmatised neighbourhood becomes known for its 
heritage, vibrancy and local  agency rather than for decline. In 2022,  La Paranza won the 
European Heritage Award (Europa Nostra Award) for “creating a sense of belonging in the 
community  for  their  local  heritage  and  transforming  a  neglected  area  into  an  attractive 
cultural destination”.  

•  EU instruments in place 

EU  policy  frameworks  and  funding  programmes  (e.g.,  the  “Culture  Compass  for  Europe” 
strategic  framework  and  “Creative  Europe”  funding  programme)  explicitly  aim  to  enhance 
access to culture, particularly among vulnerable and disadvantaged groups, and help Member 
States share good practices.  

•  Next steps 

The  new  strategic  framework  for  culture,  the  “Culture  Compass  for  Europe”,  adopted  in 
November  2025,  includes  actions  to  enhance  citizens’  access  to  culture  across  Europe.  The 
Commission  will  prepare  (in  2028)  a  report  to  support  Member  States  in  increasing  the 
participation of and support to persons with disabilities in culture. 

4.1.5.4. Sports 

On average one in two Europeans never exercises, according to the 2022 Eurobarometer on 
Sport and Physical Activity.228 Data also shows that those enjoying a stable economic situation 
(i.e., no difficulty in paying the bills) and those with a higher educational background tend to 
practice sport and physical activity in higher numbers. For example, 74% of those finishing 
studies before the age of 15 are never physically active while this is the case only for 31% of 
those finishing studies after the age of 20. 

While  data  shows  that  there  is  lower  participation  in  sport  among  those  with  lower 
incomes, its practice has several positive impacts on an individual’s life. Participating in 
sports can bring people from different segments of society together, provide a forum for them 
to engage with each other and help individuals develop a wide range of skills that are beneficial 
both  personally  and  professionally.  To  address  the  needs  of  all  members  of  a  community, 
including children and persons with disabilities, urban and city planning can include facilities 
that allow sport and physical activity with few or no barriers to entry (both indoor and outdoor). 
These  plans  should  define  accessible,  safe  and  affordable  sport  and  physical  activity 
opportunities per inhabitant, with specific targets for disadvantaged neighbourhoods with high 
rates  of  poverty.  Skate  parks,  well-lit  public  areas,  table  tennis  tables  or  similar  low-
maintenance facilities can help low-income groups to have a place to practice sport at little or 
no  economic  burden.  These  can  be  supplemented  by  local  free  or  very  low-cost, 
community-based physical activity programmes (e.g. walking groups, open-air classes) in these 
spaces, to reduce non-take-up among low-income groups and maximise health benefits. Other 
examples include integration of walking and cycling networks, safe routes to school, and green 

74 

 
 
 
 
corridors into the sport/physical activity framing in deprived neighbourhoods, the role for social 
enterprises,  community  organisations,  and  co-operatives  in  operating  and  animating  sport 
spaces in disadvantaged  areas.  It  is  important  that  the process  is  designed in  a participatory 
manner involving residents, especially young people and persons with disabilities. 

•  EU instruments in place 

The Erasmus+ Sport Actions have actively promoted projects on social inclusion through sport. 
Between 2014 and 2024, over 980 projects, with a total value of EUR 144 million, were funded 
under this scheme to support skills and employability. 

To encourage the development of effective policies in Member States, many activities in the 
field of sport now focus on implementing the Council Recommendation on promoting health-
enhancing  physical  activity  (HEPA)  across  sectors.  This  Recommendation  includes  23 
indicators that allow Member States to develop and assess policy measures of Member States’ 
work  in  encouraging  participation  in  physical  activity  of  the  population.  According  to  the 
Health-Enhancing  Physical  Activity  Report  in  the  European  Union  from  2024205,  22  EU 
Member  States  have  in  place  a  Framework  to  support  offers  to  increase  access  to  exercise 
facilities for socially disadvantaged.206 

Spotlight on Germany 

In 2022, the Federal Ministry of Health initiated a Round Table on Physical Activity and 
Health  (Runder  Tisch  Bewegung  und  Gesundheit),  an  intersectoral,  participatory  process 
involving key Government and nongovernmental stakeholders from all relevant (political) 
sectors and levels. The goal of the Round Table was to strengthen physical activity promotion 
in  Germany.  To  achieve  this  goal,  the  needs  of  all  groups  (young  families  and  infants, 
children  and  adolescents,  adults  and  older  adults)  were  identified  in  a  series  of  meetings. 
Once  the  needs  had  been  identified,  the  Round  Table  agreed  on  measures,  which  are 
summarised in a consensus paper, to strengthen physical activity promotion in Germany. The 
Federal  Ministry  of  Health  will  further  support  and  monitor  implementation  of  the 
measures.207  

•  Next steps 

Given the need to increase the ambition and better reflect today’s challenges such as inactivity 
in  young  people  and  mental  health,  the  Commission  will  propose  a  revision  of  the  Council 

Health 

Organization, 

Union‘,  World 

205 World  Health  Organization,  Regional  Office  for  Europe  (2024),  ’Health-enhancing  physical  activity  in  the 
European 
2024, 
https://iris.who.int/handle/10665/379360. License: CC BY-NC-SA 3.0 IGO. 
206 Indicator 8 from the Council Recommendation of 26 November 2013 on promoting health-enhancing physical 
https://eur-
activity 
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2013:354:0001:0005:EN:PDF. 
207 
https://www.bundesgesundheitsministerium.de/fileadmin/Dateien/5_Publikationen/Praevention/Broschueren/Ko
nsenspapier_Runder_Tisch.pdf. 

Bundesministerium 

Konsenspapier 

Gesundheit, 

Regional 

Europe, 

sectors, 

Runder 

Office 

across 

Tisch, 

2026, 

für 

for 

75 

 
 
 
Recommendation  on  HEPA  planned  in  2027  to  reflect  the  need  for  new  indicators  and 
ambitions for their monitoring and implementation. 

4.1.3. Addressing poverty affecting people of working age 

It is key to design policies that ensure that working-age adults have adequate income. A lack of 
adequate  income  (either  from  work  or  support)  puts  individuals  at  risk  of  poverty  or  social 
exclusion  in  the  present,  but  also  in  their  old  age.  This  also  has  consequences  on  the  next 
generation as children whose parents are at risk of poverty are more likely to grow up at risk of 
poverty. 

This requires a combination of policies, which ensure that all those who are outside of the labour 
market and can work get support to (re-)enter the labour market and that quality jobs act as a 
shield against poverty, because they guarantee a living wage and access to adequate life-cycle 
social protection. The working age population should receive adequate income protection and 
support  to  live  in  dignity,  which  entails  that  workers  should  be  covered  by  unemployment 
protection, ensuring better income security in the event of loss of employment and equivalent 
protection for the self-employed, and those that lack sufficient means receive social assistance. 
Another  important  component  of  the  active  inclusion  approach208  is  access  to  quality  social 
services – see section 4.2.3. 

4.1.3.1. Facilitating access to work  

Facilitating  access  to  work  requires  well-designed  active  labour  market  policies,  and  in 
particular skills development policies. The social economy and micro-finance can effectively 
support efforts to integrate the most vulnerable in the labour market. Some groups, such as third 
country nationals and those with a migrant background, require specific attention. 

4.1.3.1.1. Active labour market policies 

Active Labour Market Policies (ALMPs) aim to foster inclusive labour markets by reducing 
unemployment  and  helping  people  in  employment  to  secure  their  livelihood,  as  well  as 
supporting  disadvantaged  or  vulnerable  groups  who  encounter  severe  and  often  multiple 
employment barriers.209 Well targeted ALMPs play a major role in promoting inclusive growth 
and  decreasing  dependency  on  welfare  benefits;  reducing  skills  mismatch  and  helping 
employers fill vacancies, improving overall labour market efficiency. ALMPs must respond to 
cyclical and structural labour market challenges. 

Improved  outreach  and  registration  are  key  to  improving  ALMP  participation  and, 
therefore, labour market outcomes, especially for the most vulnerable. In several Member 
States, fewer than 15% of beneficiaries registered with the PES are enrolled in any ALMP.210 
This  results  primarily  from  capacity  and  resource  constraints,  eligibility  criteria  of  potential 

208 Commission Communication COM/2008/639 final of 3 October 2008 on a Commission Recommendation on 
the Active Inclusion of People Excluded from the Labour Market. 
209 European Network of Public Employment Services: New forms of active labour market policy programmes. 
210 Commission Staff Working Document SWD/2022/313 final of 28 September 2022 accompanying the Proposal 
for a Council Recommendation on adequate minimum income ensuring active inclusion. 

76 

 
 
 
beneficiaries, administrative complexity and limited autonomy of the most vulnerable groups 
to access to measures.211 Outreach from the public employment services (PES) and registration 
of beneficiaries is key to improve participation in ALMPs, especially among persons excluded 
from the labour market. Better coordination and more robust referral mechanisms between the 
PES, training providers and relevant social services can enable early intervention, help to target 
measures appropriately for diverse recipients, and improve take-up. 

Increased investment, improved PES capacities and simplified access are preconditions 
for effective delivery of ALMPs. Capacity and  funding constraints of the PES are a major 
reason why enrolment is low: expenditure as share of GDP has been on a steady and rather 
steep  decline  since  its  recent  peak  in  2021,  when  it  reached  2.3%,  down  to  1.5%  in  2023. 
Investing in ALMPs is consistently estimated to have positive short- and long-term effects for 
employment and well-being of recipients, with outsized effects for people in the lowest income 
quantile.212 More effective and clearer design of eligibility criteria and simplified administrative 
access can also enable improved participation. 

For their effective inclusion, persons excluded from the labour market should have access 
to multidimensional support and individualised pathways towards employment. As they 
are  often  affected  by  entrenched  poverty  and  more  complex  forms  of  exclusion,  persons 
excluded from the labour market require in-depth assessment that consider the whole spectrum 
of vulnerabilities to which they might be subjected, beyond lack of work experience and skills. 
On that basis, individualised pathways towards labour market integration need to be developed 
and delivered, comprised of a service package covering ALMPs, education and training, job 
search support, psycho-social and health support and referral to enabling services (especially 
care services).  

Importantly,  the  effect  of  ALMPs  is  amplified  when  complementary  measures  and 
coherent  support  are  in  place.  Firstly,  for  the  participants  themselves,  with  a  view  of 
promoting  their  self-sufficiency  and  striking  an  effective  balance  between  income  support, 
work  incentives,  mutual  obligations  and  active  support  to  employment.  Additionally,  policy 
interventions  that  promote  transitions  into  higher  quality  jobs,  offer  the  right  incentives  for 
employers to hire on a full-time, permanent basis and provide adapted job opportunities, along 
with  adequate  access  to  social  protection,  can  help  reduce  labour  market  segmentation  and 
enhance job quality. Close collaboration with employers, for instance through the design of job 
placement programmes and on-the-job training, is key in this regard. Programmes promoting 
local  stakeholder  cooperation  and  partnerships  with  employers,  implying  subsidy  schemes, 
placement support  and on-the-job  training  often in the social  economy have  shown positive 
results in integrating long term unemployed. 

211 In 2024, 27.4% of PES expenditures were dedicated to ALMPs while 54.2% concerned social benefits (mostly 
unemployment  benefits).  62.5%  of  PES  reported  a  decrease  in  their  staff  between  2023  and  2025.  Source: 
European Network of Public Employment Services - Trends in PES: Assessment report on PES capacity 2025. 
212 European Commission: Directorate-General for Employment, Social Affairs and Inclusion, ’Employment and 
the  European  Union,  2024, 
social  developments 
https://data.europa.eu/doi/10.2767/91555. 

in  Europe  2024‘,  Publications  Office  of 

77 

 
 
 
•  EU instruments in place 

The  European  Network  of  Public  Employment  Services  (established  under  Decision  No 
573/2014/EU)  brings  together  PES  from  EU  and  EEA  countries  to  improve  performance, 
deepen  cooperation  to  address  labour  market  challenges  and  support  the  implementation  of 
European  Union  employment  policies.  PES  Network  mutual  learning  activities  have  put  a 
strong  emphasis  on  support  to  those  furthest  from  the  labour  market,  including  potentially 
minimum income beneficiaries. 

The Council Recommendation on the integration of the long-term unemployed into the 
labour market213 (2016) recommends that EU Member States encourage registration of the 
long-term unemployed, provide individual assessments by 18 months of unemployment, and 
offer a personalised job integration agreement. Key measures include a "single point of contact" 
to coordinate support, increased employer engagement, and linking the long-term unemployed 
to tailored plans that can include job search assistance, training, and social support services. 

The Council Recommendation on adequate minimum income ensuring active inclusion214 
(2023) mentioned in section 4.1.3.3 also provides recommendations to support the integration 
in the labour market of the most vulnerable. 

Transnational  call  under  the  ESF+  Social  Innovation  Plus  Initiative  on  “Innovative 
Approaches  Tackling  Long-Term  Unemployment”  (2025)  through  which  the  European 
Commission  provided  EUR  23  million  to  support  the  testing,  transfer,  and  scaling  up  of 
innovative  solutions  to  tackle  long-term  unemployment.  In  total,  9  transnational  projects 
implementing job guarantee approaches have received funding, modelled after successful larger 
scale initiatives such as the Territoires zéro chômeur de longue durée in France (see below) and 
Belgium, and the Marienthal Job Guarantee Pilot in Austria. The funded projects combine skill 
development  and  on-the-job  training,  social  support,  subsidised  employment  and  placement 
support.  

Spotlight on France 
The “Territoires zéro chômeur de longue durée” project was developed in 2016. Initially 
covering only 10 territories, today more than 75 territories are participating in the experiment. 
Participants are voluntarily recruited among long-term unemployed residents and are offered 
open-ended contracts with flexible working hours. They receive compensation at least at the 
minimum wage level, subsidised by the state at a rate of 95%. Since its creation, nearly 4000 
people  have  been  lifted  out  of  long-term  unemployment.  Jobs  created  have  largely 
contributed  to  community  needs  and  the  public  good,  with  32%  of  activities  addressing 
ecological transition issues, and 23% contributing to social cohesion (ETCLD, 2023).  

213OJ C, C/2016/67, 20.2.2016, p. 1, ELI: EUR-Lex - 32016H0220(01) - EN - EUR-Lex. 
214 OJ C, C/2023/41, 3.2.2023, p. 1, ELI: EUR-Lex - 32023H0203(01) - EN - EUR-Lex. 

78 

 
 
 
 
 
 
•  Next steps 

As announced in the EU Anti-Poverty Strategy, and in line with Article 154 (2) TFEU, the 
Commission will launch in 2026 the first-stage consultation of European social partners to 
obtain their views on the possible direction of EU action to support the activation of persons 
excluded from the labour market and equality between women and men with regard to labour 
market opportunities.   

The  European  Commission  will  continue  supporting  Member  States  in  implementing  the 
Council Recommendation on the integration of the long-term  unemployed into the labour 
market  through  a  mix  of  funding,  coordination,  tools,  and  monitoring.  The  results  of  the 
projects  currently  being  implemented  through  the  Social  Innovation  call  (see  above)  will 
bring  important  insights  on  effective  measures  to  further  support  long-term  unemployed. 
Efforts will also continue to improve the data availability of the monitoring data to gain more 
insight into the sustainability of the support provided. 

The Commission will submit in 2026 an evaluation report on the application of Decision No 
573/2014/EU establishing the European Network of Public Employment Services. Subject to 
evaluation results, the Commission will consider extending the PES network’s duration. The 
2026  PES  Network  Work  Programme  will  feature  specific  activities  aimed  at  supporting 
vulnerable  groups,  including  a  Working  Group  focused  on  PES  support  for  persons  with 
disabilities and a survey-based report centred on the long-term unemployed. 

4.1.3.1.2. Supporting skills development 
Adults most at risk of poverty are also the least likely to take part in training, reinforcing 
low skills, weak employment prospects and limited upward mobility. Participation is lowest 
among  groups  already  vulnerable  to  labour  market  change:  those  with  low  educational 
attainment, older adults, unemployed people, non-standard and platform workers.  

Basic skills deficits are a major barrier to participation in learning and employment and 
significantly increase the risk of social exclusion. Around one in five adults in the EU have 
low proficiency in literacy and numeracy, making it difficult to manage everyday tasks such as 
reading instructions, filling in forms or handling basic financial decisions, which in turn limits 
access to stable employment. There are strong differences between Member States: according 
to  the  2023  OECD  Survey  of  Adult  Skills215,  around  10%  of  adults  in  Sweden  are  low 
performers,  compared  with  one  in  three  in  Portugal.  Literacy  levels  have  declined  in  many 
countries, particularly among the lowest-performing adults, widening internal inequalities. In 
numeracy,  the  EU  average  has  remained  stable,  but  several  countries—including  Lithuania, 

215 OECD, Survey of Adult Skills 2023 Data Analysis Manual: A Companion Volume to the Survey of Adult Skills 
2023,  OECD  Publishing,  Paris,  31  March  2025,  https://www.oecd.org/en/publications/survey-of-adult-skills-
2023-data-analysis-manual_25a87a9d-en.htmlhttps://www.oecd.org/en/publications/survey-of-adult-skills-2023-
data-analysis-manual_25a87a9d-en.html. 

79 

 
 
 
 
Poland, Hungary, Slovakia, Austria, Czechia, Italy, Estonia and France—have seen a rise in the 
share of adults with low basic skills.  

Digital skills in particular have become a prerequisite for full participation in society and 
the  labour  market,  and  insufficient  digital  proficiency  increasingly  constitutes  a  driver  of 
poverty and social exclusion and vulnerability in the context of geopolitical challenges such as 
disinformation. As part of the European Education Area strategic framework for 2021-2030216, 
the  Council  established  the  target  of  reducing  the  share  of  low-achieving  eighth  graders  in 
computer  and  information  literacy  to  below  15%  by  2030.  In  its  Digital  Decade  Policy 
Programme 2030217, the EU has set the ambitious target of 80% of people aged 16-74 having 
at least basic digital skills by 2030. Yet current trends fall short. The 2025 State of the Digital 
Decade report218 warns that digital skills gaps are not closing fast enough, with disadvantaged 
groups persistently at risk of being left behind in the digital transition. Projections indicate that 
only 60% of the EU population will reach at least basic digital skills by 2030, and that universal 
basic  digital  literacy  might  not  be  attained  until  2063.    Public  employment  services 
systematically deliver and/or finance digital skills assessments and trainings. However, more 
efforts are needed to ensure they are tailored to particular vulnerable client groups and to take 
their needs and opinions on board when adjusting and designing digital services and content.219  

In May 2025, responding to the 2023 Council Recommendation on the key enabling factors for 
successful  digital  education  and  training220,  the  Commission  presented  the  draft  AI  literacy 
framework for primary and secondary education developed in cooperation with the OECD.221 
This work will be finalised and presented by Q2 2026 with the objective to offer a common 
approach to the competences young people need to understand and critically use AI tools, and 
the way in which education and training systems can support the development of those skills.  

In addition to the need to improve digital skills of young people, persistent gaps continue to 
limit equitable access to digital education, in particular for disadvantaged children and youth. 
Although  large  investments  have  been  made  with  the  support  of  EU  funding  towards  the 
digitalisation  of  schools,  the  European  Court  of  Auditors  report  on  “EU  Support  for  the 
Digitalisation of Schools” (2023)222 found that Member States lacked strategic focus in the use 

216 OJ C 66, 18.2.2021, p. 1, ELI: http://data.europa.eu/eli/C/2021/66/oj. 
217 https://digital-strategy.ec.europa.eu/en/library/digital-decade-policy-programme-2030 European Commission, 
Digital  Decade  Policy  Programme  2030,  Publications  Office  of  the  European  Union,  5  January  2023, 
https://digital-strategy.ec.europa.eu/en/library/digital-decade-policy-programme-2030. 
218 European Commission, ’State of the Digital Decade 2025 Report‘, Publications Office of the European Union, 
16  June  2025,  https://digital-strategy.ec.europa.eu/en/library/state-digital-decade-2025-report  https://digital-
strategy.ec.europa.eu/en/library/state-digital-decade-2025-report 
219 European Network of Public Employment Services – PES digital services to successfully integrate vulnerable 
jobseekers. 
220 ST/15741/2023/INIT. 
221 European Commission, OECD, Empowering Learners for the Age of AI, 2025, https://ailiteracyframework.org/. 
222 European Court of Auditors, The Use of EU Funding for Digitalisation of Schools, Special Report 11/2023, 
Publications  Office  of  the  European  Union,  Luxembourg,  2023,  https://op.europa.eu/webpub/eca/special-
reports/digitalisation-schools-11-2023/en/.https://op.europa.eu/webpub/eca/special-reports/digitalisation-schools-
11-2023/en/. 

80 

 
 
 
of  EU  financing.  Only  a  small  share  of  the  schools  surveyed  used  gigabit  broadband 
connections.  Many  schools  reported  insufficient  equipment,  or  further  training  needs  for 
teachers. Outside dedicated ICT lessons, less than one third of students used a digital device for 
learning at school at least once a week. 

learning  accounts  offer  a  means  of  delivering 

Individual 
individual  training 
entitlements—such  as  personal  budgets  or  accounts—to  all  working-age  adults.  These 
entitlements are universal, transferable and cumulative, allowing individuals to pay for labour-
market-relevant training as well as career guidance and skills validation. By providing people 
with greater autonomy over their learning and career progression, individual learning accounts 
can  enhance  motivation  and  empower  individuals  to  take  control  of  their  professional 
development.  To  ensure  accessibility,  however,  they  must  be  designed  to  offer  additional 
support  for  adults  from  disadvantaged  backgrounds.  Unlike  targeted  measures,  which  often 
carry a stigma and may reduce uptake, this approach promotes inclusivity without singling out 
specific  groups.  While  individual  learning  accounts  are  still  being  developed  across  EU 
Member  States—with  a  small  number  already  in  pilot  phases—their  long-term  potential  to 
alleviate poverty has yet to be demonstrated. For these accounts to contribute meaningfully to 
anti-poverty  efforts,  a  robust  enabling  framework  is  essential.  This  includes  effective  skills 
validation, career guidance, paid training leave and outreach initiatives that engage those who 
stand to benefit most. Ultimately, the success of individual learning accounts in fostering social 
mobility and reducing poverty will depend on thoughtful design and implementation. 

•  EU instruments in place  

The Upskilling Pathways Recommendation (2016)223 called on Member  States to  provide 
adults  with  low  qualifications  and  low  levels  of  (basic)  skills  access  to  flexible  learning 
opportunities to improve literacy, numeracy and basic digital skills, enabling them to access 
quality  employment  and  participate  fully  in  society.  It  was  linked  to  other  EU  initiatives, 
including the Recommendation on Validation of Non-formal and Informal Learning and the 
work of National Coordinators for Adult Learning.  

To  address  these  gaps,  the  European  Skills  Agenda224  (2020)  presented  a  comprehensive 
strategy to support upskilling and reskilling in the context of the green and digital transitions. 
It  emphasised  stronger  cooperation  with  social  partners,  improved  labour  market  skills 
intelligence, and targeted support for people furthest from learning. Key initiatives include the 
Council Recommendation on Individual Learning Accounts225, the European approach to 
micro-credentials226, and the Pact for Skills227 launched in November 2020. The Union of 

223 OJ C, C/2016/484, 24.12.2016, p. 1, ELI: EUR-Lex - 32016H1224(01) - EN - EUR-Lex. 
224 European Commission, ‘European Skills Agenda’, Employment, Social Affairs & Inclusion, accessed 28 April 
2026,  https://employment-social-affairs.ec.europa.eu/policies-and-activities/skills-and-qualifications/european-
skills-agenda_en. 

225OJ C, C/2022/243, 27.6.2022, p. 26, ELI: EUR-Lex - 32022H0627(03) - EN - EUR-Lex. 
226OJ C, C/2022/243, 27.6.2022, p. 10, ELI: EUR-Lex - 32022H0627(02) - EN - EUR-Lex. 
227 Homepage of Pact for skillshttps://pact-for-skills.ec.europa.eu/index_en. 

81 

 
 
 
Skills228 (2025) strengthens adult learning and ensures continuous skills development. One of 
its core strands, Upskill and reskill to ensure future-oriented skills, promotes wider participation 
in training by supporting the rollout of Individual Learning Accounts229, expanding micro-
credentials,  and  creating  innovative  community  learning  spaces  to  better  reach  low-skilled 
adults. New measures include a Skills Guarantee pilot for workers from the automotive sector 
at risk of unemployment, and stronger cooperation between public employment services and 
social services to improve basic skills and activate inactive adults. The accompanying Action 
Plan on Basic Skills230 reinforces the importance of foundational skills as a prerequisite for 
lifelong  learning.  The  Action  Plan  highlights,  among  others,  the  importance  of  innovative 
community learning spaces to help develop adults’ basic skills. It also recognises digital skills 
as part of the essential skill set for modern life and includes several key measures to promote 
inclusion  and  digital  empowerment,  including  piloting  a  basic  skills  support  scheme  and 
promoting  quality  materials  on  digital literacy  and  cybersecurity  through  initiatives  like  EU 
Code  Week.  Together,  these  initiatives  aim  to  make  training  more  accessible  and  inclusive, 
helping adults adapt to labour market change, reduce unemployment risks and prevent poverty. 
The  Council  recommendation  on  improving  the  provision  of  digital  skills  and 
competences in education and training (2023)231, delivered under the European Education 
Area strategic framework and under the Digital Education Action Plan, supports Member States 
in promoting a quality, inclusive and consistent approach to the development of digital skills. 
It articulates the steps needed to promote digital skills development from early on and at all 
stages of education and training.  

The  European  Digital  Skills  Awards  recognise  and  reward  projects  and  organisations 
dedicated to empowering individuals with essential digital skills. They include a category on 
Inclusion in the Digital world, which addresses particularly old people, refugees, persons with 
disabilities, and low-income groups, spotlighting initiatives that improve access to devices and 
training, from basic digital skills to ICT career pathways232.  

The  2022  Council  Recommendation  on  European  approach  to  micro-credentials  for 
lifelong  learning  and  employability233  aims  to  create  a  common  framework  (definition, 
standards  and  principles)  for  micro-credentials  across  EU  Member  States  so  that  they  are 
quality-assured, transparent, recognisable and portable within education and training and job 

228  European  Commission, 
https://commission.europa.eu/topics/competitiveness/union-skills_en.https://commission.europa.eu/topics/eu-
competitiveness/union-skills_en. 

of  Skills’,  Competitiveness, 

28  April 

accessed 

‘Union 

2026, 

229OJ C, C/2022/243, 27.6.2022, p. 26, ELI:  EUR-Lex - 32022H0627(03) - EN - EUR-Lex. 
230  European  Commission,  Action  Plan  on  Basic  Skills,  2026,  https://education.ec.europa.eu/document/action-
plan-on-basic-skills-legal-document.https://education.ec.europa.eu/document/action-plan-on-basic-skills-legal-
document. 
231 OJ C, C/2024/1030, 23.1.2024, ELI: http://data.europa.eu/eli/C/2024/1030/oj. 
232 European Commission, ‘EDSA25 Awards: Category  – Inclusion in a Digital World’, Digital Skills and Jobs 
Platform,  accessed  28  April  2026,  https://digital-skills-jobs.europa.eu/en/edsa25-awards-category-inclusion-
digital-world.https://digital-skills-jobs.europa.eu/en/edsa25-awards-category-inclusion-digital-world. 

233OJ C, C/2022/243, 27.6.2022, p. 10, ELI: EUR-Lex - 32022H0627(02) - EN - EUR-Lex. 

82 

 
 
 
markets  in  the  EU.  The  Recommendation  explicitly  suggests  using  micro-credentials  to 
improve access to education and training for all learners, including people who face barriers 
due to socioeconomic status, disabilities, age or other vulnerabilities. 

•  Next steps 

Further development of individual learning accounts and micro-credentials in the Member 
States will be supported, as these require more comprehensive steps and systemic reforms. 
When  developing  these  initiatives,  special  attention  has  to  be  paid  to  adults  from 
disadvantaged backgrounds, in order to make these initiatives relevant to their needs. 

Ensuring adequate public infrastructure – venues, equipment and appropriate personnel – is 
essential to boost local initiatives that create more learning opportunities around the needs of 
low-skilled adults through various partnerships. The Action Plan on Basic Skills includes 
an  action  on  innovative  community  learning  spaces  to  help  develop  adults’  basic  skills, 
starting already in 2026.234 

As announced in the Union of Skills package, the Commission will present a 2030 Roadmap 
on the Future of Digital Education and Skills to be adopted by the end of 2026 to ensure 
universal access to digital learning and guide EU action towards more inclusive, resilient and 
future-oriented education systems in the age of artificial intelligence. 

The Skills Portability Initiative is a package of 3 interrelated actions presented under the 
Union of Skills and is part of the Fair Labour Mobility package. It aims to remove barriers 
to the free movement of workers in the EU related to skills and qualifications, and to make 
the EU labour market more attractive to global talent. It will speed up the portability of VET 
qualifications, opening more opportunities for workers and jobseekers across the EU labour 
market. 

4.1.3.1.3. Social economy and micro-finance 
The social economy plays a growing and vital role in tackling poverty and social exclusion 
across  the  EU.  Comprising  cooperatives,  mutual  societies,  associations,  foundations,  and 
social  enterprises,  the  social  economy  prioritises  people  and  social  objectives  over  profit 
maximisation. With over 4.3 million organisations employing more than 11.5 million people in 
the EU, the social economy contributes to building more inclusive, resilient, and sustainable 
communities. It does so by expanding access to essential services, integrating disadvantaged 
groups into the labour market, and fostering inclusive local development.235 

One of the main ways the social economy addresses poverty is by creating quality jobs for 
disadvantaged  groups,  including  the  long-term  unemployed  individuals,  persons  with 
disabilities, migrants, and those at risk of social exclusion. Work integration social enterprises, 

234 European Commission, Action Plan on Basic Skills, 2025.  
235 OECD/European Union, ’Social Economy in Europe: Contributing to Competitiveness and Prosperity‘, Local 
Economic  and  Employment  Development  (LEED),  2025;  ILO,  ’Decent  work  and  the  social  and  solidarity 
economy‘, 2022. 

83 

 
 
 
 
in particular, focus on employing people who face barriers to entering the mainstream labour 
market.236 

Spotlight on Czechia, Hungary, Poland and Slovakia 

The HomeLab project in Czechia, Hungary, Poland, and Slovakia simultaneously addressed 
the interlinked problems of homelessness, poverty, and a lack of work opportunities. It started 
from the observation that housing problems and unemployment must be solved together. The 
project  aimed  to  support  vulnerable  households  out  of  their  precarious  circumstances  by 
helping  them  find  suitable  and  affordable  housing,  simultaneously  boosting  their 
employment  and  social  prospects.  A  key  factor  for  the  success  of  the  project  was  its 
implementation  through  social  economy  entities,  who  had  the  expertise  to  reach  out  to 
vulnerable and marginalised groups and to provide tailored support to them. Social economy 
actors  also  acted  as  intermediaries  between  groups  in  vulnerable  situations  and  housing 
providers. The project has potential for replication and scaling up elsewhere, but for long-
term  success  and  sustainability  of  the  initiative,  improved  access  to  finance  for  social 
economy entities would be helpful. 

Beyond  employment,  social  economy  entities  also  deliver  key  services  that  directly 
alleviate poverty and improve living conditions, while supporting working conditions in 
often  low-paid  and  feminised  sectors.  These  services  range  from  affordable  housing  and 
childcare to healthcare, education, and social care. They often work in partnership with public 
authorities to ensure that groups in vulnerable situations have access to basic needs: charities 
and other organisations within the social economy provide frontline support to people facing 
severe poverty and social exclusion, for example through food aid, homeless shelters, second-
hand  shops  and  emergency  social  services.  These  services  help  to  meet  people’s  immediate 
needs and can connect them to longer-term support and inclusion pathways. 

The  social  economy  also  fosters  local  development,  especially  in  rural,  remote,  and 
economically disadvantaged regions. By mobilising local resources and reinvesting locally, 
including  through  shorter  supply  chains,  social  economy  initiatives  can  generate  economic 
activity,  support  small  businesses,  and  build  social  capital.  This  localised  approach  helps 
prevent  depopulation,  promotes  territorial  cohesion  and  resilience,  and  ensures  that 
opportunities for economic participation are more evenly distributed across the EU. 

Microfinance  is  a  related  tool  to  fight  poverty  and  financial  exclusion  by  supporting 
entrepreneurship among groups in vulnerable situations. By providing microcredits (loans 
design  to  the  repayment  capacity  and  needs  of  the  beneficiaries)  together  with  training  and 
follow-up to people who lack access to traditional banking, microfinance enables individuals 
to  start  or  expand  small  businesses  and  generate  income.  The  financial  inclusion  which 
microfinance provides to vulnerable groups is an important step for their social inclusion. 

236  See  ENSIE,  Impact  WISEs,  2025. The  Impact-WISE  Study  2025,  based  on  data  from  2024,  provides  new 
insights into the crucial contribution of Work Integration Social Enterprises (WISEs) across Europe. 

84 

 
 
 
 
By  giving  vulnerable  people  the  means  and  confidence  to  turn  their  ideas  into  viable 
businesses, they will improve their living conditions.  To make these efforts more effective 
and  sustainable,  microfinance  is  increasingly  combined  with  non-financial  support  such  as 
business training, financial literacy, mentoring, and networking opportunities. This integrated 
approach not only helps beneficiaries manage their loans responsibly but also increases their 
chances of long-term success. Several studies have shown that the socio-economic return for 
every euro invested in socially targeted micro-finance initiatives is around five euros.237 

•  EU instruments in place  

The  European  Action  Plan  for  the  Social  Economy  (2021)  aims  to  create  favourable 
conditions  for the social economy’s growth  and recognition,  improve access  to  finance, and 
promote  social  innovation.  In  the  report  on  a  “mid-term  review  of  the action  plan  for  the 
social economy: main achievements and way forward” (2026), the Commission took stock of 
progress  achieved 
the  Council 
recommendation on developing social economy framework conditions (2023) provides a 
common  framework  for  Member  States  to  integrate  the  social  economy  into  their  policies, 
including  poverty  alleviation  initiatives,  and  establish  supportive  measures  to  foster  a 
favourable environment for social economy organisations. 

to  date  and  announced  new  action.  In  addition, 

The  Social  Investment  and  Skills  Window  of  InvestEU  supports  the  social  economy  by 
facilitating  access  to  finance  for  microenterprises  and  social  enterprises,  and  by  supporting 
investment in skills and education as well as social infrastructure. This support, in particular 
the provision of microcredits to microenterprises and the provision of affordable social housing, 
contributes to addressing social exclusion and to moving people out of poverty.  

The EU Code of good conduct for Microcredit provision238, launched in 2011, had become 
over  the  years  a  cornerstone  for  good  practices  in  the  European  microfinance  sector, 
strengthening  governance,  transparency  and  professionalism  among  providers.  The  Code  of 
Good Conduct guarantee that all organizations avoid over-indebtedness, assess the repayment 
capacity of the beneficiaries, the viability of their business proposal and support with training 
during all the phases of the business activity. In that sense, it allows to support the potential of 
micro-finance in supporting entrepreneurship among the most vulnerable and fighting poverty.  

•  Next steps 

Building on the findings of the mid-term review of the Social Economy Action Plan, new and 
strengthened actions have been set out to address persistent challenges to the development of 
the social economy. These actions aim to support public administrations in delivering on the 
ground, enable social economy organisations to operate in the single market without barriers, 
reinforce access to talent, training and finance, and strengthen the evidence base and visibility 
the social economy needs in order to be fully recognised. Energy cooperatives, for instance, can 

237 Etude d’impact socio-économique et Retour Social sur l’Investissement (SROI), Archipel & Co, Les Etudes de 
l’Adie, 2025. 
238  European  Commission,  'European  Code  of  Good  Conduct  for  Microcredit  Provision',  Employment,  Social 
Affairs & Inclusion, accessed 28 April 2026.   

85 

 
 
 
help  reduce  energy  poverty.  The  Commission  will  also  analyse  with  the  OECD  if  and  how 
social economy  can be a good tool against undeclared work in  several  sectors such as care, 
cleaning or construction. 

The Commission will continue to support the microfinance sector by way of financial and non-
financial means. As regards the latter, a comprehensive revision of the European Code of 
Good Conduct for Microfinance Provision has been initiated with the aim of enhancing the 
visibility  and  recognition  of  the  microfinance  sector  and  of  facilitating  the  provision  of 
microfinance support throughout Europe.  It may include social reporting in line with the targets 
of the Europea Pillar of Social Rights Plan of Action. 

The  Commission  will  soon  launch  a  call  for  Inclusive  Incubation  and  Finance  for  More 
Entrepreneurs, targeting under-represented groups in entrepreneurship, among which the most 
vulnerable. 

Looking  ahead,  opportunities  could  be  explored  together  with  the  EIB  group  to  further 
strengthen the access to financial services for micro and social entrepreneurs through the use of 
financial instruments, including encouraging Member States to allocate resources to such policy 
priorities through Member State compartments. 

4.1.3.1.4. Integration of migrants and people with migrant background 
Enhancing  migrants’  socio-economic  integration  and  labour  market  participation  is 
essential to reduce their risk of poverty and social exclusion. Coherent migration and social 
policies,  coupled  with  effective  integration  measures,  are  essential  for  retaining  talent  by 
ensuring newcomers can fully participate in the labour market and society. The most effective 
measures to facilitate labour market integration combine language training, civic orientation, 
skills development, and recognition of qualifications obtained abroad. Subsidised employment 
schemes and job search assistance can further support inclusion, although access is sometimes 
limited by visa restrictions or lack of awareness. 

The integration of migrants into the labour market varies across different groups, reflecting a 
range  of  circumstances  and  barriers.  Individuals  seeking  protection,  those  who  have  been 
granted  international  protection  and  family  members  arriving  through  family  reunification 
processes tend to encounter greater challenges in accessing employment and integration into 
the labour market. This situation points to the need for measures that are better adapted in their 
specific situations, in order to support their long-term inclusion. A gender-disaggregated design 
of  integration  and  employment  is  also  necessary.  Migrant  women  in  particular  face  lower 
employment  rates,  pointing  to  specific  barriers  in  accessing  the  labour  market.  Available 
indicators  are  disaggregated  by  gender,  allowing  gaps  to  be  identified  and  supporting  more 
target policy responses. 

86 

 
 
 
 
 
Spotlight on Poland  

The Centres for Foreigners’ Integration are a new network of institutions supporting migrants 
in adapting to life in Poland. Their creation was driven by the large influx of refugees from 
Ukraine  after  2022,  which  revealed  the  need  for  permanent,  professional  integration 
structures. The main goal of the centres is to provide coordinated services in a “one-stop-
shop” model. They offer Polish language courses, legal counselling, psychological support, 
and assistance with administrative procedures. An important component is also intercultural 
education and orientation in the Polish legal and social systems.  The initiative is financed 
both by the Asylum, Migration and Integration Fund (AMIF) and the European Social Fund 
Plus (ESF+).  Centres are being established across the country, forming a unified national 
network of support. Their aim is to improve migrants’ access to services and strengthen their 
independence  in  social  and  professional  life.  As  a  result,  the  centres  have  become  a  key 
instrument of Poland’s modern integration policy. 

A  related  issue,  important  for  the  fight  against  poverty,  is  combatting  trafficking  in 
human  beings  (THB).  Trafficking  takes  different  forms,  such  as  labour  and  sexual 
exploitation, forced begging and forced criminality. In EU as a whole, 28% of all THB victims 
are exploited in their own country. Another 8% of THB victims are from other EU countries.239 
Most victims in the EU are non-EU nationals, however they can also be legally residing in the 
EU. 

•  EU instruments in place 

The  European  Asylum  and  Migration  Management  Strategy240  sets  out  the  EU’s 
commitment to a fair and robust framework for managing migration in cooperation with partner 
countries, while upholding European values. It aims to provide protection to those in need and 
attract talent and skills to support the EU’s competitiveness, including by fighting the illegal 
employment and exploitation of migrant workers and improving their integration. 

The  EU  Action  Plan  on  Integration  and  Inclusion  2021-2027241  aims  to  address  the 
challenges linked to migration and to promote the integration of migrants and EU citizens with 
a migrant background. It builds upon the previous 2016 Action Plan and is part of the broader 
New Pact on Migration and Asylum. The Action Plan is structured around four main themes: 
(i) Education; (ii) Employment; (iii) Health; (iv) Housing. 

239 Eurostat, 'Eurostat News Release: 9 678 registered victims of human trafficking in 2024', Eurostat News, 29 
January 2026, accessed 29 May 2026, https://ec.europa.eu/eurostat/web/products-eurostat-news/w/ddn-20260129-
1. 
240 European Commission, European Asylum and Migration Management Strategy, Migration and Home Affairs, 
2026, https://home-affairs.ec.europa.eu/european-asylum-and-migration-management-strategy_en. 
241  European  Commission,  Action  Plan  on  Integration  and  Inclusion  2021-2027,  Publications  Office  of  the 
European  Union,  2021,  https://op.europa.eu/en/publication-detail/-/publication/bb47d489-a2b1-11eb-9585-
01aa75ed71a1/language-en 

87 

 
 
 
 
The  Single  Permit  Directive  (EU)  2024/1233242  aims  to  ensure  fair  treatment  of  non-EU 
workers  legally  residing  in  a  Member  State  and  at  preventing  exploitation.  It  gives  non-EU 
workers the right  to  be treated  equally to  nationals  of EU Member States in  many respects. 
These include working conditions, such as pay, working hours, health and safety requirements, 
education and training, certain branches of social security, recognition of qualification and tax 
benefits. 

The Pact on Migration and Asylum, which becomes applicable in June 2026, establishes a 
legal framework to enhance the effective management of external borders and set up fast and 
efficient  procedures  for  asylum  and  return,  while  ensuring  strong  safeguards.  Among  its 
objectives, it aims to enhance the integration of applicants and beneficiaries of international 
protection by improving access to education, labour market, procedures for the recognition of 
qualifications and the validation of skills, social security and social assistance entitlements and 
integration measures. These enhanced rights seek to promote the autonomy of the applicants 
and beneficiaries, reduce their dependency, and foster social integration, while mitigating the 
risk of poverty. 

The  EU  Strategy  on  combating  trafficking  in  human  beings  provides  a  comprehensive 
response to trafficking – from preventing the crime and protecting and empowering victims to 
bringing traffickers to justice. 

•  Next steps 

In  future,  the  Commission  will  continue  to  closely  monitor  the  implementation  of  these 
initiatives and to provide support to Member States to facilitate the effective enactment  and 
application of the Pact on Migration and Asylum.  

As announced in the very first European Asylum and Migration Management Strategy, the 
Commission  will  promote  a  comprehensive,  cross-policy  approach  to  integration,  ensuring 
alignment between migration, regional development and labour market policies.  

A renewed THB Strategy, building on the current one, is planned for adoption in Q4 2026. 

4.1.3.2. Addressing in-work poverty 

Addressing in-work poverty requires a combination of measures, reflecting its multiple drivers. 
It entails quality jobs, which offer adequate wages and do not lead to involuntary low-work 
intensity. Well-designed social protection systems are key to ensure workers do not fall into 
poverty when temporarily out of work. Finally, income support schemes for workers have a 
role to play to support those transitioning towards full-time employment. 

4.1.3.2.1. Quality jobs as a shield against poverty 
The quality of jobs available and accessible to those in more vulnerable situations is an 
important factor in determining whether workers are effectively protected from the risk 

242 OJ L, 2024/1233, 30.4.2024, ELI: http://data.europa.eu/eli/dir/2024/1233/oj. 

88 

 
 
 
 
 
of poverty and social exclusion. In order to reduce and prevent in-work poverty it is crucial 
that  deficits  in  decent  working  conditions  are  addressed,  with  a  view  of  ensuring  adequate 
minimum  income  security  for  workers,  regardless  of  their  educational  attainment,  sector  of 
employment,  migration  status,  etc.,  and  their  families,  across  household  compositions  (for 
access to social protection see chapter 4.1.3.2.3).  

Effective implementation of minimum wage legislation, respect for collective agreements, 
and strong social dialogue are key. In-work poverty is closely linked to low monthly wages, 
with one in five workers who earn two-thirds or less of the national median monthly wage being 
at risk of poverty. Enforcing adequate wage protection is particularly important to prevent and 
reduce  the  poverty  risk  of  single-earner  households,  and  above  all  of  single-parent 
households.243 Simulations point to potential significant in-work poverty reduction effects of 
enforcing a minimum wage equal to 60% of the median wage in Member States where the rate 
is especially high, although effects on overall poverty rates would be more limited.244 A reason 
that might explain this more limited impact of the minimum wage on overall poverty is that 
many  low  wage  workers  are  part  of  non-poor  households  and  thus,  while  their  individual 
welfare would benefit, it would not be reflected in changes in the overall poverty rate. Evidence 
suggests an existence of a migrant pay gap, particularly pronounced for women and for migrant 
care workers.245 

Beyond adequate wages, it is important to address the issue of precarious jobs. The fact 
that in-work poverty is more prevalent for individuals who are in part-time employment than 
for  full  time  employees  –  12.6%  vs.  7%  -  underscores  that  policies  aimed  at  reducing 
involuntary part-time work by addressing its drivers hold high potential for in-work poverty 
reduction.  Some  of  the  causes  of  involuntary  low  work  intensity  can  be  traced  to  the  legal 
framework that governs labour markets, which should be revised to minimise the overreliance 
and, in  some cases,  abuse of non-standard contract  types, including  zero-hour contracts and 
voucher-based work. In other cases, the labour law might fail to provide work incentives to 
employees and even end up incentivising employers to declare workers are employed on a part-
time basis, and to have them work the remaining hours under informal work arrangements, at a 
lower  standard.  While  it  is  important  to  reduce  the  incidence  of  involuntary  part-time,  such 
efforts need to be complemented by an expansion in enabling services to avoid driving workers 
out of employment. In particular, it is important to close gaps in access to affordable childcare 
and long-term care services, as well as address unmet healthcare and wellbeing needs, so that 
increased  working  hours  can  be  more  easily  reconciled  with  personal  needs  and  family 
responsibilities (see section 4.2.3 on services). 

243  European  Commission:  Directorate-General  for  Employment,  Social  Affairs  and  Inclusion,  ’Who  are  the 
working poor? – An analysis of in-work poverty in the EU‘, Publications Office of the European Union, 2026, 
https://data.europa.eu/doi/10.2767/1170646. 
244  International  Monetary  Fund,  ’A  European  Minimum Wage:  Implications  for  Poverty  and  Macroeconomic 
Imbalances‘, Working Paper WP/20/59, 2020. 
245  ILO,  ’The  migrant  pay  gap:  Understanding  wage  differences  between  migrants  and  nationals‘,  2020, 
https://www.ilo.org/sites/default/files/wcmsp5/groups/public/@ed_protect/@protrav/@migrant/documents/publi
cation/wcms_763803.pdf 

89 

 
 
 
Dedicated  measures  should  be  put  in  place  to  protect  self-employed  workers  from  the 
specific poverty risks impacting them. Due to the nature of their contractual arrangements, 
the  self-employed  are  more  likely  to  experience  gaps  in  their  effective  labour  and  social 
protection, with detrimental effects for their income and job security. Self-employed workers 
lack  protection  around  their  compensation,  as  they  are  not  covered  by  minimum  wage 
standards, and are subject to more variable work intensity, due to varying demand or the casual 
and seasonal nature of their employment, which are all risk factors when it comes to in-work 
poverty. Additionally, they are less likely to enjoy full social protection coverage, especially of 
sickness, parental and unemployment benefits,  which is an important factor in their reduced 
income  security  (see  4.1.3.2.3  and  4.1.3.2.4  for more  details).  Labour  law  reforms  aimed  at 
reducing segmentation are key to reducing job quality gaps between employees and the self-
employed.  

Promoting  quality  jobs  also  means  preventing  and  combating  undeclared  work.  It  is 
important  to  create  safe  pathways  into  formal  employment,  through  measures  that  combine 
deterrence and elimination of undeclared work with transition into the formal economy – such 
as simplified transition schemes, incentives for formalisation, stronger labour inspection, and 
tailored  support  for  workers  and  micro-enterprises.  For  vulnerable  workers  unregistered, 
employment might be their sole means to provide for themselves and their families, which is 
why prevention should be prioritised. It is important to focus enforcement resources on the most 
exploitative  arrangements  while  providing  supportive  transition  pathways  for  vulnerable 
workers.  This  is  supported  by  Eurobarometer  data  of  2019,  which  suggests  that  undeclared 
workers see some sort of benefit in their informal arrangement (32% of respondents), and that 
there is an increase in the share of undeclared workers that no longer believe in the positive 
returns  of  paying  into  the  state  budget  and  social  security  (11%,  up  from  5%  in  2009).246 
Restoring faith and quality jobs opportunities in the formal labour market and public service 
provision is central.  

Spotlight on France  

The Universal Service Employment Voucher (CESU) is a pre-financed voucher issued by 
government-authorised companies meant to be used to pay for the services of a home-based 
employee in the personal service and care sectors. It encourages the declaration of domestic 
workers by providing financial incentives, in the form of tax exemptions and social security 
contribution subsidies, for both the employer and employee. Registration is also encouraged 
through administrative simplification, via the introduction of a dedicated CESU declaration 
tool.  The  CESU  voucher  system  has  been  found  to  have  positive  effects  on  formal  job 

246  Trends  in  the  undeclared  economy  and  policy  approaches.  Evidence  from  the  2007,  2013  and  2019 
Eurobarometer surveys, 2020, https://www.ela.europa.eu/sites/default/files/2022-06/KE-02-20-972-EN-N_0.pdf. 
90 

 
 
 
 
creation  in  targeted  sectors,  an  estimated  reduction  of  undeclared  work  by  30  percentage 
points between 1996 and 2015, and a consequent increase in social protection coverage.247 

Work-life balance policies help workers reconcile professional and family responsibilities, 
particularly  through  measures  such  as  paternity  and  parental  leave,  flexible  working 
arrangements  and  carers’  leave.  The  establishment  and  effective  implementation  of  these 
measures  help  workers  avoid  a  reduction  in  household  work  intensity  when  faced  with 
increased  caring  responsibilities,  and  thus  they  act  as  a  form  of  income  protection.  This  is 
particularly relevant for lower income households, for whom relying on paid care services is 
not an option or would otherwise represent a major burden relative to their disposable income. 
In combination with improved access to care services, work-life balance policies can improve 
women’s standing in the labour market and therefore help decrease their risk of poverty and 
social exclusion.  

• 

EU instruments in place 

The  Commission  Communication  on  a  Quality  Jobs  Roadmap  (2025)248  is  a  renewed 
commitment  to  fostering  quality  jobs  in  a  competitive  economy,  with  trade  unions  and 
employers playing a crucial role in this endeavour. The Roadmap addresses in-work poverty by 
promoting  adequate  wages.  It  also  covers  other  aspects  relevant  for  quality  jobs  to  shield 
working age adults against poverty, such as tackling labour exploitation, the need to improve 
the situation young people are facing in the labour market, notably with regards to precarious 
contracts, atypical forms of work and the informal economy, and the need to ensure fairness for 
the self-employed and non-standard workers. 

Directive (EU) 2022/2041 on adequate minimum wages249 aims to reduce in-work poverty 
by ensuring fairer minimum wages and stronger collective bargaining. Strengthening collective 
bargaining  would  expand  wage  coverage,  improve  wage  adequacy,  and  particularly  benefit 
low-paid  workers.  Clear  criteria  and  stronger  involvement  of  social  partners  is  expected  to 
reinforce wage setting and support a fairer business environment.  

Directive (EU) 2019/1152 on transparent and predictable working conditions250 provides 
more extensive rights and protections for workers across the EU. It addresses the need for clarity 
and predictability in employment relationships, especially considering the rise of non-standard 
and precarious forms of work, such as zero-hour contracts and platform work. 

The Framework Agreement on fixed-term work annexed to Directive 1999/70/EC251 forbids 
employers from discriminating fixed-term workers, in respect of employment conditions, vis-

247 European Labour Authority, Good practice – France: Universal Service Employment Voucher (Chèque emploi 
service universel - CESU), 2018, https://www.ela.europa.eu/sites/default/files/2021-09/FR%20-%20CESU.pdf. 
248 European Commission Communication COM/2025/944 of 4 December 2025 on Quality Jobs Roadmap 
249 OJ L, 2022/275, 25.10.2022, p. 33, ELI: http://data.europa.eu/eli/dir/2022/2041/oj. 
250 OJ L, 2019/186, 11.7.2019, p. 105, ELI: http://data.europa.eu/eli/dir/2019/1152/oj. 
251 OJ L, 1999/175, 10.7.1999, p. 43, ELI: http://data.europa.eu/eli/dir/1999/70/oj. 

91 

 
 
 
 
 
à-vis permanent workers. It also requires Member States to introduce measures to prevent abuse 
arising from the use of successive fixed-term employment contracts. 

The  Framework  Agreement  on  part-time  work  annexed  to  Directive  97/81/EC252  forbids 
discrimination of part-time workers in respect of employment conditions. That agreement also 
invites employers to consider, among others, requests to transfer from part-time to full-time or 
to  increase  working  time.  They  should  also  consider  providing  timely  information  on  the 
availability of full-time jobs. 

The Platform Work Directive253 aims to improve the working conditions of people working 
through digital labour platforms. It also seeks to support the sustainable growth of digital labour 
platforms  across  the  European  Union.  A  key  objective  of  the  Directive  is  to  facilitate  the 
determination of the correct employment status of persons performing platform work, including 
through the application of a legal presumption of an employment relationship. 

The Directive 2008/104/EC on Temporary Agency Work ensures the protection of agency 
workers  and  the  quality  of  agency  work.  The  Directive  establishes  the  principle  of  equal 
treatment for agency workers in user companies for the first day of their assignment. Equal 
treatment applies to basic working and employment conditions, notably pay and working time. 
Limited derogations are allowed under strict conditions. 

The European Labour Authority (ELA), established in 2019, ensures that labour mobility 
and social protection rules are applied fairly and effectively. By improving compliance with 
EU  labour  standards,  supporting  cross-border  cooperation  between  national  authorities,  and 
facilitating  joint  inspections,  the  ELA  helps  to  prevent  exploitative  working  conditions, 
undeclared work, and social dumping. Since its establishment, the ELA Enforcement Unit has 
supported more than 300 cross-border concerted and joint inspections (CJIs), of which around 
30% to 50% identify cases of undeclared work on a yearly basis, often in conjunction with other 
infringements such as fraud concerning posted workers, violations of social security legislation, 
underpayment, and illegal employment of non-EU nationals. Through its capacity building and 
knowledge  exchange  activities,  ELA  promotes  better  cross-border  working  conditions 
throughout  the  European  Union.  ELA  actively  supports  Member  States  in  tackling 
undeclared  work.  By  enhancing  collaboration  among  relevant  authorities  and  other 
stakeholders,  ELA  seeks  to  combat  undeclared  work  more  effectively  and  efficiently,  fully 
respecting national competences and procedures. 

Directive  (EU)  2023/970  on  equal  pay  through  pay  transparency254  strengthens  the 
enforcement of the principle of equal pay for equal work or work of equal value. By introducing 
pay transparency and combating pay discrimination, it seeks to eliminate gender pay gaps and 
structural biases undervaluing women’s jobs. These measures directly reduce wage inequality 
and indirectly contribute to lowering in-work poverty among women. 

252 OJ L, 1999/14, 20.1.1998, p. 9, ELI: http://data.europa.eu/eli/dir/1997/81/oj. 
253 OJ L, 2024/2831, 11.11.2024, ELI: http://data.europa.eu/eli/dir/2024/2831/oj. 
254 OJ L 132, 17.5.2023, ELI: http://data.europa.eu/eli/dir/2023/970/oj. 

92 

 
 
 
Directive on Work–Life Balance for Parents and Carers (EU) 2019/1158255 aims to improve 
access to family-related leave and flexible working arrangements, promoting gender equality 
in  the  labour  market  and  supporting  the  reconciliation  of  work  and  care  responsibilities.  It 
introduces minimum standards across the EU, including at least 10 working days of paid 
paternity  leave,  4  months  of  parental  leave  per  parent  (with  two  months  non-
transferable),  5  days  of  carers’  leave  per  year,  and  the  right  to  request  flexible  working 
arrangements  such  as  reduced  or  remote  work  for  parents  and  carers.  The  Directive  also 
strengthens protection against discrimination and dismissal for workers who take family-
related leave. Gaps in transposition and implementation persist. 

•  Next steps 

Following the adoption of the Quality Jobs Roadmap in 2025, the Commission will propose a 
Quality Jobs Act in 2026 to modernise and complement EU rules protecting workers while 
supporting productivity and competitiveness. In the first-stage consultation on the Quality Jobs 
Act, launched in December 2025, it is underlined that the issue of exploitative subcontracting, 
which is often associated with gaps in labour protection enforcement, low pay, job precarity 
and undeclared work, disproportionately affects workers with concurring vulnerabilities, such 
as low educational attainment or migrant background. 

As mentioned in the Anti-Poverty Strategy, the Commission will step up enforcement to ensure 
full transposition of the Directive on adequate minimum wages. 

The  Commission  will  finalise  the  assessment  of  the  implementation  of  the  Directive  on 
Work-Life  Balance  across  all  Member  States  and  produce  an  implementation  report, 
accompanied by two studies on rights of family leave for self-employed, and on interactions 
between the different types of leave provided for in the Directive and other types of family-
related leave. 

4.1.3.2.2. Improving the tax-benefit support for workers 
For those not working full-time or in stable jobs, income from work might not be sufficient 
to  protect  workers  from  falling  into  poverty  but  social  transfers  can  contribute  to 
reducing  in-work  poverty.  Effective  design  of  the  tax-benefit  system  ensures  overall 
household income progressively  and steadily increases as more income is derived  from 
work, and that households are not faced with abrupt loss of financial support when members 
enter employment. Taking up a job entails upfront “fixed costs”, most importantly childcare 
and transportation, relocation and housing in some cases, which can constitute a barrier to work, 
especially for integrating after periods of labour market exclusion, in the absence of continued 
social support. Indeed, a sudden withdrawal of benefits can create a “benefits trap”, where in 
the short-term individuals find it economically detrimental to work or increase their working 
hours. This can worsen overall monetary poverty and act as a disincentive to full labour market 
participation. Improving the design of social benefits and services so as to ensure they continue 

255 OJ L 188, 12.7.2019, ELI: http://data.europa.eu/eli/dir/2019/1158/oj. 

93 

 
 
 
 
and taper while moving into work ensures steady income support, helping people cover costs 
like childcare, transport, and training during the transition. 

When it comes to crafting measures to bolster the incomes of the working poor, details on 
their design matter greatly, and trade-offs need to be considered. Social transfers and tax 
credit  schemes  targeted  at  poor  households  can  effectively  reduce  in-work  poverty. 
EUROMOD simulations suggest that the introduction of household-based in-work benefits has 
the  potential  to  reduce  the  AROP  rate  by  2.3  percentage  points  in  Belgium  and  by  5.6 
percentage points in Austria, with even stronger effects when delayed labour supply responses 
are  factored  in.  While  challenges  such  as  non-take-up  can  limit  their  effectiveness,  well-
designed  household-based  in-work  benefits  show  potential  to  reduce  AROP.256  However, 
depending  on  how  the  means  test  is  designed,  in-work  benefits  might  create  adverse  work 
disincentives  for  second  earners,  often  women,  thus  undermining  their  individual  income 
security. In order to mitigate negative labour market outcomes, for instance, earnings disregards 
on the income of second earners might be considered. Additionally, concerns have been raised 
around the potential wage suppression effect of in-work benefits especially in low wage sectors, 
where  the  anticipated  top-up  might  make  employers  more  likely  to  offer  lower  wages,  and 
workers to accept them. This has not been substantiated by decisive evidence, but research has 
been limited. At any rate, it underlines the importance of strengthening collective bargaining, 
and  coverage  of  collective  bargaining  agreements,  as  well  as  adequate  wage  protections  to 
minimise any possible detrimental effect of in-work benefits on pay and earned income.257  

Finally, for working families, all other measures aimed at addressing the rising cost of 
living  are  crucial  to  reduce  their  exposure  to  poverty  and  social  exclusion  risks.  These 
include  family  and  child  benefits,  access  to  free  or  affordable  childcare  and  education  (see 
4.1.1), free or affordable healthcare and long-term care (see 4.1.4), housing support and benefits 
(see 4.2.2.8), disability benefits, energy benefits and subsidies (4.2.2.2), and other cost-of-living 
allowances. 

•  EU instruments in place 

Council  Recommendation  on  adequate  minimum  income  ensuring  active  inclusion 
(2023/C41/01) recommends that Member States provide “for the possibility to combine income 
support with earnings from work, a progressive phasing out of income support or retaining the 
right to income support during short or sporadic work, probation periods or traineeships” (11(c)) 
as well as to review the overall tax and benefit systems to tackle in-work poverty and avoid 
sudden loss of financial support on entering the labour market (11(d)). 

256 European Commission: Directorate-General for Employment, Social Affairs and Inclusion, ’Employment and 
Social Developments in Europe 2025:  Unlocking the potential of people: promoting higher employment in the 
EU’, Publications Office of the European Union, Luxembourg, 2025. https://data.europa.eu/doi/10.2767/9505984 
257 London School of Economics (LSE) Consulting,  Low pay and in-work poverty: preventative  measures and 
preventative  approaches,  2016,  https://www.lse.ac.uk/business/consulting/assets/documents/Low-Pay-and-In-
Work-Poverty.pdf. 

94 

 
 
 
 
Spotlight on Ireland 

Ireland’s Working Family Payment is an in-work benefit targeted at workers on low monthly 
earnings with children. It is a weekly transfer equal to 60% of average weekly family income 
and  the  limit  that  applies  to  the  household  based  on  its  composition,  therefore  it  tapers 
automatically as income from work increases. Once eligibility is established, the benefit is 
paid for 52 weeks, after which the recipient needs to apply for renewal. At the end of January 
2025,  47,000  households,  accounting  for  98,000  children,  were  receiving  the  benefit, 
representing  an  important  contribution  in  poverty  reduction  efforts.  In  fact,  according  to 
estimates from the Department of Social Protection and the Economic and Social Research 
Institute,  increasing  spending  on  the  Working  Family  Payment  could  have  high  potential 
returns  in  terms  of  poverty  reduction  among  the  working-age  population  and  children, 
pointing to its relatively higher efficacy in targeting and supporting households in need. 

•  Next steps 

As  announced  in  the  Anti-Poverty  Strategy,  in  2027,  the  Commission  will  put  forward  a 
Commission  Recommendation  providing  evidence-based  policy  guidance  to  prevent  and 
combat in-work poverty. The guidance will be developed in close cooperation with the social 
partners. It will outline the main drivers of in-work poverty and will elaborate best practices in 
particular to support shifts towards higher work intensity (and therefore higher incomes) and 
ensuring that tax-benefit systems are consistently aligned so that more hours worked translate 
into higher incomes. 

4.1.3.2.3. Adequate social protection to help individuals face risks 
Contributory social protection schemes aim to protect working people against key risks 
such as illness, unemployment, disability, or ageing. They support income security, and social 
and economic participation, notably labour market participation through transition to quality 
jobs and better matching via adequate unemployment benefits. As such, they are a key lever for 
preventing or reducing poverty risks. 

Most  social  protection  systems  were  originally  designed  around  standard  full-time 
employment.  However,  globalisation,  technological  change  and  demographic  ageing  have 
reshaped European labour markets over the past two decades and will continue to do so in the 
years  ahead.  In  2024,  almost  40%  of  workers  in  the  EU-27  were  in  non-standard  forms  of 
employment—such as temporary contracts, part-time work and/or self-employment. While this 
share has remained relatively stable, the precariousness and security of these jobs vary widely 
across Member States and groups of workers. As a result, many workers in non-standard or 
insecure jobs face gaps in social protection coverage, leaving them more vulnerable to income 
shocks and at higher risk of poverty and social exclusion. 

95 

 
 
 
 
 
The formal coverage258 by any social benefits for persons at risk of poverty varies widely 
across Member States. Formal coverage gaps for at least one group of non-standard workers 
were observed (in 2025) in eighteen Member States, particularly for unemployment, sickness 
and  maternity  or  paternity  benefits.259  For  the  self-employed,  coverage  gaps  were  found  in 
nineteen Member States and were most pronounced for unemployment, accidents at work and 
occupational diseases. Moreover, for some groups of workers or self-employed, access is only 
voluntary (opt-in schemes), with very uneven take-up across Member States.  

Beside  gaps  in  formal  coverage,  effective  access  to  social  protection  also  remains  a 
challenge. On average in the EU in 2024 (referring to 2023 incomes), the share of people in 
employment (16-64) receiving social benefits260 when being at risk of poverty (before social 
transfers)  was  around  30%,  close  to  levels  reached  before  the  COVID-19  pandemic,  due  to 
continuous decrease over the last few years. This share was on average higher among those 
with  temporary  contracts  (38.3%)  than  those  with  permanent  contracts  (23.3%)  and  higher 
among part-timers (30.1%) than for full-time workers (23.7%), and these patterns hold in most 
Member States. Still in 2024, around 63.1% of those unemployed for less than 12 months aged 
15-74 were not receiving any unemployment benefits/assistance (EU-LFS).261 

Social protection adequacy remains an issue. As a result, the social situation of people in 
non-standard work remains less favourable, even though social transfers reduce their poverty 
risks more than for other workers. In 2024, the poverty-reduction effect of social transfers was 
22–23% for temporary and part-time workers and 26.6% for the self-employed, compared with 
11.8%  for  all  workers.  Still,  monetary  poverty  remained  higher:  AROP  was  13.4%  for 
temporary  workers,  13.8%  for  part-timers  and  20.9%  for  the  self-employed,  compared  with 
much  lower  rates  for  permanent  or  full-time  employees.  Non-standard  workers  also  faced 
higher  social  and  material  deprivation  (e.g.  13.8%  for  temporary  vs  7.6%  for  permanent 
employees,  11.1%  for  part-timers  versus  7.4%  for  full-timers)  while  for  the  self-employed, 
there is significant variation across the EU (more so than for employees), with rates below 5% 
in more than half of Member States  contrasting with  higher levels  recorded in  others, up to 
23.6% in EL and 34.8% in RO. 

Existing gaps in access to social protection could put the welfare and health of individuals 
at risk and contribute to increased economic uncertainty, as well as higher risk of poverty 
and inequality. Addressing these gaps helps prevent and alleviate poverty and uphold a decent 
standard of living, while also contributing to competitiveness and sustainable growth. 

258  Formal  coverage  of  a  group  means  that  in  a  specific  social  protection  branch  (e.g.  old  age,  sickness, 
unemployment, maternity) the existing legislation or collective agreement states that the individuals in the group 
are entitled to participate in a social protection scheme covering a specific branch. 
259 EC/SPC-ISG, 2025 Update of the monitoring framework on access to social protection for workers and the 
self-employed. 
260 Special extraction by Eurostat of the recipient rate indicator for ‘effective access’ indicators of the monitoring 
framework on access to social protection. The target population is that at risk of poverty before social transfers. 
Social benefits covered in the indicator are those received at individual level, excluding old-age and survivors’ 
pensions. 
261 Source: Eurostat (online data code lfsa_ugadra). 

96 

 
 
 
Access to social protection should remain effective for EU citizens who exercise their right 
to mobility. This is why EU law in the field of social security provides for the coordination of 
the Member States' national social security systems. 

•  EU instruments in place 

The Council Recommendation on access to social protection262 (2019) urges Member States 
to  ensure that all economically active people, including the self-employed and non-standard 
workers,  are  covered  by  adequate  and  transparent  social  protection  schemes.  The  goal  is  to 
secure protection against life risks and income loss, helping people maintain living standards 
and avoid poverty. This approach strengthens resilience across working lives and supports more 
inclusive labour markets. 

Regulation  (EC)  No  883/2004263  on  the  coordination  of  social  security  systems  establishes 
common  rules  and  principles,  such  as  the  right  to  equal  treatment  and  the  prohibition  of 
discrimination, which must be observed by all national authorities when applying national law. 
The regulation and its implementing Regulation (EC) No 987/2009264 contain a complete and 
mandatory set of rules for determining which Member State’s legislation applies in individual 
situations. These rules ensure that persons that have exercised their right to free movement are 
not left without any social security protection. 

Spotlight on Belgium 

Following  the  adoption  of  the  Council  Recommendation  in  November  2019,  Belgium 
launched a holistic review of its social protection system and submitted a comprehensive 
national action plan in 2021. The plan outlined around 30  concrete measures, such as a 
bridging right (income support in case of bankruptcy or interruption of activity) to self-
employed  workers,  improving  formal  coverage  for  platform  workers  (e.g.,  workplace 
accident insurance) and for specific categories such as childminders, and plans to align the 
pension systems of employees and the self-employed, and to better match self-employed 
workers’ contributions to their contribution capacity. 

•  Next steps 

The European Commission and the Social Protection Committee will continue their joint efforts 
to monitor the implementation of the Council Recommendation on access to social protection. 
In particular, the European Commission will further support reforms at national level via new 
rounds of mutual learning programmes including by focusing more on groups at risk of poverty 
and improving and deepening the monitoring framework on access to social protection.  

262 OJ C, C/2019/387, 15.11.2019, p. 1, ELI: EUR-Lex - 32019H1115(01) - EN - EUR-Lex. 
263 OJ L, 2004/166, 30.4.2004, p. 1, ELI: https://eur-lex.europa.eu/eli/reg/2004/883/oj. 
264 OJ L, 2009/284, 30.10.2009, p. 1, ELI: https://eur-lex.europa.eu/eli/reg/2009/987/oj. 

97 

 
 
 
 
 
 
 
4.1.3.2.4. Unemployment protection and reduction 
Within social protection, unemployment protection has a specific role to play in the fight 
against  poverty.  Contributory  unemployment  benefits  are  crucial  in  supporting  workers 
through loss of employment, but their coverage and adequacy should be improved, especially 
for workers in non-standard forms of employment (see Section 4.1.3.2.3 for further information 
on access to social protection). A recent estimate based on EU-SILC data found the EU average 
coverage of contributory unemployment benefits to be around 62%, with important variations 
between Member States. Focusing on those unemployed for less than 12 months, the EU-LFS 
indicate  that  around  three  fifths  of  the  registered  unemployed  received  benefits  in  2024; 
however when considering all the unemployed (registered or not) the share falls to 37% and 
was below 25% in six Member States. Adequacy is harder to estimate, but existing information 
on  effective  replacement  rates  point  to  persistently  low  adequacy  in  a  number  of  Member 
States.265 Self-employed individuals and workers with fragmented work history exhibit lower 
rates of coverage and adequacy across several Member States, due to both legal and effective 
(financial) obstacles to their eligibility.266 These benefits should be accompanied by support to 
reintegrate  into  the  labour  market.  Active  labour  market  policies  and  other  programmes 
delivered by public employment services have a proven track record in aiding the re-entry of 
the unemployed into work, thus preventing protracted exclusion and poverty from entrenching 
(see Section 4.1.3.1.1). 

In addition to protecting workers when they experience unemployment, fighting poverty 
also means helping to prevent unemployment. Dedicated measures should be put in place to 
increase the job and income security of all workers, especially those in sectors, occupations and 
contractual  arrangements  that  are  more  exposed  to  economic  shocks  and  structural 
readjustments. This encompasses interventions before employment termination occurs, in order 
to  minimise  the  impact  of  business  restructuring  on  workers  and  their  incomes,  as  well  as 
actions  to  manage  the  consequences  in  light  of  loss  of  employment,  which  entails  ensuring 
coverage and adequacy of contributory unemployment protection, as well as active support to 
a smooth and timely return to work. 

With  a  view  of  preventing  unemployment,  and  thereby  risk  of  poverty,  in  response  to 
shocks or as part of transitions, policy frameworks should also facilitate social dialogue 
and workers’ involvement in restructuring processes. When companies and sectors undergo 
financial loss and business contraction, workers, especially those with lower qualifications, less 
work experience and overall lower job security, face disproportionate losses to their income as 
a consequence of restructuring.  These effects  are bound to  grow more relevant  as European 
economies  transform  under  environmental,  technological  and  demographic  pressures,  and 

265 European Commission: Directorate-General for Employment, Social Affairs and Inclusion, Aprea, M., Raitano, 
M. and Subioli, F., Actual generosity of unemployment benefits in EU countries – A data-driven approach, 2025, 
https://data.europa.eu/doi/10.2767/8736150. 
266 European Commission, ’Access of non-standard workers and self-employed to the unemployment insurance‘, 
2025, Publications Office of the European Union, Luxembourg. 

98 

 
 
 
 
having the right policy environments is place is  bound to become more important. Relevant 
measures  include  encouraging  long-term  monitoring  of  evolving  job  and  skill  needs, 
forecasting  and  proactive  management  of  the  workforce  at  the  company  level,  with  full 
involvement of workers’ representatives, with a view of minimising redundancies and offering 
active support wherever possible. 

Increasingly,  job  retention  schemes  have  played  an  important  role  in  cushioning  the 
fallout  of  economic  crises,  with  the  COVID-19  emergency  showcasing  the  continued 
importance of a long-standing feature of several European systems. Job retention schemes can, 
in the short- and long-term, compensate for a partial reduction in working hours while ensuring 
continuity in employment and compensation, reducing impact for workers, companies and the 
economy overall. An analysis found that job retention schemes absorbed the largest share of 
household income shocks in 2020, in the wake of the COVID-19 pandemic, estimated at 37.4% 
of  the  total  loss,  with  their  impact  being  greatest  at  the  bottom  of  the  income  distribution, 
indicating  they  can  be  effective  tools  of  poverty  reduction  and  support  for  the  most 
vulnerable.267 

•  EU instruments in place 

The Commission Communication on a Quality Jobs Roadmap (2025)268 (see 4.1.3.2.1. for 
more information) also covers aspects related to involvement of workers in matters of business 
and sectoral restructuring, especially in the context of just transitions, with a view of promoting 
fair change management and anticipation.  

The  2013  EU  Quality  Framework  for  Anticipation  of  Change  and  Restructuring269 
provides guidance to all stakeholders involved in restructuring processes – employers, workers 
and  their  representatives,  as  well  as  local  authorities  –  to  anticipate  and  manage  the 
consequences, reconciling competitiveness and fairness objectives. This is complemented by 
EU  legislation,  in  particular  Directive  2002/14/EC  of  the  European  Parliament  and  of  the 
Council  of  11  March  2002  establishing  a  general  framework  for  informing  and  consulting 
employees in the European Community, and Directive 98/59/EC on the approximation of the 
laws of the Member States relating to collective redundancies. 

The EU Adaptation Strategy270 (2021) aims to enhance the EU's resilience to climate change 
and underscores the importance of collaboration to achieve both adaptation and social justice 
goals. It emphasises procedural justice and the involvement of social partners in human capital 
investment planning, while promoting economic diversification and the transition of workers 
to green growth sectors. The EU Mission on Adaptation to Climate Change funds projects 

267 Eurofound, ’Weathering the crisis: How job retention schemes preserved employment and incomes during the 
pandemic‘, Publications Office of the European Union, Luxembourg, 2024. 
268 European Commission Communication COM/2025/944 of 4 December 2025 on Quality Jobs Roadmap 
269 European Commission Communication COM/2013/882 of 13 December 2013 on a EU Quality Framework for 
anticipation of change and restructuring  
270  European  Commission  Communication  COM/2021/82  of  24  February  2021  on  Forging  a  climate-resilient 
Europe – the new EU Strategy on Adaptation to Climate Change  

99 

 
 
 
that enhance the climate resilience of vulnerable social groups, identifying and testing equitable 
adaptation actions and solutions. 

The Council Recommendation on ensuring a fair transition towards climate neutrality271 
(2022), adopted as part of the Fit for 55 package, provides practical guidance to Member States 
on addressing the employment and social dimensions of the green transition. It calls for a whole-
of-society approach, integrating fairness across all policies and governance levels, and ensuring 
the  meaningful  participation  of  stakeholders.  The  Recommendation  promotes  quality 
employment,  job-to-job  transitions,  and  equal  access  to  inclusive  education,  training,  and 
lifelong learning. It also encourages fair tax-benefit and social protection systems and improved 
access  to  affordable  essential  services  and  housing.  The  recent  review  of  the  Council 
Recommendation on a fair transition shows that Member States made progress to put active 
labour market policies in place supporting workers most affected by the transition.  

Finally, as announced under the Clean Industrial Deal, the Commission launched in March 2026 
a European Fair Transition Observatory to improve evidence, develop indicators, and share 
best practices on the social and employment impacts of the green transition. The Observatory 
will  help  track  progress  on  fairness,  job  quality,  reskilling,  investment  needs,  and  access  to 
essential services. 

Spotlight on Sweden 

In  2022,  on  the  basis  of  an  agreement  and  a  proposal  from  trade  unions  and  employers’ 
organisations, Sweden introduced a set of measures to enhance preparedness and resilience 
of  companies  and  workers  to  structural  transitions  and  adjustments,  with  a  view  of 
anticipating and preventing loss of employment. This Transition Package improves access to 
training support for potentially affected workers, including through the introduction of a new 
transition study allowance, as well as to a new transition and skills support scheme, designed 
to be adaptable and tailored to sectoral and individual circumstances. These services, as well 
as complementary employment support services, are delivered by “job security and transition 
councils”,  which  are  also  tasked  with  monitoring  and  assessing  the  changes  need  of  their 
sector  and  local  labour  market,  ensuring  full  involvement  of  workers  in  designing  and 
implementing solutions.  

•  Next steps 

Following the adoption of the Quality Jobs Roadmap in 2025, the Commission will propose a 
Quality Jobs Act in 2026 to modernise and complement EU rules protecting workers while 
supporting  productivity  and  competitiveness.  As  part  of  this  initiative,  as  highlighted  in  the 
document for the 1st stage consultations of social partners, potential EU action could strengthen 

271 OJ C, C/2022/243, 27.6.2022, p. 35, ELI: EUR-Lex - 32022H0627(04) - EN - EUR-Lex. 

100 

 
 
 
 
 
early  involvement  of  workers  in  restructuring  decisions  and  promote  social  dialogue  in  just 
transitions.  

In  line  with  the  Commission’s  simplification  agenda,  the  Council  Recommendation  on 
ensuring a fair transition towards climate neutrality will undergo a stress test in 2026 to 
ensure it remains relevant, proportionate and cost-efficient. 

4.1.3.3. Minimum income schemes as a last resort social safety net 
Minimum  income  benefits  are  an  important  component  of  income  support  schemes272. 
They are defined as non-contributory and means-tested monetary benefits of last resort that aim 
at bridging the gap to reach a certain overall level of income in households where other sources 
of income or benefits have been exhausted or are not adequate to ensure a dignified life. In line 
with the active inclusion approach273, income support for the working age population should be 
combined with efforts to support integration in the labour market of those who can work, and 
access to quality services. These elements are referred to respectively in section 3.3 and 4.2.3. 
During  the  consultations  on  the  Strategy  (see  more  information  in  Annex  1),  stakeholders 
consistently advocated for universal access to adequate minimum income and emphasised the 
need for adequate and accessible minimum income schemes (with calls for an EU directive). 

Improving  both  the  adequacy  and  coverage  of  minimum  income  benefits  has  strong 
poverty-reducing potential. Aligning minimum income levels with the poverty line could cut 
monetary poverty by around 3 percentage points, with greater effects in countries starting from 
low adequacy levels. Expanding coverage or take-up by 10 percentage points could bring an 
additional 1–1.5 percentage points reduction274. Full adequacy and coverage in the EU would 
have an estimated fiscal cost of around 0.95% of GDP275. 

In almost all Member States minimum income support is generally not sufficient to lift 
people out of poverty and has over the most recent years slightly eroded on average in the 
EU276. For a single adult household, the level of support is the most generous in the Netherlands, 
where  it  almost  reaches  the  at-risk-of-poverty  threshold  (of  60%  of  median  equivalised 
disposable household income) (smoothed over 3 years). It is around 50% of median income in 
Ireland, Belgium, Luxembourg and Denmark, and between 30% and 50% in most other EU 
countries. Support is the lowest in Italy, Hungary and Romania, where it is around or below 

272 Other components of income support schemes include child/family benefits (see section 4.1.1.1) and housing 
benefits (see section 4.2.2.8.2). 
273  European  Commission  Communication  COM/2008/0639 
Recommendation on active inclusion of people excluded from the labour market 
274 On non take up, see for instance De Schutter, O., ’Non-take-up of Rights in the Context of Social Protection.‘, 
Report of the Special Rapporteur on Extreme Poverty and Human Rights, United Nations General Assembly, 19 
April 2022. 
275 Commission Staff Working Document SWD/2022/313 final of 28 September 2022 accompanying the Proposal 
for a Council Recommendation on adequate minimum income ensuring active inclusion. 
276 “For a single-person household, it slightly declined from 58% of the poverty threshold in 2018 and 2022 to 
56% in 2023” (European Commission:  Directorate-General for Employment, Social Affairs and Inclusion, The 
2025 minimum income report). 

  of  3  October  2008  on  a  Commission 

101 

 
 
 
 
10% of median income. As for the situation of a household composed of two adults and two 
children, in most Member States the adequacy of support is similar to or higher than for a single 
adult  household,  mainly  due  to  a  more  prominent  role  of  family  benefits.  Still,  the  level  of 
support for this type of household is sufficient to lift them out of poverty only in Lithuania. 
Furthermore, a quarter of Member States do not have a transparent methodology for setting the 
minimum income benefit level, or they link the benefit level to an index or another benefit, 
without  a  clear  methodology.  Similarly,  in  some  Member  States,  there  is  no  update  of  the 
benefit levels, either through indexation or other means277. In those Member States, which have 
recently introduced clear methodologies or indexation, adequacy has progressed. This  is  for 
instance the case of Latvia, Lithuania, Greece, Italy and Spain. 

Minimum income does not reach all individuals who need it. Eligibility rules, household 
means-testing  and  age  restrictions  often  exclude  young  adults,  migrants,  people  in  informal 
work or those in  non-standard living  arrangements.  Some groups face systematic exclusion, 
despite being among those most at risk of poverty. In 2024, the benefit recipient rate reached 
was around 83% of persons aged 18-64 that are both at-risk-of-poverty and living in (quasi-) 
jobless households on average at EU-27 level. 

Removing barriers is key to tackle non-take up of both cash and in-kind benefits and to 
close the socioeconomic participation gap that persons experiencing poverty suffer when it 
comes to access to services. Families and individuals living at poverty or social exclusion often 
face multiple, overlapping barriers to accessing services and benefits, including affordability 
issues,  lack  of  accessible  information,  including  due  to  language  barriers,  complex 
administrative  procedures,  and  digital  exclusion.  These  challenges  are  compounded  by 
geographical disparities, stigma, and mistrust of institutions. Together, these obstacles prevent 
many  families  from  receiving  the  support  they  are  entitled  to,  underscoring  the  need  for 
simplified, inclusive, and proactive service delivery systems that reach those most in need and 
the  evolving  needs  of  families.  When  it  comes  to  minimum  income,  the  available  national 
evidence278 suggests that the level of non-take-up ranges from 20% in Czechia, 30% in Austria 
and 33% in France, 37% in the Netherlands and 38.5% in Greece to 44% in Spain and between 
37% and 51% in Belgium. Other available estimates point to an even higher level of non- take-
up. 

•  EU instruments in place 

The Council Recommendation on adequate minimum income ensuring active inclusion279 
(2023) calls on Member States to guarantee adequate and accessible minimum income schemes 

277  European  Commission:  Directorate-General  for  Employment,  Social  Affairs  and  Inclusion,  ’The  2025 
minimum income report – An overview of the implementation of the 2023 Council recommendation on adequate 
minimum  income  ensuring  active  inclusion  across  EU  Member  States’,  Joint  report  prepared  by  the  Social 
Protection Committee and the European Commission, Directorate-General for Employment,  Social Affairs and 
Inclusion. Part 1, Horizontal analysis, European Commission, 2025, https://data.europa.eu/doi/10.2767/6797386 

278 Idem. 
279OJ C, C/2023/41, 3.2.2023, p. 1, ELI: EUR-Lex - 32023H0203(01) - EN - EUR-Lex. 

102 

 
 
 
 
that ensure a dignified life at all stages of life and promote active participation in society and 
the labour market. The Recommendation builds on the three-pillar approach of active inclusion 
—  adequate  income  support,  inclusive  labour  markets,  and  access  to  enabling  and  essential 
services  —  to  create  comprehensive  support  pathways.  The  2025  Minimum  Income  Report 
gives a first overview of the implementation of the Recommendation in the Member States280. 

Spotlight on Luxembourg 

Since January 2025, every household receiving the minimum income benefit (REVIS) also 
automatically receives the cost-of-living benefit and the energy allowance, which are also 
administered by the National Solidarity Fund. This automatic granting of these two benefits 
should  strengthen  take-up  and  improve  the  adequacy  of  the  support  provided  through 
minimum income, considered as a package including financial and in-kind benefits. Different 
publicly  financed  services  are  made  available  for  all  households  receiving  cost-of-living 
benefits, including access to a free second-hand computer or access to connectivity vouchers 
for fixed internet subscriptions. 

•  Next steps 

The European Commission and the Social Protection Committee will continue their joint efforts 
to monitor the implementation of the Council Recommendation on adequate minimum income 
ensuring active inclusion. The next joint report on the implementation of the Recommendation 
is foreseen for 2028, with a report to the Council scheduled for 2030.  

The European Commission has commissioned a study on the non-take-up of certain  in-cash 
social benefits that should be made available in 2026. In 2027, the Commission will publish a 
compendium of best practices to help address non-take-up. 

4.1.3.4. Taxation  

Tax progressivity is a key feature of most tax systems in the EU and a cornerstone of fair 
taxation. Based on the principle of vertical equity, it ensures that those with a greater ability to 
pay,  typically  measured  by  income,  contribute  a  proportionally  larger  share  of  their 
resources281.  By  redistributing  resources  from  higher-  to  lower-income  groups,  progressive 
taxation supports the broader policy objective of reducing inequality and preventing poverty. 

280  European  Commission:  Directorate-General  for  Employment,  Social  Affairs  and  Inclusion,  ’The  2025 
minimum income report – An overview of the implementation of the 2023 Council recommendation on adequate 
minimum  income  ensuring  active  inclusion  across  EU  Member  States‘,  Joint  report  prepared  by  the  Social 
Protection Committee and the European Commission, Directorate-General for Employment,  Social Affairs and 
Inclusion. Part 1, Horizontal analysis, European Commission, 2025, https://data.europa.eu/doi/10.2767/6797386. 
281 European Commission: Directorate-General for Taxation and Customs Union, ’Annual report on taxation 2025 
–  Review  of  taxation  policies  in  the  EU  Member  States‘,  Publications  Office  of  the  European  Union,  2025, 
https://data.europa.eu/doi/10.2778/6367826. 

103 

 
 
 
 
 
 
According  to  a  recent  Eurobarometer  survey,  71%  of  EU  citizens  believe  people  in  their 
countries pay taxes in proportion to their income and wealth, at least to some extent282.  

Progressivity can be achieved through various tax instruments, but in practice it is mainly 
implemented through progressive personal income taxation. Progressive personal income 
taxes  make  post-tax  income  distribution  fairer,  thus  reducing  the  risk  of  monetary  poverty, 
reducing  income  inequality  and  enhancing  the  redistributive  capacity  of  national  tax/benefit 
systems. At the same time, taxation alone can only contribute partially to reducing monetary 
poverty.  In  most  EU  Member  States,  social  benefits  and  transfers  complement  progressive 
taxation, forming an integrated framework that mitigates income inequality and supports low-
income households. The structure of taxation and public spending strongly influences the extent 
to  which  the  tax/benefit  system  can  address  poverty.  In  general,  income  inequalities,  as 
measured  by  the  S80/S20  ratio,  have  improved  in  the  EU  in  the  last  decade,  after  a  sharp 
worsening in 2015-2016, while the overall inequality reducing the effect of taxes and social 
transfers  (excl.  pensions)  has  remained  broadly  stable  since  2006283.  However,  there  is 
significant heterogeneity across Member States with regards to how redistribution is achieved. 
Distributive impact assessments through EUROMOD provide evidence of how certain Member 
States reduce income inequality mostly via the benefit system, while for others the majority of 
the reducing income inequality effect is attributed to the tax system284. Further research building 
on evidence from EUROMOD285 suggests that the combination of low tax rates at low-income 
brackets and tax allowances significantly limits the impoverishment effects of direct taxes.  

Indirect taxes by their nature are not tailored to the taxpayer’s income level and therefore 
do not have as such  redistribution or progressivity objectives. While direct transfers have 
been  shown  to  be  more  effective,  policymakers  have  nonetheless  used  indirect  tax  design, 
especially VAT, to mitigate regressive effects by applying reduced rates or exemptions to goods 
and  services  that  represent  a  larger  share  of  consumption  for  lower-income  households 
(typically  food,  medicines  and  other  necessities),  and  by  exempting  health  and  education 
services.  The  use  of  reduced  rates  results  in  the  VAT  system  to  be  roughly  proportional  or 
slightly progressive in most OECD countries, although there are exceptions286.  

282  European  Commission:  Directorate-General  for  Taxation  and  Customs  Union  and  Directorate-General  for 
Communication, ’Citizens'  attitudes  towards  taxation  –  Eurobarometer  report‘,  European  Commission,  2025, 
https://data.europa.eu/doi/10.2778/6066713. 
283  European  Commission:  Directorate-General  for  Employment,  Social  Affairs  and  Inclusion, ’Economic 
inequalities  in  the  EU  –  Key  trends  and  policies‘,  Publications  Office  of  the  European  Union,  2024, 
https://data.europa.eu/doi/10.2767/296636 
284  European Commission: Directorate-General for Taxation and Customs Union, Annual report on taxation 2025 
–  Review  of  taxation  policies  in  the  EU  Member  States,  Publications  Office  of  the  European  Union, 
2025, https://data.europa.eu/doi/10.2778/6367826 
285 De Poli, S., Gil-Bermejo Lazo, C., Leventi, C., Maier, S, Papini, A., Ricci, M., Serruys, H., Almeida, V., Christl, 
M.,  Cruces,  H.,  De Agostini,  P.,  Grünberger,  K.,  Hernández, A.,  Jędrych  Villa,  M.,  Manios,  K.,  Mazzon, A., 
Navarro Berdeal, S., Palma, B., Picos, F., Tumino, A., Vázquez Torres, E., ’EUROMOD  baseline report‘, JRC 
Working  Papers  on  Taxation and  Structural  Reforms  No  5/2023, European  Commission,  Seville,  Spain,  2023, 
JRC132899. 

286  Thomas, A. (2020), ’Reassessing the regressivity of the VAT’, OECD Taxation Working Papers, No. 49, 
OECD Publishing, Paris, https://doi.org/10.1787/b76ced82-en. 

104 

 
 
 
In contrast to lower income inequality, wealth inequality continues to rise across the EU. 
Between  1995  and  2023,  the  average  real  personal  wealth  of  the  bottom  50%  of  the  EU 
population increased by 76% (from EUR 4,662 to EUR 8,205), while that of the middle 40% 
grew by 98%, and that of the top 10% by 115% (from EUR 610,760 to EUR 1.313,134287). 
These figures underline how wealth accumulation has been far faster at the top, exacerbating 
social and intergenerational inequality288. These imbalances could be addressed for instance by 
combining  growth-enhancing  measures  and  effective  taxation  of  wealth  with  redistributive 
policies. 

Policymakers have a variety of tools at their disposal to strengthen the capacity of low- 
and  middle-wealth  households  to  save  and  accumulate  assets.  These  include  matched 
savings  schemes,  start-up  capital  endowments  for  young  adults,  and  financial  literacy 
programmes that support responsible investment and wealth-building. Wealth disparities also 
mirror  wider  structural  inequalities.  Across  the  OECD,  for  example,  single  women  hold  on 
average EUR 37,000 less wealth than single men, while in several EU Member States upward 
social and economic mobility is limited, particularly for certain demographics. This may reflect 
both direct barriers—such as limited access to credit and entrepreneurship opportunities—and 
indirect socio-economic disadvantages linked to labour market segmentation, lower earnings, 
or even discrimination289. 

In this context, the debate on fair and effective taxation of wealth has gained renewed 
attention. Although net wealth taxes have been abolished in most Member States, a number of 
Member States apply inheritance and gift taxes. Currently levied in 17 Member States, some 
assume  that  gift  and  inheritance  taxes  could  reduce  wealth  concentration  and  support 
redistribution  when  well  designed,  however  their  effectiveness  is  somewhat  disputed  in  the 
empirical literature The European Commission is committed to fair and effective taxation for 
all,  acknowledging  the  commitments  of  the  G20  Leaders  in  their  Declaration  of  November 
2024.290 Ensuring this requires effective exchange of information on beneficial owners and on 
real estate, as a prerequisite for any effective action at global level. 

At the same time, tax avoidance and evasion undermine the fairness and effectiveness of 
tax systems. These practices are more prevalent among individuals and corporations at the top 
of the income and wealth distribution, who have greater capacity to exploit legal loopholes and 
shift profits across borders. Such behaviour erodes public revenues, limits governments’ ability 
to finance social investment, and reduces the redistributive impact of taxation. Ensuring that 
everyone pays their fair share is therefore critical for maintaining public trust in fiscal systems 

Papers 

on  Well-being 

287 World Inequality Lab database: Home - WID - World Inequality Database. 
288 Balestra, C., J. Caisl  and L. Hermida (2025), ’Mapping trends and gaps in household wealth across OECD 
countries’,  OECD 
Publishing, 
and 
Paris, https://doi.org/10.1787/4bb6ec53-en. 
289 Balestra, C., J. Caisl and L. Hermida (2025), ’Mapping trends and gaps in household wealth across OECD 
countries’,  OECD 
Publishing, 
and 
Paris, https://doi.org/10.1787/4bb6ec53-en. 
290 G20 Rio de Janeiro Leaders’ Declaration, 2024, https://www.consilium.europa.eu/media/l11hh2mb/g20-rio-de-
janeiro-leaders-declaration-final.pdf. 

Inequalities,  No. 

Inequalities,  No. 

on  Well-being 

37,  OECD 

37,  OECD 

Papers 

105 

 
 
 
and  achieving  the  EU’s  objectives  of  social  fairness,  poverty  reduction,  and  inclusive 
prosperity.  According  to  a  recent  Eurobarometer  survey,  over  half  of  EU  citizens  identify 
combating tax avoidance and evasion as a top priority action in taxation291. 

•  EU instruments in place 

Council Directive 2011/16/EU on administrative cooperation in the field of taxation292 sets 
common  rules  for  the  exchange  of  tax  information  and  cross-border  cooperation  among 
Member States. This framework helps authorities enforce tax rules and collect revenues more 
effectively. The first, second and fourth DAC directives alone are estimated to have generated 
EUR 5–10 billion in additional annual tax revenues293. 

Council  Directive  (EU)  2016/1164  on  anti-tax  avoidance294  further  reinforces  the  EU’s 
capacity to tackle tax abuse by obliging all Member States to implement minimum anti-abuse 
and anti-avoidance standards in their domestic tax laws. 

Directive (EU) 2021/2101 on public country-by-country reporting295 enhances corporate tax 
transparency  by  enabling  public  scrutiny  of  large  multinational  companies.  In  addition,  the 
Code of Conduct  Group works to  identify and address  harmful  tax practices within the EU, 
promoting  transparency  and  cooperation  among  Member  States  to  prevent  distortions  of 
competition. 

Focusing  on  the  effectiveness  of  tax  systems,  the  Commission  has  recently  launched  a 
comprehensive assessment of tax gaps in the EU and its 27 Member States, The Mind the Gap 
report 296. The report discusses tax gaps that emerge due to taxpayer non-compliance, such as 
tax evasion and avoidance, and policy choices, namely tax expenditures, such as tax reliefs or 
concessions. The  report  outlines  actionable  strategies  across  the  EU  and  pinpoints  country-
specific areas of strength and areas for improvement in the Member States.  

The VAT directive allows Member States flexibility in setting the level and coverage of 
reduced rates. While these measures can have a poverty-mitigating, “price-reducing” effect 
for key goods, they should not be compared with personal income taxation as a redistribution 
tool. In this context, ensuring a fair and balanced tax mix contributes to tackling poverty in an 
effective and sustainable way. 

291  European  Commission:  Directorate-General  for  Taxation  and  Customs  Union  and  Directorate-General  for 
Communication, ’Citizens'  attitudes  towards  taxation  –  Eurobarometer  report‘,  European  Commission, 
2025, https://data.europa.eu/doi/10.2778/6066713. 
292 OJ L, 2011/64, 11.3.2011, p. 1, ELI: http://data.europa.eu/eli/dir/2011/16/oj. 
293 European Commission: Directorate-General for Taxation and Customs Union, Annual report on taxation 2025 
–  Review  of  taxation  policies  in  the  EU  Member  States,  Publications  Office  of  the  European  Union, 
2025, https://data.europa.eu/doi/10.2778/6367826 
294 OJ L, 2016/193, 19.7.2016, p. 1, ELI: http://data.europa.eu/eli/dir/2016/1164/oj. 
295 OJ L, 2021/429, 1.12.2021, 1, ELI: http://data.europa.eu/eli/dir/2021/2101/oj. 
296 European Commission: Directorate-General for Taxation and Customs Union, Mind the gap – Challenges and 
opportunities for tax compliance and tax expenditures in the EU – Full report, Publications Office of the European 
Union, 2025, https://data.europa.eu/doi/10.2778/4778590 

106 

 
 
 
 
 
Spotlight on Italy  

The Italian tax administration has invested substantially in capacity building in terms of tax 
gap estimations for different tax types, producing annual estimates which indicate that this 
rate has been historically high. Italy has a very transparent approach in that they publish their 
tax gap estimations every year in a report which is also submitted to Parliament. At the same 
time,  prevention  and  enforcement  activities  are  positioned  at  the  highest  levels  of  the 
decision-making  hierarchy  and  are  used  to  identify  priorities  within  the  overall  tax 
compliance strategy. This is further evidenced by the measures put in place by the Italian 
authorities  to  fight  tax  evasion  in  recent  years,  also  as  part  of  its  National  Recovery  and 
Resilience Plan. 

•  Next steps 

The structure and relevance of potential reforms of national tax systems aimed at supporting 
fairness may vary across Member States, particularly due to the differences in the design of 
each national tax-benefit system. Nevertheless, the Commission aims to ensure adequate and 
continuous monitoring of the impact of national tax reforms on groups in vulnerable situations. 

The Commission has published a study on wealth taxation, including net wealth, capital and 
exit taxes297 which aims to provide a better understanding of these taxes, their interrelation 
and consequences.   

4.1.4. Combating poverty in old age 

Pension systems play a crucial role in determining the level and distribution of retirement 
income, as well as future pension adequacy.  Mechanisms such as minimum  pensions and 
old-age benefits, survivor’s pensions, splitting pension schemes and pension credits for care 
periods exist in all Member States and support the redistributive capacity of old-age pension 
systems. Overall, pension income is more equally distributed than earnings from work. In all 
EU countries, low earners receive relatively higher pension replacement rates than high earners, 
and the impact of short careers on pensions is less than proportional. However, this is not always 
enough to prevent poverty in old age.  

Career interruptions are not equally protected by pension systems. In most Member States, 
childcare  breaks  are  well  covered,  while  periods  of  unemployment  lead  to  slightly  larger 
pension losses. Pension credits for disability periods vary considerably between countries. Most 
Member  States  provide  some  compensation  for  informal  care  of  dependent  relatives,  and 
pensions after long care periods are generally only slightly lower than those from uninterrupted 
careers. 

297 Robaszewski, A., Hagemejer, J., Skowronek, A. et al., ’Wealth taxation, including net wealth, capital and exit 
2026, 
1,  Publications  Office 
taxes 
https://data.europa.eu/doi/10.2778/0817231. 

the  European  Union, 

report‘,  Volume 

final 

of 

: 

107 

 
 
 
 
 
Persistent inequalities challenge pension adequacy. Women make up most older people, and 
gender inequalities in pensions remain a major issue. Older women, especially single women, 
face a higher risk of poverty than men, while also facing more long-term care needs. The gender 
pension  gap  is  the  result  of  inequalities  built  up  over  working  life:  lower  pay,  shorter  and 
interrupted  careers  due  to  care  responsibilities,  and  more  part-time  work  among  women.  In 
addition, lower financial literacy among women can hinder retirement planning, highlighting 
the need for financial education and greater pension transparency. Housing costs have a strong 
impact on disposable household incomes, contributing to inequality between those older people 
who  are  homeowners,  in  particular  those  without  mortgage,  and  tenants.  Persons  with 
disabilities prior to retirement usually have lower pensions when they reach retirement age. 

Inequalities in life expectancy also pose challenges for pension systems. People with higher 
education tend to live longer and spend more years in retirement (and this gap by education 
level is especially pronounced among men). They also start work later and retire later. Similar 
inequalities can be observed in healthy life expectancy, which affects both the ability to extend 
working lives and the onset of long-term care needs and the related costs. These differences can 
widen inequalities in pension outcomes. As many countries raise the retirement age, pension 
reforms  must ensure fair retirement options for people with  different  career lengths and life 
expectancies. 

The  link  between  earnings  inequality  and  pension  inequality  depends  largely  on  how 
progressive a pension system is. Across the EU, pension systems offset about one quarter of 
lifetime earnings inequality. Progressivity is influenced by flat-rate and means-tested benefits, 
pension ceilings, and reduced entitlements for high earners. 

Pension  adequacy  is  also  a  concern  for  self-employed  and  various  categories  of  non-
standard workers, including platform workers. Pensions for the self-employed are projected 
to  be  around  one-third  lower  than  those  of  comparable  full-time  employees,  due  to  lower 
contributions,  reduced  contribution  bases,  and  simplified  tax  or  pension  regimes.  In  some 
countries, workers in non-standard jobs struggle to build pension rights because of minimum 
earnings  thresholds  or  limited  entitlement  options.  The  recent  trend  towards  permanently 
enhancing pension adequacy mechanisms and the redistributive function of statutory pension 
schemes  include  improvements  to  pension  indexation,  higher  minimum  pensions  and  better 
protection for groups in vulnerable situations, including non-standard workers and in case of 
career  interruptions.  Enhancing  financial  literacy  and  pension/longevity  awareness  is  also 
gaining in importance to prevent poverty risks in old age, especially for women. Mobile workers 
may  struggle  to  keep  track  of  their  pension  rights  earned  in  different  Member  States  and 
schemes, which can hinder career and retirement planning and pension adequacy, necessitating 
the provision cross-border pension tracking services. 

108 

 
 
 
 
Spotlight on German basic pension 

The  Basic  Pension  Act  (Grundrentengesetz)  of  2021  gives  recognition  to  long-term 
mandatory contribution payments to the statutory pension insurance from those on below-
average incomes.  The basic pension supplement is  granted to  individuals with  at  least  33 
years of qualifying pension-relevant periods and if the average income during working life 
is below a given threshold (income test). An allowance was also introduced for people with 
a high number of credited periods and receiving basic income support in old age. To relieve 
low-income earners from the burden of social security contributions, the income threshold 
was also raised and the reduced contributions do not lead to lower entitlements. 

Pension indexation is an essential tool for preventing the erosion of retirees’ incomes over 
time. However, in most countries, long-term indexation does not fully keep pace with wage 
growth. While linking pensions to wages is generally more advantageous than linking them to 
prices, this trend has reversed during the recent period of high inflation, when price indexation 
offered better protection. The frequency of indexation adjustments is also crucial to maintaining 
pension adequacy during periods of rapidly rising prices. 

•  EU instruments in place 

The Pension Adequacy Report298 (2024) assesses pension adequacy and related challenges 
across the EU, including old-age poverty, income replacement, gender inequalities, and links 
with  long-term  care.  It  contributes  to  the  European  Semester  and  complements  the  Ageing 
Report to ensure a coordinated analysis of adequacy and fiscal sustainability. Endorsed by the 
EPSCO Council in June 2024, the report led to the creation of a new SPC Working Group on 
Adequate Social Protection in 2025, tasked with delivering by 2027 an integrated analysis of 
pensions and long-term care, providing a comprehensive overview of living standards in old 
age. 

The  Savings  and  Investments  Union  Strategy299  (2025)  promotes  supplementary  pension 
savings and improved pension transparency to enhance retirement income. It includes financial 
literacy initiatives to help citizens plan their working life and retirement, and a Commission 
Recommendation  on  pension  tracking  systems,  pension  dashboards,  and  auto-enrolment  to 
address the information asymmetry and coverage gaps that disproportionately affect younger 
generations,  people  in  non-standard  employment  as  well  as  other  groups  in  vulnerable 
situations.  Furthermore,  the  proposed  legislative  amendments  on  supplementary  pensions300 

298 European Commission, The 2024 Pension Adequacy Report: Current and Future Income Adequacy in Old Age 
in the EU, Volume I, Publications Office of the European Union, Luxembourg, 2024, The 2024 pension adequacy 
report - Publications Office of the EU. 
299 European Commission Communication COM/2025/124 of 19 March 2025 on a Savings and Investments Union 
A Strategy to Foster Citizens’ Wealth and Economic Competitiveness in the EU. 
300  In  particular  as  regards  the  Pan  European  Personal  Pension  Product  and  the  Institution  for  Occupational 
Retirement Provision. 

109 

 
 
 
 
 
aim to ensure adequate retirement income by enabling pension funds to diversify broadly and 
to generate stable long-term returns for their members and beneficiaries which can reduce the 
pressure on public pension systems. 

The Demography Toolbox301 underlines that EU and national policies must enable people to 
live  and  work  with  dignity  throughout  their  lives.  Safeguarding  both  the  adequacy  and 
sustainability of old-age protection requires coordinated monitoring of ageing-related spending, 
pension adequacy, and long-term care needs to ensure balanced, future-proof reforms. 

The  Intergenerational  Fairness  Strategy302  promotes  solidarity  across  generations  by 
investing in human and social capital throughout the life cycle. 

•  Next steps 

The  upcoming  2027  Report  on  Adequate  Social  Protection  in  Old  Age  by  the  Social 
Protection Committee and the Commission will provide joint analysis of pension adequacy and 
care needs, offering evidence-based guidance for reform. The report will look in an integrated 
manner  at  how  EU  social  protection  systems  help  protect  living  standards  for  the  old-age 
population through pension, long-term care and other related policies. Moreover, in 2027, the 
Commission will publish an expert report reviewing the national mechanisms in place to 
protect older people from poverty, including pensions, and non-contributory social assistance 
schemes for pensioners or older people, and other support measures that help them access care 
services, housing, food, energy, or transport. The Commission will hold a High-level exchange 
on  integrated  policies  for  a  dignified  old  age  with  Member  States,  social  partners, 
stakeholders and experts. 

Following the 2024 Belgian Presidency call and Council Conclusions on pension adequacy, the 
Commission will integrate a gender pension gap analysis systematically into future pension 
and care reports, in cooperation with EIGE and the research community to improve monitoring 
and indicators. 

301 European Commission Communication COM/2023/577 of 11 October 2023 on Demographic change in Europe: 
a toolbox for action. 
302 European Commission Communication COM/2026/110 of 5 March 2026 on a Strategy on Intergenerational 
Fairness 

110 

 
 
 
 
 
4.2. Tackling horizontal challenges that exacerbate poverty 

With the view to further prevent and address poverty, it is essential to tackle some horizontal 
challenges, which might impact all generations at the same time. This includes discrimination 
and stigma, difficulties to afford food, a home and other basic goods, and the lack of access to 
quality services. 

4.2.1. Combating discrimination and stigma 

4.2.1.1. Anti-discrimination and equal opportunities 

Discrimination  is  structural  and  individuals  who  experience  discrimination  are  more 
likely to fall at the bottom of the income distribution and face concerns about long-term 
financial and housing stability; this can in turn deepen disadvantage by increasing exposure 
to  discrimination  based  on  socio-economic  status.  The  2023  Discrimination  in  the  EU 
Eurobarometer indicates that 13% of respondents who experienced discrimination in the past 
year stated that it was due to their socio-economic status. Discrimination in one area often has 
knock-on effects in others—for instance, unequal treatment in the labour market can lead to 
mental health challenges and economic insecurity, which may in turn restrict access to housing 
or childcare. 

The  issue  of  stigma  emerged  in  the  participatory  dialogue  held  by  All  Together  in  Dignity 
(ATD) Fourth World with the Commission (Brussels, 22 October 2025), with the meaningful 
participation  of  people  living  in  poverty  across  Europe.  The  participants  expressed  that 
individuals  experiencing  poverty  often  feel  neglected  by  the  very  services  meant  to  support 
them, and that the societal stigma, exacerbated by political rhetoric, fosters discrimination and 
unfair  treatment.  Participants  urged  for  EU-wide  legislation  criminalising  discrimination  on 
socio-economic grounds. Where those already struggling face additional challenges and stigma 
when seeking aid, the concept of 'double punishment' emerges. 

Discrimination  affects  overall  quality  of  life  and  contributes  to  poverty  and  social 
exclusion. Minorities and marginalised groups continue to face systemic barriers in education, 
access to justice, sexual and reproductive health rights, freedom from violence and abuse, and 
adequate living standards and social protection. Ensuring equal rights and opportunities across 
these domains can generate transformative social and economic benefits, enhancing inclusion, 
well-being, and competitiveness by fully utilising Europe’s diverse talents and skills. 

Discrimination  is  often  intersectional,  meaning  that  when  two  or  multiple  grounds  of 
discrimination, such as those based on gender, racial or ethnic origin, disability, age, sexual 
orientation, gender identity or expression and sex characteristics interact simultaneously and in 
an  inseparable  manner,  it  produces  distinct  and  specific  forms  of  discrimination303.  For 
example, a Roma woman with a disability may face multiple barriers in education, employment, 
and  healthcare  that  cannot  be  understood  by  looking  at  each  factor  separately.  Similarly, 

303 European Commission: Directorate-General for Justice and Consumers and European network of legal experts 
in  gender  equality  and  non-discrimination,  ’Intersectional  discrimination  in  EU  gender  equality  and  non-
discrimination law‘, Publications Office, 2016, https://data.europa.eu/doi/10.2838/241520. 

111 

 
 
 
LGBTIQ+ migrants can experience overlapping xenophobia and homophobia, leading to higher 
risks of exclusion and poverty. Further, socio-economic status is a key factor often intersecting 
with  other  grounds.  These  intersections  can  compound  disadvantage,  making  it  difficult  to 
disentangle  socio-economic  discrimination  from  other  forms  of  discrimination  in  practice. 
Recognising  intersectionality  is  essential  to  designing  effective  policies  that  address  the 
combined impact of multiple disadvantages rather than treating each ground of discrimination 
in isolation. 

Measuring  these  inequalities  can  be  challenging:  while  economic  indicators  may  show 
similar  outcomes  between  socio-demographic  groups,  they  often  mask  the  disproportionate 
effort  required  by  those  facing  discrimination  to  achieve  the  same  results.  The  cumulative 
effects of discrimination also extend over time and across generations, shaping disparities in 
health, education, housing, and income. 

Addressing  discrimination  is  therefore  fundamental  to  the  fight  against  poverty.  By 
limiting access to decent work, quality education, and essential services, discrimination directly 
constraints economic independence and upward social mobility, increasing the risk of poverty 
and  long-term  exclusion.  These  disadvantages  tend  to  compound  over  time,  weakening 
individuals’ ability to participate fully in society and the labour market. Conversely, reducing 
discrimination strengthens social cohesion, improves productivity, and ensures that no one is 
left behind in Europe’s transition toward sustainable and inclusive growth. 

•  EU instruments in place 

Council  Directive  2000/43/EC  implementing  the  principle  of  equal  treatment  between 
people irrespective of racial or ethnic origin304 aims to combat discrimination and promote 
equal opportunities. It prohibits both direct and indirect discrimination, as well as harassment 
and  victimisation,  on  grounds  of  racial  or  ethnic  origin  in  key  areas  such  as  employment, 
education, social protection, healthcare, and access to goods and services. The Directive lays 
down minimum requirements for implementing the principle of equal treatment within Member 
States  and  obliges  them  to  establish  effective  legal  remedies,  penalties,  and  independent 
equality bodies to support victims and promote equality. 

The Equality Framework Directive 2000/78/EC305 aims to combat discrimination on grounds 
of  disability,  sexual  orientation,  religion  or  belief  and  age  in  the  workplace,  establishing  a 
general framework for equal treatment in employment and occupations. 

The  Council  Directive  2004/113/EC  implementing  the  principle  of  equal  treatment 
between  men  and  women  in  the  access  to  and  supply  of  goods  and  services306  extends 
gender equality beyond the workplace, prohibiting both direct and indirect discrimination based 
on sex in areas such as housing, banking, insurance, education, healthcare, and leisure services. 

304 OJ L, 2000/180, 19.7.2000, pp. 22, ELI: http://data.europa.eu/eli/dir/2000/43/oj. 
305 OJ L, 2000/303, 2.12.2000, p. 16, ELI: http://data.europa.eu/eli/dir/2000/78/oj. 
306 OJ L, 2004/373, 21.12.2004, p. 37, ELI: http://data.europa.eu/eli/dir/2004/113/oj. 

112 

 
 
 
Directive 2006/54/EC on the implementation of the principle of equal opportunities and 
equal  treatment  of  men  and  women  in  matters  of  employment  and  occupation307 
consolidates previous legislation and further enhances gender equality across the EU. 

Directive on Violence against Women and Domestic Violence308 (EU) 2024/1385 aims to 
combat  violence  against  women  and  domestic  violence  through  a  comprehensive  legal 
framework.  It  includes  measures  to  prevent  violence,  protect  victims,  and  prosecute 
perpetrators, covering various forms of violence, including physical, psychological, economic, 
and sexual violence. Women and girls living in poverty, or at risk of poverty, face a heightened 
risk of gender-based violence, including sexual  violence, which in  turn  severely limits  their 
access to education and the labour market and undermines their economic self-sufficiency. The 
lack  of  affordable  housing  can  trap  women  in  abusive  situations,  force  them  to  live  in 
inadequate conditions, or increase their risk of homelessness. Gender-based violence not only 
violates women’s rights but also has significant economic consequences: survivors often face 
barriers to maintaining employment, experience loss of income, incur medical and legal costs, 
and  may  be  forced  to  leave  their  homes.  This  creates  a  vicious  cycle  in  which  economic 
dependence and exposure to gender-based violence reinforce each other. 

The  Strategy  for  the  Rights  of  Persons  with  Disabilities  2021–2030309,  updated  with  the 
Communication  on  ”Enhancing  the  strategy  for  the  rights  of  persons  with  disabilities  up  to 
2030”, provides the EU framework for coordinated action with Member States to ensure equal 
rights, access, and opportunities for persons with disabilities to enable them to participate fully 
in society and the economy. It promotes autonomy, freedom of movement, and independent 
living in line with the UN Convention on the Rights of Persons with Disabilities (UNCRPD). 
The Strategy and the enhanced Strategy outline flagship initiatives, Commission actions, and 
calls to Member States, promoting disability mainstreaming across EU legislation, policies and 
funding. Several of these initiatives are particularly relevant for addressing poverty and social 
exclusion. 

The  Disability  Employment  Package310  (2022),  reinforced  under  the  enhanced  strategy, 
provides guidance for employers, social partners, employment services, public authorities and 
civil society to improve labour outcomes of persons with disabilities. 

The guidelines on access to healthcare for persons with disabilities311 developed under the 
EU4Health  action  propose  in  total  17  actions  across  10  essential  areas:  governance,  data, 

307 OJ L, 2006/204, 26.7.2006, p. 23, ELI: http://data.europa.eu/eli/dir/2006/54/oj. 
308 OJ L, 2024/1385, 24.5.2024, ELI: http://data.europa.eu/eli/dir/2024/1385/oj. 
309 European Commission Communication COM/2021/101 of 3 March 2021 on a Union of Equality: Strategy for 
the Rights of Persons with Disabilities 2021-2030 
310  European  Commission,  Disability  Employment  Package:  Supporting  Member  States  in  Ensuring  Social 
through  Employment,  Brussels, 
Inclusion  and  Economic  Autonomy 
https://employment-social-affairs.ec.europa.eu/policies-and-activities/eu-employment-policies/disability-
employment-package_en  
311 European Commission, Guidelines on Access to Healthcare for People with Disabilities, Publications Office of 
the European Union, Luxembourg, 2025, https://op.europa.eu/en/publication-detail/-/publication/c2959f58-d63d-
11f0-8da2-01aa75ed71a1/language-en. 

for  Persons  with  Disabilities 

113 

 
 
 
integration  of 

inclusive financing and affordability, leadership, informed consent, accessibility, availability of 
services,  and 
services,  competences  of  healthcare  professionals, 
deinstitutionalisation. The implementation of the guidelines is in the remit of Member States 
and is not just a task for their health systems. Problems in access to healthcare for persons with 
disabilities touch upon more fundamental issues, including processes of disability assessment 
determining  eligibility  for  social  protection  and  support  at  individual  level,  legislation  and 
relevant measures protecting human rights, capacity-building for organisations of persons with 
disabilities, transport and territorial development policies, and cross-sectoral priority-setting at 
national  level.  The  EU  framework  on  the  implementation  of  the  UNCRPD  is  therefore  an 
opportunity to further discuss and reap the cross-sector potential of these guidelines. 

The Commission Notice - Guidance on independent living312 and inclusion in the community 
of  persons  with  disabilities  in  the  context  of  EU funding  (2024)  supports Member  States  in 
using EU funds for reforms and investments promoting deinstitutionalisation transitions and 
describes the key principles to give effect to the right of independent living and inclusion in the 
community, in line with Article 19 of UNCRPD. Further dissemination and implementation of 
the Guidance will be promoted under the enhanced strategy through a dedicated flagship. 

Directives  (EU)  2024/1499313  and  (EU)  2024/1500314  established  binding  standards  for 
equality  bodies  and  extended  their  mandates.  These  directives  extend  the  mandate  of 
equality bodies to cover discrimination-based grounds of disability, sexual orientation, religion 
or belief and age in employment and occupation. The Commission also advances workplace 
diversity through initiatives like the EU Platform of Diversity Charter315. 

The  EU  Roma  Strategic  Framework  for  Equality,  Inclusion  and  Participation  2020-
2030316  aims  to  reduce  poverty  and  social  exclusion  among  Roma  by  promoting  equality, 
inclusion, and participation,  with  a focus on education, employment, health, and housing. It 
seeks  to  halve  the  poverty  gap  between  Roma  and  non-Roma  by  2030  and  to  address 
discrimination, antigypsyism, and digital exclusion through improved access to public services 
and equal opportunities.  

The Council Recommendation on Roma Equality, Inclusion and Participation317 (2021) 
reinforced  Member  States’  commitment  to  addressing  long-standing  challenges  through 
effective  and  inclusive  policies.  In  line  with  this  Recommendation,  Member  States  have 

312 OJ C, C/2024/7188, 29.11.2024, ELI: http://data.europa.eu/eli/C/2024/7188/oj. 
313 OJ L, 2024/1499, 29.5.2024, ELI: http://data.europa.eu/eli/dir/2024/1499/oj. 
314 OJ L, 2024/1500, 29.5.2024, ELI: http://data.europa.eu/eli/dir/2024/1500/oj. 
315  See  EU  Platform  of  Diversity  Charters  -  Promoting  Diversity  Across  Europe:  https://eu-diversity-
inclusion.campaign.europa.eu/eu-platform-diversity-charters_en  
316 European Commission,  The New EU Roma Strategic Framework for Equality, Inclusion and Participation, 
Directorate-General 
2020, 
https://ec.europa.eu/info/publications/eu-roma-strategic-framework-equality-inclusion-and-
participation_en.https://commission.europa.eu/publications/new-eu-roma-strategic-framework-equality-
inclusion-and-participation-full-package_en. 
317 OJ C, C/2021/93, 19.3.2021, p. 1, ELI: EUR-Lex - 32021H0319(01) - EN - EUR-Lex. 

Consumers, 

Brussels, 

October 

Justice 

and 

for 

7 

114 

 
 
 
committed  to  developing  National  Roma  Strategic  Frameworks  that  translate  the  EU-level 
objectives into concrete national measures tailored to their specific contexts. 

Spotlight  on  Roma  –  Spain:  National  Strategy  for  the  Prevention  and  Combat  of 
Poverty and Social Exclusion (2024–2030) 

Spain’s National Strategy for the Prevention and Combat of Poverty and Social Exclusion 
(2024–2030) explicitly identifies Roma as a vulnerable group at higher risk of poverty and 
social  exclusion.  The  strategy  aims  to  strengthen  access  to  social  protection  schemes, 
including the Minimum Vital Income, ensuring that Roma families have access to essential 
financial support. It also prioritises improving coordination with municipal social services to 
enhance  outreach,  identify  specific  needs,  and  provide  tailored  assistance  to  Roma 
households experiencing poverty. By integrating national-level  social protection measures 
with local-level support mechanisms, the strategy addresses both economic vulnerability and 
practical barriers to accessing services. This approach promotes greater inclusion of Roma 
communities in social welfare systems and serves as a model for combining targeted support 
with institutional coordination to reduce poverty and social exclusion. 

The  EU  Anti-Racism  Action  Plan  2020–2025318  provides  a  comprehensive  framework  to 
combat racial discrimination and promote equality across the EU. It supports better access to 
healthcare, housing, welfare, education, and employment for racial and ethnic minorities. The 
plan  also  promotes  evidence-based  policymaking  and  targeted  measures  addressing 
intersectional disadvantages to reduce poverty and foster inclusion. 

The  EU  Anti-Racism  Strategy  2026-2030319  is  a  comprehensive  framework  aimed  at 
combating racism and racial discrimination across the European Union. It addresses racism in 
all its forms, including anti-black racism, antigypsyism, antisemitism, anti-Asian racism, and 
anti-Muslim hatred. The strategy places particular emphasis on tackling structural racism and 
adopts  an  intersectional  approach  to  policymaking,  to  address  overlapping  forms  of 
discrimination.  In  addition,  it  addresses  social  equality  by  addressing  barriers  in  education, 
employment, housing, healthcare, and social protection, including issues such as discrimination 
in the labour and housing markets. The strategy further emphasises partnerships with Member 
States, civil society organisations, and international actors to mainstream anti-racism across EU 
policies and contribute to building a true Union of Equality within the EU. 

The LGBTIQ+ Equality Strategy 2026-2030320 recognises that discrimination and a lack of 
social acceptance contribute significantly to higher risks of poverty and homelessness among 
LGBTIQ+ people. To address this, the Strategy announces a study on housing inequality and 

318 Commission Communication COM/2020/565 final of 18 September 2020 on A Union of Equality: EU Anti-
Racism Action Plan 2020–2025. 
319 European Commission, Anti-Racism Strategy 2026, Publications Office of the European Union, Brussels, 20 
January 2026.https://commission.europa.eu/document/f4acc4d4-689e-4db8-8c89-c7243b76ab88_en. 
320  European  Commission,  LGBTIQ+  Equality  Strategy  2026-2030,  Brussels,  5  March  2026, 
https://commission.europa.eu/publications/lgbtiq-equality-strategy-2026-2030-0_en  

115 

 
 
 
 
discrimination, using an intersectional approach. The findings of this study will inform future 
Commission action to promote safe, accessible and non-discriminatory housing for all. 

The Gender Equality Strategy 2026–2030321 continues to promote gender mainstreaming, to 
ensure  the  full  and  effective  empowerment  of  women  and  girls  in  all  their  diversity,  and  to 
reduce  women’s  poverty.  This  includes  addressing  the  gender  employment,  pay,  care,  and 
pension gaps, and integrating a gender perspective across all relevant EU processes, notably the 
European Semester, the implementation of the European Pillar of Social Rights and its Action 
Plan. 

•  Next steps 

The Commission will continue to implement the EU Roma Strategic Framework and monitor 
the implementation of the related Council Recommendation on Roma Equality, Inclusion and 
Participation as well as the Roma national strategies. In this context, the Commission will adopt 
a Report on the progress made in implementing the national Roma strategic frameworks 
in the second half of 2026. It will be based on the reports by Member States and civil society 
organisations and on the findings  of the EU Roma Survey 2024 by the Fundamental  Rights 
Agency, dedicated Implementation Dialogue and Call for evidence. 

The  Commission  will  continue  to  implement  the  Strategy  for  the  Rights  of  Persons  with 
Disabilities 2021–2030, building on progress made under its flagship initiatives.  

Through the Communication “Enhancing the strategy for the rights of persons with disabilities 
up to 2030”322, the Commission will reinforce action in the area of disability to guide the EU 
and its Member States in their joint engagement to further advance the EU’s leading role in 
promoting and enforcing disability rights. Continued implementation of the Strategy for the 
rights of persons with disabilities 2021-2030 and new actions and flagship initiatives under the 
Enhanced  strategy  will  aim  to  foster  autonomy, participation,  social inclusion  and  equal 
rights for persons with disabilities in the EU and beyond. The Strategy contributes to building 
a Union of equality and supports the implementation of the European Pillar of Social Rights 
as  well  as  of  the  United  Nations  Convention  on  the  Rights  of  Persons  with  Disabilities 
(UNCRPD). 

4.2.1.2. Access to justice 

Victims of crime are often among the most vulnerable members of society. Poverty and 
victimhood are closely interlinked: living  at risk of poverty or social exclusion can increase 
vulnerability to crime, while becoming a victim of crime can, in turn, deepen economic hardship 
and  social  exclusion.  Addressing  the  criminalisation  of  poverty  and  its  severe  impacts  on 
affected persons requires not  only  social and economic measures but  also strong procedural 

321  European  Commission,  Gender  Equality  Strategy  2026-2030,  Brussels,  8  October  2025, 
https://commission.europa.eu/strategy-and-policy/policies/justice-and-fundamental-rights/gender-
equality/gender-equality-strategy_en  
322 European Commission Communication on Enhancing the strategy for the rights of persons with disabilities up 
to 2030, forthcoming (2026) 

116 

 
 
 
 
safeguards within the justice system  to  ensure fairness  and equality  before the law, as often 
socio-economic disadvantage leads to punitive rather than supportive responses (e.g. sanctions 
linked to homelessness, begging or inability to afford transport). 

People  living  at  risk  of  poverty  or  social  exclusion,  children  from  disadvantaged 
backgrounds,  and  other  vulnerable  individuals  are  often  overrepresented  in  criminal 
proceedings. They are disadvantaged in particular due to a lack of awareness of their rights, 
limited  access  to  legal  advice  or  the  inability  to  afford  legal  representation.  Strengthening 
procedural rights and guaranteeing access to free and effective legal aid are therefore essential 
to  prevent  poverty  from  translating  into  a  disproportionate  likelihood  of  being  deprived  of 
effective access to justice and a fair trial. This is also true with regards to children, whose socio-
economic  situation  is  primarily  determined  by  that  of  their  parents,  and  for  whom  EU  law 
provides  specific  safeguards,  including  access  to  legal  assistance.  Evidence323  shows  that 
children, in particular those in vulnerable situations, often lack awareness of their rights and of 
available  remedies,  face  difficulties  in  navigating  complex  procedures,  and  may  not  be 
effectively heard in proceedings affecting them. Where mandatory legal  aid is provided, the 
costs are usually born, in the first instance, by the State. Member States may, however, seek 
recovery of these costs subject to rigorous means testing; in practice, such recovery is often 
only waived for those living on or below the poverty line.324. 

Child-friendly  justice  systems  ensure  the  provision  of  accessible  and  age-appropriate 
information,  guaranteeing  the  right  of  the  child  to  be  heard  and  to  participate  effectively  in 
proceedings, ensuring the presence of trained professionals, and avoiding unnecessary delays 
and repeated questioning that may cause harm. 

•  EU instruments in place 

The Victims’ Rights Directive325 2012/29/EU is the main general EU instrument ensuring that 
all victims receive information, support, protection, and the ability to seek compensation from 
offenders.  It  also  mandates  that  measures  respond  to  individual  needs,  ensuring  sensitive 
treatment of vulnerable victims. The revised Victims’ Rights Directive on which the European 
Parliament and EU Council reached a provisional political agreement in December 2025 will 
strengthen each of victims’ rights, including victims’ right to information, support, protection, 
participation in criminal proceeding and access to compensation from the offender. The revised 
Directive pays particular attention to the most vulnerable victims, such as child victims and 
victims with disabilities. For child victims, the strengthened framework reinforces the need for 
child-friendly, accessible and rights-based procedures, ensuring that children are informed, 

323  European  Union Agency  for  Fundamental  Rights,  Child-friendly  justice.  Perspectives  and  experiences  of 
professionals  on  children’s  participation  in  civil  and  criminal  judicial  proceedings  in  10  EU  Member  States, 
Luxembourg: Publications Office of the European Union,  2015 https://fra.europa.eu/sites/default/files/fra-2015-
child-friendly-justice-professionals_en.pdf  
324 See also Commission Recommendation of 27 November 2013 on the right to legal aid for suspects or accused 
persons in criminal proceedings, point 6, OJ C, C/2013/378, of 24.12.2013, p. 11, according to which, when the 
legal aid is for a child, the child's own assets should be taken into account and not those of their parents or holder 
of parental responsibility. 
325 OJ L, 2012/315, 14.11.2012, p. 57, ELI: http://data.europa.eu/eli/dir/2012/29/oj. 

117 

 
 
 
heard and supported throughout the processWith regard to victims with disabilities, the new 
rules  will  introduce,  for  the  first  time  in  EU  legislation,  the  concept  of  procedural 
accommodation, which will facilitate effective and active participation in criminal proceedings 
for those victims. 

The Directive (EU) 2016/1919 on legal aid326 sets out the rules for guaranteeing that suspected 
or  accused  people  who  lack  sufficient  financial  resources  have  access  to  effective  legal 
representation. It sets common minimum standards for the granting of legal aid across Member 
States,  ensuring  that  people  are  not  denied  a  fair  trial  simply  because  they  cannot  afford  a 
lawyer. 

The first EU Strategy on Victims’ Rights 2020–2025327 aimed to ensure that all victims — 
especially  the  most  vulnerable  —  can  fully  exercise  their  rights  and  achieved  significant 
progress,  including  by  preparing  the  ground  to  the  revised  Victims  Rights  Directive, 
provisionally agreed by co-legislators in December 2025. 

Strengthening child-friendly justice is a key objective of the EU Strategy on the rights of the 
child. In its Conclusions on the EU Strategy on the rights of the child328 the Council notably 
calls on Member States to strengthen their justice systems, so that they are compliant with the 
rights  of  all  children,  in  particular  by:  providing  the  necessary  support  services  to  children 
during, and also after, the proceedings, for as long as the children need them; and promoting 
inter-disciplinary cooperation among different services to support the child in the best possible 
way before, during and after proceedings. 

Spotlight on the “Eyes Open” campaign 

The EU funded “Eyes Open” campaign aims to create an environment where victims of crime 
feel safe, understood and supported. Centred on the pledge “I will keep my eyes open,” it 
encourages  people  to  stay  alert  to  signs  of  victimisation,  respond  with  empathy,  and  help 
guide  victims  toward  support,  while  recognising  the  key  role  of  friends  and  family  in 
providing first-line support. 
To  deliver  this  message,  the  campaign  adopted  a  360°  approach,  combining  a  dedicated 
launch  event,  the  Eyes  Open  challenge,  with  paid  social  media,  media  partnerships  and 
outreach, outdoor advertising, influencer collaborations, and stakeholder engagement. 
This  integrated  strategy  reached  different  sectors  of  population  and  an  overall  22  million 
people across 10 EU countries. Campaign recall reached 50%, with the eye symbol as the 
most memorable element (82%). Awareness that victims are protected in the EU increased 
to 73% among those who recalled the campaign, while 62% said it encouraged them to be 
more aware of  crime and how they can support  victims—demonstrating strong impact  on 
both awareness and behaviour. 

326 OJ L, 2016/297, 4.11.2016, p. 1, ELI: http://data.europa.eu/eli/dir/2016/1919/oj. 
327  See  European  Commission,  Victims’  Rights  in  the  EU:  https://commission.europa.eu/strategy-and-
policy/policies/justice-and-fundamental-rights/criminal-justice/protecting-victims-rights/victims-rights-eu_en  
328 European Council Conclusions 10024/22 of 9 June 2022 on the EU Strategy on the rights of the child. 

118 

 
 
 
 
 
•  Next steps 

The next EU Strategy on Victims’ Rights to be adopted in 2026 will complement existing 
legislation  with  non-legislative  actions,  ensuring  stronger  implementation,  awareness,  and 
victim-centred justice. The next strategy will deal with all victims of all crimes, but will pay 
special  attention  to  most  vulnerable  victims,  including  child  victims  and  persons  with 
disabilities. 

The  Commission  will  continue  to  strengthen  child-friendly  justice,  including  through 
continued  cooperation  with  the  Council  of  Europe,  notably  via  the  joint  European  Union–
Council  of  Europe  project  on  child-friendly  justice.  This  initiative  aims  to  improve  the 
protection of children in contact with the law, whether as offenders, victims or witnesses, across 
non-judicial, judicial (including civil and criminal) and administrative proceedings at national 
and local level, and will be complemented by cooperation with Member States and relevant 
stakeholders to promote effective implementation in practice. 

4.2.2. Ensuring access to food, energy, transport and housing in a context of rising 
costs 

The cost-of-living is one of the main concerns of people in the EU, with 88% concerned by the 
daily cost of living for the future of their household329. This is particularly a concern for those 
experiencing  poverty  already,  but  it  also  puts  many  more  from  the  middle  class  at  risk  of 
experiencing poverty. 

4.2.2.1. Access to food 

Affording a proper meal is a concern for households at risk of poverty. In 2024, on average 
8%  of  the  EU  population  could  not  afford  a  meal  with  meat  chicken,  fish  or  a  vegetarian 
equivalent every second day330. Households at risk of poverty are more than twice as likely to 
be  unable  to  afford  a  proper  meal  compared  to  average-income  households331.  For  the 
population below 60% of median income, 19% could not afford such a meal. After years of 
decline,  these  shares  went  up  since  2021  due  to  the  succession  of  shocks  (ie.  the  COVID 
pandemic and the Russian´s aggression in Ukraine), resulting in higher food inflation rates.  

•  EU instruments in place 

One of the key factors influencing food prices and their affordability is food availability itself, 
an area in which the Common Agricultural Policy plays a fundamental role. The Treaty on 
the  Functioning  of  the  European  Union  provides,  under  the  objectives  of  the  CAP,  that 

329 See 2025 Eurobarometer “Investing in Fairness”. 
330  See  European  Commission,  Directorate-General  for  Agriculture  and  Rural  Development,  Food  Security: 
https://agridata.ec.europa.eu/extensions/FoodSecurity/FoodSecurity.html?page=Inability 
331  European  Commission,  2nd  report  on  the  State  of  Food  Security  in  the  EU  (Spring  2024):  Zooming  into: 
https://webgate.ec.europa.eu/circabc-
meal, 
proper 
inability 
ewpp/d/d/workspace/SpacesStore/2485b5b6-0626-49c7-86b4-72f171dee57c/download  

afford 

2024, 

to 

a 

119 

 
 
 
 
 
agricultural  markets  should  ensure  the  availability  of  supplies  and  that  those  supplies  reach 
consumers at reasonable prices (Article 39 TFEU). 

Regarding  food  affordability  and  pricing,  agricultural  markets  are  organised  under  the 
Common  Markets  Organisation  Regulation  (CMO)  to  ensure  a  well-functioning  food 
supply chain. Since 2019, the Unfair Trading Practice (UTP) Directive (2019/633) is banning 
unfair trading practices in the food sector. The CAP and these other instruments help prevent 
excessive corporate concentration in the agri-food sector, a trend that could otherwise reduce 
consumer choice, push prices upward, and place additional pressure on producers. 

Spotlight on surplus fool 

The recovery and redistribution of donated surplus food play a crucial role in preventing and 
reducing food waste. Under the amended Waste Framework Directive332, Member States are 
now obliged to reduce food waste by 10% at processing and manufacturing level, and by 30% 
(per capita) at retail and consumption level by 2030. To meet these targets, Member States 
are required to take measures to ensure that economic operators who have a significant role 
in preventing and generating food waste propose donation agreements with food banks and 
other  redistribution  organisations.  Accordingly,  these  organisations  remain  vital  in   
recovering surplus food that would otherwise go to waste and making it available to those in 
need. In 2024, European food banks redistributed approximately 834,000 tonnes of food to 
12,2 million people in need333. 

•  Next steps 

The  EU  Consumer  Agenda  2030  recognises  access  to  healthy  food  as  a  key  dimension  of 
consumer protection, with particular attention  given to vulnerable consumers. By promoting 
fair market conditions, transparency and informed food choices, it will contribute to improving 
access  to  healthy  diets  and  complements  social  and  agricultural  policies  addressing  food 
affordability. 

The Commission has commissioned a study on Food Affordability in the EU. This study will 
assess the current  situation, evaluate the contribution of the Common Agricultural  Policy to 
food  prices  and  affordability,  and  provide  an  overview  of  other  policies  affecting  food 
affordability across the food system. This study will be published in Q4 2026. 

To assess issues of food access beyond food affordability, the Commission will also launch in 
2026  a  Pilot  Project  on  Food  access  and  food  democracy.  It  aims  to  further  address 
knowledge  gaps  on  the  existing  barriers  to  access  to  healthy  and  nutritious  food,  including 
issues related to physical access and food environments. 

332 OJ L, 2025/1892, 26.9.2025, ELI: http://data.europa.eu/eli/dir/2025/1892/oj. 
333 See European Food Banks Federation – FEBA.  

120 

 
 
 
 
 
 
In 2024 the Commission also established the Agri Food Chain Observatory (AFCO), which 
monitors  the  functioning  of  the  chain,  including  aspects  related  to  the  availability  and 
affordability of food in the EU. Cost and margins indicators are being developed and will be 
published by the end of 2026. 

4.2.2.2. Access to energy 

Ensuring secure and affordable access to energy is essential for preventing poverty and 
protecting  vulnerable  households.  The  2022  energy  crisis  exposed  the  severity  of  energy 
inequality in Europe, as soaring and volatile energy prices forced many low-income families to 
spend  a  disproportionate  share  of  their  income  on  basic  energy  needs.  As  a  result,  energy 
poverty  surged.  The  crisis  also  demonstrated  that  well-designed  and  targeted  measures—
combining energy affordability support, protection for vulnerable consumers and investment in 
energy efficiency—are crucial not only to prevent hardship, but also to advance wider social, 
economic and climate objectives. 

Energy poverty refers to the situation in which people cannot afford the energy they need 
for basic daily life, such as heating, cooling, lighting or cooking. It occurs when energy bills 
take up too much of a household’s income or when homes are poorly insulated and inefficient, 
forcing  families  to  live  in  unhealthy  indoor  conditions.  Energy  poverty  has  many  causes, 
including low income, high energy prices, housing with low insulation energy efficiency and a 
lack of support for household energy efficiency improvements. 

Energy poverty remains a major concern in the EU, despite recent data showing some 
progress. The share of people unable to keep their home warm fell from 10.6% in 2023 to 9.2% 
in  2024,  mainly  due  to  lower  gas  and  electricity  prices  and  energy  efficiency  measures. 
However, this is still higher than before the energy crisis in 2021 (6.9%). At the same time, 
poor housing conditions are increasing: 15.5% of people in 2023 lived in homes with damp, 
leaks or rot, showing the need for better renovation and insulation efforts. Another indicator of 
energy  poverty—arrears  on  utility  bills—remained  high,  affecting  6.9%  of  EU  residents 
between  2022  and  2024.  Importantly,  renters  are  often  disproportionately  affected  and  face 
specific  barriers,  as  they  typically  cannot  undertake  energy  efficiency  improvements 
themselves and depend  on landlord decisions, while many support schemes primarily target 
homeowners. At the same time, Europe faces a growing summer energy poverty challenge as 
heatwaves intensify, and space cooling becomes increasingly essential for health and wellbeing. 
In 2023, harmonised EU-SILC survey data indicated that 26% of households were unable to 
keep  their  homes  at  a  comfortably  cool  temperature  for  a  period  during  the  previous  year’s 
summer, with the rate rising to nearly 35% among the lowest income group334. 

Energy  poverty  is  not  only  widespread  but  also  persistent.  According  to  a  recent  JRC 
study335, around 3% of people in the EU were unable to heat their homes for at least three out 

334 Koukoufikis, G., Roca Reina, J.C., Katoufa, N., Ozdemir, E., Volt, J. et al., Addressing Residential Cooling 
Demand and Summer Energy Poverty in the EU - Towards a Cooler Future, Publications Office of the European 
Union, Luxembourg, 2026, https://data.europa.eu/doi/10.2760/8743866, JRC143288. 
335  Ozdemir,  E.  and  Koukoufikis,  G., The  persistence  of  energy  poverty  in  the  EU,  Publications  Office  of  the 
European Union, Luxembourg, 2024, doi:10.2760/745025, JRC138409. 

121 

 
 
 
of four years between 2018 and 2021, and a similar share faced long-term unpaid energy bills. 
Long-term energy poverty is especially high in Southern and Central and Eastern Europe, where 
it  affects  over  10%  of  the  population  in  some  countries,  highlighting  deep  structural 
inequalities. Energy poverty does not affect all households in the same way. Detailed analysis 
shows significant differences across socio-economic and demographic groups, not only due to 
income levels  but  also  linked to  household  composition,  migration background and housing 
tenure. There are also strong disparities within countries, with higher rates of energy poverty in 
certain regions and rural areas. 

Addressing energy poverty requires targeted and structural measures that tackle its root 
causes. Actions such as energy efficiency improvements, building renovation, and access to 
renewable  energy—including  participation  in  energy  communities,  prosumer  schemes,  and 
energy  sharing  can  lower  energy  bills,  shield  households  from  price  volatility,  and  improve 
living  conditions  over  the  long  term.  Investments  in  building  renovation  is  among  the  most 
effective  ways  to  alleviate  energy  poverty.  If  one  quarter  of  the  Social  Climate  Fund  were 
allocated  to  such  medium-level  renovations,  such  as  window  replacements,  the  number  of 
energy-poor  households  among  AROP  households  could  decline  from  13.9  to  12.5  million, 
delivering a lasting and socially fair reduction in energy costs. 

Complementary  investment  in  clean  heating  technologies  could  further  enhance  the 
impact.  European  Commission  analysis336  shows  that,  under  the  right  conditions,  providing 
grants to around nine million energy-poor households that are also AROP to replace fossil-fuel 
heating systems with electric heat pumps could reduce average household energy expenditure 
by about 4% of income. At country level, average savings ranging from 1% to 10%, reflecting 
substantial  differences  in  national  contexts.  These  disparities  are  driven  by  variation  in  the 
relative  price  of  electricity  compared  with  fossil  fuels,  the  types  of  fuels  currently  used  for 
heating,  and  households’  baseline  energy  expenditure,  which  is  strongly  influenced  by  the 
renovation state of the building stock. In some countries, some households would even face 
higher energy expenditure after switching to a heat pump, due to unfavourable electricity-to-
fuel price ratios; these households were excluded from the analysis. 

EU instruments in place 

Since 2023, the EU has, for the first time, an EU-wide definition of energy poverty under Article 
2 of the revised  Energy Efficiency Directive337 (2023/1791/EU). Member  States must now 
define  energy  poverty  in  their  national  context,  using  indicators  that  reflect  their  specific 
situations, while staying consistent with the EU definition. They can draw on guidance from 
the Commission Recommendations on energy poverty (2020 and 2023) when developing their 
national approaches. The Directive also requires Member States to prioritise savings in energy 
efficiency for people in energy poverty. It further calls for the establishment of one-stop shops 

336  Estimates  are  developed  under  Green  EUROMOD  under  the  EMPL-JRC AMEDI  project  (Assessing  and 
monitoring employment and distributional impacts of the Green Deal). 
337 OJ L, 2023/231, 20.9.2023, ELI: http://data.europa.eu/eli/dir/2023/1791/oj. 

122 

 
 
 
or similar support services to provide technical, administrative and financial assistance, with a 
focus on low-income households and worst-performing buildings. 

The Energy Performance of Buildings Directive338 (EU/2024/1275) requires Member States 
to  develop  national  building  renovation  plans  to  reduce  energy  poverty,  including  specific 
measures to support affected households. It prioritises the renovation of the worst-performing 
buildings, which are often occupied by low-income and vulnerable households, and mandates 
targeted financial and technical support for those most at risk. 

The Renewable Energy Directive339 (2023/2413/EU) complements this by promoting access 
to renewable energy for low-income and vulnerable consumers, including through information 
measures and tailored assistance. 

The  Social  Climate  Fund  Regulation340  ((EU)  2023/955)  provides  financial  support  to 
Member  States  to  help  vulnerable  households,  micro-enterprises  and  transport  users  facing 
rising energy and mobility costs, particularly those affected by the new ETS2. Through Social 
Climate  Plans,  the  Fund  can  play  a  key  role  in  reducing  energy  poverty  for  vulnerable 
households and supporting a fair energy transition across the EU. 

In 2023, the European Commission  published the Recommendation on energy poverty341, 
providing  guidance  on  how  to  diagnose,  monitor  and  address  energy  poverty.  The 
Recommendation calls on Member States to prioritise structural measures that tackle the root 
causes  of  energy  poverty  and  to  provide  targeted  information  and  personalised  support  to 
affected households. 

The  Affordable  Energy  Action  Plan342  (2025)  sets  out  eight  concrete  measures  to  make 
electricity bills more affordable, reduce energy production and distribution costs and ensure a 
fair and competitive energy market across the EU. 

The Citizen Energy Package (2026) includes  the reduction of energy poverty as  one of its 
pillars. This package aims to empower citizens and communities to take an active role in the 
energy transition, while also ensuring that the most vulnerable ones are protected and supported. 
In this context, the Commission adopted a Recommendation on the protection of vulnerable 
households from energy disconnections and during gas phase-out. 

To support implementation, in 2020 the Commission launched the Energy Poverty Advisory 
Hub343  (EPAH).  EPAH  provides  expert  assistance,  data  tools  and  good  practices  to  help 
national,  regional  and  especially  local  authorities  design  and  implement  effective  energy 
poverty solutions. Local action is crucial, as municipalities are closest to the public and often 

338 OJ L, 2024/1275, 8.5.2024, ELI: http://data.europa.eu/eli/dir/2024/1275/oj. 
339 OJ L, 2023/2413, 31.10.2023, ELI: http://data.europa.eu/eli/dir/2023/2413/oj. 
340 OJ L, 2023/130, 16.5.2023, ELI: http://data.europa.eu/eli/reg/2023/955/oj. 
341 OJ L, 2023/2407, 23.10.2023, ELI: http://data.europa.eu/eli/reco/2023/2407/oj. 
342 European Commission Communication COM/2025/79 of 26 February 2025 on an Action Plan for Affordable 
Energy:  Unlocking  the  true  value  of  our  Energy  Union  to secure  affordable,  efficient  and  clean  energy for  all 
Europeans 
343 See European Commission, Energy Poverty Advisory Hub: https://energy-poverty.ec.europa.eu/. 

123 

 
 
 
work directly with social services to identify and support households at risk of energy poverty 
and social exclusion. 

Spotlight on Portugal  

In Portugal, 15.7% of people were unable to keep their homes warm. In response to this, the 
Portuguese government approved in 2024 the National Long-term Energy Poverty Mitigation 
Strategy 2023-2050.  This comprehensive strategy aims to eliminate energy poverty by 2050 
through  various  initiatives,  including  trough  i)  Fostering  the  energy  and  environmental 
sustainability  of  housing,  ii)  Ensuring  universal  access  to  essential  energy  services,  iii) 
Promoting  integrated  territorial  initiatives  and  iv)  Advancing  knowledge  and  informed 
engagement.  The  strategy  also  sets  guidelines  for  creating  a  National  Energy  Poverty 
Observatory and regular decadal action plans (2030, 2040, 2050). 

•  Next steps 

To  further  address  energy  poverty  and  ensure  a  comprehensive  approach  to  tackling  this 
complex issue, the focus is now on the effective implementation on the ground of the legal 
framework described above. In particular, the Commission will continue supporting Member 
States  to  implement  the  Energy  Efficiency  Directive,  Energy  Performance  of  Buildings 
Directive and Renewable Energy Directive.  

It will also work with Member States on reporting on the NECPs and the Social Climate Plans 
under the SCF, as well as other EU initiatives to deliver structural and sustainable solutions 
for people in energy poverty, vulnerable customers and vulnerable households. Moreover, 
the Commission will continue to work with Member States through the coordination group 
on  energy  poverty  and  to  support  local  action  in  this  field  through  the  Energy  Poverty 
Advisory Hub. 

The review of the Governance Regulation of the Energy Union and Climate Action (due 
in  2026)  will  aim  to  help  accelerate  a  just  transition  to  climate  neutrality  and  provide  a 
framework, increasing the EU´s ability to face any future crisis. It will aim to better address 
just transition and energy poverty concerns in the national planning of energy and climate 
policies. 

4.2.2.3. Access to transport  
Access  to  affordable  and  reliable  transport  allows  people  to  commute  to  work,  attend 
school, visit healthcare providers, and maintain social connections. Conversely, a lack of 
accessible, affordable, and available transport can trap individuals and communities in a cycle 
of poverty and exclusion. 

Transport poverty can be understood as the difficulty or inability to afford or access the 
transport  needed  to  reach  essential  services  like  work,  education,  and  healthcare.  It 
disproportionately affects low-income households, rural and remote populations, old persons 
and persons with disabilities and reduced mobility. At 12.5% of total expenditure, transport is 

124 

 
 
 
 
the  third  most  expensive  household  consumption  item  in  the  EU,  after  housing,  water, 
electricity, gas and other fuels (24%) and food and non-alcoholic beverages (13.6%).344 

Limited public transport make access to services and employment more difficult. Public 
transport offers individuals with no access to a private vehicle the freedom to satisfy their needs. 
Disproportionately, regular public transport users are women, younger or older people, have 
lower incomes, face mobility restrictions, and come from minority backgrounds. In rural and 
remote  regions,  car  ownership  is  often  the  main,  or  even  the  only,  means  to  reach  work, 
education and healthcare. This disproportionately affects lower-income groups, who are forced 
to  maintain  a  private  vehicle,  although  fuel  and  maintenance  costs  are  high  for  low-income 
households.  The  green  and  digital  transitions  risk  widening  inequalities  if  new  transport 
solutions—such as electric vehicles,  charging networks, on-demand transport or digital-only 
ticketing—remain unaffordable or inaccessible. 

Territorial gaps in access to and affordability of public transport remain. According to the 
eighth Cohesion Report (2021)345, access to public transport is much better in cities than in rural 
areas: in more than half of EU cities, over 95% of residents live within walking distance of a 
public transport stop, compared with far fewer in rural regions.  Often housing and transport 
costs are interconnected, meaning households with lower income move to suburban areas to 
reduce their housing costs, forcing them in many cases to spend more time and money to carry 
out activities or to become reliant on private transport. The ninth Cohesion Report (2023)346 
shows similar territorial gaps in access to healthcare: the average distance to a healthcare centre 
is 6.4 km in urban areas but 16.8 km in remote rural regions, where the population is also older 
and more reliant on healthcare. Overall, over 5% of EU citizens report “very difficult” access 
to  public  transport,  rising  to  more  than  10%  in  rural  areas.  Affordability  is  another  barrier, 
preventing around 7% of materially and socially deprived people from using public transport.347 

Tackling transport poverty requires focusing on the availability, accessibility and affordability 
dimensions of the problem. Policy measures related to prices, including social tariffs for various 
vulnerable groups, discounts, and reduced or free tickets and passes are important elements in 
the  toolkit  aimed  at  improving  affordability.  In  Romania,  for  example,  in  the  Cluj-Napoca 
municipality, retired people have free passes on the public transport network across the city and 
the system of discounts covers other categories of the population. Similarly, in Poland there is 
a  national  system  of  subsidised  public  transport  for  children  enrolled  in  public  and  private 
kindergartens or primary schools and students with disabilities to facilitate access to education. 
The municipality can either offer the transport services or reimburse the costs if the parents or 
caregivers are providing the transport. 

report  on  economic, 

344 Eurostat: https://doi.org/10.2908/NAMA_10_CO3_P3  
345  European  Commission,  Eighth 
https://ec.europa.eu/regional_policy/information-sources/8cohesion-report_en  
346  European  Commission,  Ninth 
https://ec.europa.eu/regional_policy/information-sources/cohesion-report_en  
347  European  Commission,  Transport  poverty:  definitions,  indicators,  determinants,  and  mitigation  strategies  - 
Final  Report,  2024,  https://employment-social-affairs.ec.europa.eu/transport-poverty-definitions-indicators-
determinants-and-mitigation-strategies-final-report_en  

territorial  cohesion,  2024, 

territorial  cohesion,  2021, 

report  on  economic, 

social  and 

social  and 

125 

 
 
 
•  EU instruments in place 

The  Commission  Recommendation  on  Transport  Poverty348  (2025)  calls  on  Member 
States—particularly  through  their  Social  Climate  Plans—to  identify  groups  in  vulnerable 
situations, monitor gaps in transport accessibility and develop integrated transport solutions that 
promote  social  inclusion.  The  Recommendation  urges  Member  States  to  adopt  a  strategic 
approach  to  preventing  and  reducing  transport  poverty  by  integrating  it  into  national  anti-
poverty strategies and aligning measures with the EU’s climate neutrality goals.  

To improve evidence and policy planning, the Commission also launched in 2025 a Transport 
Poverty Hub349, an online platform with high-resolution maps and indicators that identify areas 
with poor transport access across the EU. 

The Council Recommendation on ensuring a fair transition towards climate neutrality350 
(2022) emphasises the need for Member States to adopt measures that address the social and 
employment aspects of climate policies through supporting affected individuals, education and 
training measures, and fairness in tax-benefit and social protection systems.  

Complementing this, the revised TEN-T Regulation (EU) 2024/1679351 improves connectivity 
in  peripheral  and  outermost  regions,  ensuring  that  infrastructure  development  benefits 
structurally weaker territories and contributes to territorial cohesion. 

Spotlight on France  

In France, the Île -de-France Region has introduced a Bus Rapid Transit plan slated to run 
until 2030 that will complement the existing rail and network and the existing bus networks, 
thereby  connecting  isolated  territories.  Multimodal  exchange  hubs  will  connect  the  outer 
suburbs to the future Grand Paris Express region. In addition, on-demand transport (shuttle 
service that can be booked via an app) is offered to residents who live far from the transport 
network, to allow them to access a station, a bus line or important socio-economic facilities. 
This is complemented by carpooling between the outer suburban and rural areas and the city 
centre, facilitated by an app and an intermodal trip planner that integrates carpooling into the 
local public transport offer. 

The Sustainable and Smart Mobility Strategy352 (2020) already acknowledged the need to 
make mobility fairer, more inclusive, and more accessible, with a strong emphasis on reducing 

See 

European  Commission, 

EU  Urban  Mobility  Observatory: 

348 OJ L, 2025/1021, 26.5.2025, ELI: http://data.europa.eu/eli/reco/2025/1021/oj. 
349 
observatory.transport.ec.europa.eu/news-events/news/joint-research-centre-launches-transport-poverty-hub-
enhance-regional-connectivity-across-europe-2025-07-15_en  
350 OJ C, C/2022/243, 27.6.2022, p. 35, ELI: EUR-Lex - 32022H0627(04) - EN - EUR-Lex. 
351 OJ L, 2024/1679, 28.6.2024, ELI: http://data.europa.eu/eli/reg/2024/1679/oj. 
352  See  European  Commission,  Mobility  Strategy:  https://transport.ec.europa.eu/transport-themes/mobility-
strategy_en  

https://urban-mobility-

126 

 
 
 
 
 
inequality  for  those  with  low  disposable  income,  with  disabilities  or  reduced  mobility,  low 
digital literacy or living in disadvantaged areas. 

•  Next steps 

The Commission will continue supporting Member States through a further development of 
the  Transport  Poverty  Hub,  with  enhanced  spatial  indicators  and  modelling  tools.  In 
particular,  the  ‘affordability  dimension’  will  be  added  to  the  currently  existing  transport 
availability and accessibility dimensions. This is subject to national data being available.  

The Commission will foster accessibility across different transport modes for persons with 
disabilities,  who  are  generally  at  greater  risk  of  transport  poverty  than  those  without 
disabilities.  Please  see  the  flagship  initiative  on  better  access  to  transport  in  the  EU  as 
announced in the parallel Commission Communication “Enhancing the strategy for the rights 
of persons with disabilities up to 2030”. 

4.2.2.4. Addressing over indebtedness and promoting financial literacy 

A  lack  of  financial  literacy—understood  as  “financial  education,  such  as  basic  economics, 
statistics  and  numeracy  skills  combined  with  the  ability  to  employ  these  skills  in  making 
financial decisions”— can result in poor financial decisions, which can lead people to financial 
difficulties  (including  to  over-indebtedness)  over  their  lifetimes.  The  main  factors  driving 
over-indebtedness in the EU include rising debt costs, falling incomes, higher living expenses, 
and increased reliance on credit  353. Consumer loans and credit card debt are key sources of 
financial  distress,  while  low-income  households  are  particularly  vulnerable  to  arrears  on 
essential  expenses  such  as  utilities  and  rent.  These  risks  are  further  exacerbated  by  the 
availability of predatory and high-cost financial products – often characterised by opaque terms 
or excessive interest rates – as well as by structural shortcomings in credit markets, including 
inadequate responsible lending practices.  

According to an OECD survey354 (covering most but not all EU Member States), overall levels 
of  financial  literacy  remain  low  across  the  countries  surveyed,  with  significant  gaps  among 
women,  young  people,  and  disadvantaged  groups,  including  individuals  with  limited  digital 
skills.  Similar  results  were  confirmed  by  the  2023  Eurobarometer  survey355.  These  findings 
highlight  the  importance  of  targeted  financial  education  and  inclusion  initiatives  to  help 
vulnerable consumers manage everyday financial decisions, build resilience against shocks, and 
participate fully in economic life as a complement to strong consumer protection frameworks. 

353  European  Commission,  Study  on  European  consumers’  over-indebtedness  and  its  implications,  2023, 
https://commission.europa.eu/document/download/5002ff16-a502-4b98-91cd-
4536b5cd70ec_en?filename=Study%20of%20consumer%20over-indebtedness_Main%20report_9.18.pdf. 
354 ECD, OECD/INFE 2020 International Survey of Adult Financial Literacy, Paris, OECD, Paris, 2020. 
355 https://europa.eu/eurobarometer/surveys/detail/2953. 

127 

 
 
 
 
 
 
•  EU instruments in place 

The Consumer Credit Directive356 (EU) 2023/2225 aims at preventing over-indebtedness and 
promoting responsible lending and introduces stricter rules for creditworthiness. The Mortgage 
Credit Directive357 (2014/17/EU) promotes responsible mortgage lending, requiring creditors 
to  assess  consumers’  creditworthiness  before  providing  the  credit  and,  in  case  consumers 
encounter  financial  difficulties,  to  seek  early,  fair  solutions  before  initiating  foreclosure 
proceedings.  

The Financial Literacy Strategy358 (published in 2025) supports Member States’ efforts in 
improving financial literacy for EU citizens through several actions such as coordination and 
sharing  of  best  practices,  as  well  as  communication  and  an  EU-wide  campaign  to  raise 
awareness.  The  strategy  aims  to  help  citizens  make  sound  financial  decisions,  ultimately 
improving their wellbeing, financial security and independence.  

•  Next steps 

The  Commission  continues  to  implement  the  Financial  Literacy  Strategy,  providing  regular 
updates to the Government Expert Group on Retail Financial Services (GEGRFS) Sub-group 
on  Financial  Literacy.  Work  is  ongoing  to  finalise  key  deliverables  including:  an  EU-wide 
communication  campaign  for  diverse  and  vulnerable  groups,  facilitating  ‘best-practice’ 
exchanges for Member State experts, and a voluntary code of conduct for industry and other 
organisations  providing  financial  literacy.  Additionally,  the  established  network  of  national 
‘financial  literacy  ambassadors’  continues  to  expand,  while  forthcoming  Eurobarometer 
surveys will continue to monitor levels of financial literacy. 

4.2.2.5. Access to financial services  

Having  access  to  basic  banking  services,  such  as  a  bank  account  and  retail  payment 
services, is fundamental to full participation in modern society and the labour market. 
Such  access  enables  individuals  to  purchase  essential  and  discretionary  goods  and  services, 
both  in  person  and  online—a  practice  that  expanded  significantly  during  the  COVID-19 
pandemic as digital payments became the norm. At the same time, bank accounts and payment 
cards are increasingly essential for receiving income, whether through wages from employers 
or social benefits and transfers from public authorities. Without  this access, individuals face 
barriers to employment, financial management, and inclusion in the digital economy. Data from 
the latest World Bank’s Global Findex database illustrates that only six Member States have a 
level of banked population of less than 90%359. 

356 OJ L, 2008/133, 22.5.2008, p. 66, ELI: http://data.europa.eu/eli/dir/2008/48/oj. 
357 OJ L, 2014/60, 28.2.2014, p. 34, ELI: http://data.europa.eu/eli/dir/2014/17/oj. 
358  European  Commission:  Directorate-General  for  Financial  Stability,  Financial  Services  and  Capital  Markets 
Union,  EU  Strategy  to  Boost  Financial  Literacy  and  Investment  Opportunities  for  Citizens,  2025, 
https://finance.ec.europa.eu/publications/eu-boost-financial-literacy-and-investment-opportunities-citizens_en 
359 The Global Findex Database 2025. 

128 

 
 
 
High  fees,  limited  information,  and  legal  requirements  related  to  residency  or  identity 
documentation  continue  to  pose  barriers  to  accessing  payment  accounts  in  the  EU360. 
Although EU legislation guarantees that all consumers legally resident in the EU have the right 
to open a payment account with basic features, offered free of charge or for a reasonable fee, 
implementation  remains  uneven,  with  only  limited  number  of  Member  States  requiring  that 
payment  accounts  with  basic  features  to  be  offered  for  free  and  varying  fee  levels  across 
Member States. 

While  there  is  no  general  shortage  of  financial  products  or  intermediaries  in  the  EU, 
accessibility challenges persist. In recent years, digitalisation has increased access to financial 
services online, at the same time however, the number of bank branches and automated teller 
machines (ATMs) across Europe is declining, which can limit access, particularly in rural and 
remote  areas.  Physical  accessibility  barriers  continue  to  affect  persons  with  disabilities  and 
reduced mobility, including difficulties entering  bank branches or using inaccessible ATMs. 
Addressing these barriers is crucial to ensuring effective financial inclusion for all consumers. 
The increasing reliance on online and mobile banking, combined with the decline in physical 
bank branches, poses particular challenges for people with low digital skills or limited mobility 
and transport options. Older people are especially affected, as they may find it difficult to adapt 
to new technologies and have traditionally relied on in-person services and physical means of 
payment. The European Banking Authority (EBA) has raised concerns about the resulting risk 
of financial exclusion associated with the withdrawal of physical banking services.361 

•  EU instruments in place 

The Payment Account Directive (2014/92/EU) 362 guarantees that all consumers—including 
vulnerable individuals—have the right to open and use a payment account with basic features 
anywhere  in  the  EU.  The  Directive  requires  that  payment  accounts  with  basic  features  be 
offered either free of charge or for a reasonable fee. This provision helps ensure that even the 
most  disadvantaged  citizens  can  access  essential  financial  services  and  benefit  from  equal 
participation in the single market. 

To further increase  access  to  cash,  the Commission's  2023 proposal for a  third  Payment 
Services Directive and Payment Services Regulation would allow retailers, on a voluntary 
basis,  to  provide  cash  to  customers  even  without  a  purchase,  without  requiring  a  licence  or 
acting  as  a  payment  institution,  subject  to  conditions  such  as  a  €50  withdrawal  cap  and  fee 
transparency.  The  proposal  also  allows  certain  ATM  operators  that  do  not  service  payment 
accounts to  operate without  licensing, with transparency requirements  on fees, to  encourage 
wider availability of ATMs. 

The Commission’s 2023 proposal for a Regulation on the legal tender of euro banknotes 
and coins aims to ensure the widespread acceptance and easy access to cash across the euro 

360 OJ L, 2014/257, 28.8.2014, p. 214, ELI: http://data.europa.eu/eli/dir/2014/92/oj. 
361 European Banking Authority (EBA), Report on the use of digital platforms in the EU banking and payments 
sector, EBA/REP/2021/26, EBA, Paris. 
362 OJ L, 2014/257, 28.8.2014, p. 214, ELI: http://data.europa.eu/eli/dir/2014/92/oj. 

129 

 
 
 
area.  The  initiative  safeguards  the  right  to  choose  payment  methods,  promotes  financial 
inclusion, and prevents discrimination against groups that rely more heavily on cash. 

•  Next steps 

The Commission will continue to work with the European Parliament and the Council of the 
EU to finalise the legislative process for the adoption of the third Payment Services Directive 
and Payment Services Regulation in the first half of 2026. 

4.2.2.6. Protecting consumers 

Low-income households may face particular risks in the context of the high cost of living 
and  rising  difficulties  in  affording  basic  needs  such  as  food,  energy  and  housing.  See  more 
information in section 2.2.3. 

These  pressures  can  be  enhanced  by  unjustified  territorial  supply  constraints.  A 
Commission study estimates that removing such constraints could save consumers up to EUR 
14.1 billion per year on certain purchases. 

Consumer  organisations  play  a  key  role  in  supporting  consumers—especially  those  in 
vulnerable situations—by helping them understand and exercise their rights and by assisting 
them in obtaining redress when things go wrong. 

Spotlight on Germany 

Verbraucherzentrale  Bundesverband  (Federation  of  German  Consumer  Organisations),  in 
cooperation with the 16 consumer organisations of each German state, ran a project called 
“Strengthening consumers in the neighbourhood” from 2017 to 2024. The project targeted 
consumers in structurally weak urban neighbourhoods who are dependent on assistance in 
everyday  life.  The  project  specifically  approached  those  consumers  who  have  not  been 
reached by the consumer centres so far. Explicitly named are the elderly, particularly those 
who are threatened by old-age poverty, refugees and migrants who need support in general 
German consumer life (e.g., electricity bills, waste separation), young people who are often 
unaware of their consumer rights, social welfare recipients and low income or jobless single 
parents. Overarching themes were energy, sustainability and digital education with subtopics 
such  as  overpriced  phone  contracts,  cost  traps  on  the  Internet,  insecurity  about  insurance 
issues, contracts concluded at the front door or energy or credit card debts. Precise content is 
adapted to the needs of the respective target groups and identified by thorough exploration 
of the neighbourhood and in exchange with the consumers.   

•  EU instruments in place 

Protecting consumers in vulnerable situations is a cross-cutting priority throughout the 
European Consumer Agenda 2025–2030. 

Directive (EU) 2024/825 on empowering consumers for the green transition makes it easier 
for  consumers  to  determine  what  the  durability  of  a  product  they  are  planning  to  buy  is, 
130 

 
 
 
 
including through a new EU wide product label on durability that will become available for 
consumers  as  of  September  2026.  The  Directive  also  protects  consumers  against  premature 
failure of goods (early or planned obsolescence) that break down sooner than they should. 

Directive  (EU)  2024/1799  on  common  rules  promoting  the  repair  of  goods  (“Right  to 
Repair”) is designed to make repair the easy default option—both within and beyond the legal 
guarantee.  It  introduces  obligations  that  facilitate  repair,  including  requirements  for 
manufacturers to support repair services and access to relevant repair-related resources. The 
Commission  also  envisages  a European online Repair Platform,  intended to  help  consumers 
find  repairers  more  easily  and  increase  visibility  of  repair  offers;  it  is  expected  to  become 
operational by 1 January 2028 and Member States must apply the Directive from 31 July 2026. 

The  Commission  is  committed  to  supporting  a  strong  consumer  movement  at  EU  and 
national  level,  including  through  funding.  For  instance,  it  will  finance  a  follow-up  to  the 
Consumer PRO training programme to further equip consumer professionals to provide tailored 
advice to consumers. 

•  Next steps 

The European Commission will propose a Digital Fairness Act in Q4 of 2026. , that will  aim 
at updating the current EU rules to better protect the EU consumers in the online environment. 
The Digital Fairness Act will address the problems identified in the Fitness Check on digital 
fairness completed on 3 October 2024. These include dark patterns that can unfairly influence 
consumer  decisions,  spending-  and  attention-maximising  features,  problematic  commercial 
practices  of  social  media  influencers,  unfair  personalisation  practices,  contractual  problems, 
such as difficult cancellation of contracts concluded online or unwanted contract extensions and 
conversions of free trials into paid subscriptions, and unfair price marketing practices such as 
misleading drip pricing, dynamic pricing and price comparisons. The Digital Fairness Act will 
ensure  that  EU  consumers,  including  vulnerable  consumers  and  in  particular  minors,  are 
protected and increase their trust in the digital sphere. 

4.2.2.7. Circular economy 

Circular business models can provide access to products that people may not otherwise 
be able to afford. They focus on access to products and services rather than ownership (for 
example  through  Product-as-a-Service  and  sharing  models),  and  on  reuse,  repair  and 
refurbishment of products and the development of second-hand-markets. These models allow 
consumers  to  access  higher-quality,  energy-efficient  items  that  reduce  energy  costs,  a 
significant poverty factor. Sharing and collaborative practices lower costs and built community 
trust. Remanufacturing returns products to original or better performance, with a comparable 
warranty,  extending  lifespans  of  products.  For  lower-income  households,  a  more  circular 
economy  can  reduce  cost-of-living  pressures  by  extending  the  lifespan  and  repairability  of 
products and expanding access to affordable second-hand markets and repair services. Ensuring 
that these benefits reach those who need them most requires deliberate policy choices, including 
through  public  procurement,  targeted  incentives,  and  investments  in  local  circular 
infrastructure in disadvantaged areas. 

131 

 
 
•  Next steps 

The Circular Economy Act to be adopted by the Commission in 2026 will address bottlenecks 
that  inhibit  circular  transition  in  several  key  value  chains,  such  as  textiles,  construction  and 
plastics. It will create a circular single market in which jobs in circular value retention activities, 
such as repair, reuse and recycling can be developed. This will both generate proximity jobs in 
the EU, at  all skill levels, and increase the amount of cheaper second-hand, refurbished and 
shared products. 

4.2.2.8. Adequate and affordable housing 

Limited access to affordable, sustainable and quality housing undermines human dignity, 
social inclusion and health. In consequence, people struggle to access employment, education, 
healthcare services and social participation. Inadequate, overcrowded or unaffordable housing 
has  serious  consequences  for  physical  and  mental  well-being,  reinforcing  and  perpetuating 
vicious cycles of disadvantage. Housing and poverty are deeply interconnected. Poor housing 
conditions can cause or worsen poverty, and poverty makes it harder to access quality housing. 
It is a two-way relationship.  

Improving access to affordable housing was considered the most effective national-level policy 
in tackling poverty by the contributors to the open public consultation (see more information in 
Annex 1). During the discussion in the EPSCO Council (19 June 2025), housing affordability 
was also considered one of the main roots of poverty across Member States. Regarding EU-
level actions, contributors frequently emphasised the need for affordable social housing. During 
the dedicated hearing with social partners, employers stressed that finding affordable housing 
remained a significant struggle across several Member States, urging intervention at the EU 
level. 

Rising  housing  costs  increase  risks  of  homelessness,  and  inequality,  disproportionately 
affecting low-income households, people in vulnerable situations such as older people, single 
parents  and  families  with  children  at  risk  of  poverty,  LGBTIQ+  people,  persons  with 
disabilities, victims of gender-based violence, Roma and other ethnic minorities, migrants, and 
other  groups  at  risk  of  exclusion  or  discrimination,  but  also  middle-income  households  in 
particularly expensive housing markets. These trends exacerbate intergenerational divides in 
wealth and access to quality and affordable housing, delay family formation, and threaten long-
term demographic stability. 

Rents increased much faster than income. Over the past 15 years, average rents in the EU 
have increased by one quarter (with bigger increases for new rents) and house prices by more 
than half, outpacing household income. Large disparities have been amplifying across countries 
and  regions;  for  example,  Estonia  recorded  a  rent  increase  of  about  222.93%,  Lithuania 
191.134%, Hungary 126.17%, and Ireland 116.95% over this period. Real median disposable 
income at EU level increased by only around 20% over that period, with growth highly uneven 
across Member States. Challenges are particularly acute in urban and tourism areas. 

The housing overburden rate is much higher for households at risk of poverty. In 2024, 
one in twelve Europeans spends 40% or more of their disposable income on housing, while for 
households below 60% of medium income the share of households experiencing housing cost 
132 

 
 
overburden  was  31.1%  at  EU level363. In 2023, 13% of EU residents  reported difficulties364 
paying rent, with the impact falling disproportionately on single adults with dependent children 
(24.6%), people at risk of poverty or social exclusion (23.3%), migrants (18.8%), and persons 
with disabilities (16.5)365. 

There is a gap in the housing cost overburden rate between 18-64 year olds who are “both at-
risk-of-poverty and living in (quasi-)jobless households” and people in the same age group who 
are “both not at-risk-of-poverty and not living in (quasi-)jobless households”366. According to 
EU-SILC 2024 data, it appears that this gap widely differs across EU Member States, ranging 
from 11.0pp in Ireland to 82.7pp in Greece (with the EU average standing at 32.9 367. 

The perceived risk of needing to leave the accommodation increased. In 2020-2022, 6% of 
the EU population perceived a high or very high risk of needing to leave their accommodation 
within the next three months because they can no longer afford it. This proportion substantially 
increased from 1% over the precedent decade. Housing insecurity was highest among tenants 
in the private sector (46% of them are considered at risks of leaving against 32% of landlords 
with a mortgage at risk)368. 

Overcrowding or housing deprivation is a reality. Regarding housing conditions, 16.9% of 
the EU population lived in overcrowded conditions in 2024, with higher proportions often found 
in Eastern European Member States. In 2023, 4% of the EU population faced severe housing 
deprivation, living in overcrowded and unfit dwellings. Dampness, leaks, or rot affected about 
16% of the EU population in 2023, negatively impacting health and well-being. Nearly half of 
the Roma/Traveller population (47%) lives in a state of housing deprivation, that is, often in 
damp,  dark  dwellings  or  housing  without  proper  sanitation  facilities.  Four  out  of  five 
Roma/Travellers  (83%)  live  in  a  household  that  does  not  have  enough  rooms  and  is 
overcrowded.  One  out  of  five  Roma/Travellers  (17%)  live  without  tap  water  inside  their 
accommodation.  Furthermore,  based  on  different  studies  nearly  one  in  two  respondents  of 
African descent (45%) and Muslims (40%) live in overcrowded housing. 

Meanwhile, the supply of affordable and social housing for low-income households and 
groups  at  risk  of  discrimination  has  remained  insufficient  across  most  Member  States 
over the past decade. Urban sprawl and rising land consumption further strain ecosystems and 
biodiversity, highlighting the need to balance housing expansion with sustainability objectives 
e.g.  by  densification,  brownfield  redevelopment  and  a  better  use  of  the  existing  vacant  or 

363 Source: Eurostat (online data code ilc_lvho07a). 
364 Renting difficulties are considered when the respondent (and the other household members) was unable to pay 
their rent using their own resources or was unable to pay on time (as scheduled) due to financial reasons, and is 
therefore forced to borrow money, sell assets or take out overdrafts to pay the rent. 
365 European Commission: Directorate-General for Employment, Social Affairs and Inclusion, Employment and 
social developments in Europe, 2025, Publications Office of the European Union. 
366 This gap indicator is one of the indicators used in the SPC-ISG Minimum income benchmarking framework. 
367 Source: own computation on Eurostat data. 
368  Eurofound,  Unaffordable  and  inadequate  housing  in  Europe,  Publications  Office  of  the  European  Union, 
Luxembourg, 2023, https://data.europa.eu/doi/10.2806/715002. 

133 

 
 
 
derelict building stock. On the other hand, energy renovations of the housing stock can lower 
energy consumption and costs. 

4.2.2.8.1. Combating housing exclusion and homelessness 

Preventing and addressing housing exclusion and homelessness requires policies based on 
a  person-centred,  housing-led  and  integrated  approach.  Person-centred  policies  aim  at 
addressing the specific needs of people in vulnerable situations that experience or are at risk of 
housing exclusion or homelessness. Certain populations may be disproportionately affected by 
housing exclusion or homelessness, with the scale and composition of those affected varying 
significantly  across  national  contexts.  They  include,  among  others,  young  people  (including 
students unable to afford student housing and those leaving institutional or alternative care), 
unemployed persons, vulnerable families (including single parents) with children, victims and 
survivors  of  gender-based  violence,  persons  with  disabilities  or  long-term  care  needs,  old 
persons  in  precarious  housing  situations,  persons  with  a  Roma  background,  with  a  migrant 
background, people belonging to racial or ethnic minorities and LGBTIQ+ persons. 

The contributors to the open public consultation on the EU Anti-Poverty Strategy369 homeless 
people as one of three priority vulnerable groups requiring intervention, alongside children at 
risk of poverty or social exclusion and persons with disabilities. Numerous contributions in all 
consultation exercises called for affordable housing and interventions to combat homelessness 
(see more information in Annex 1 and 2). 

Housing-led approaches, including Housing First, help people at risk of housing exclusion to 
stay in housing, or provide stable housing as quickly as possible, together with support services, 
to  homelessness  people.  Policies  need  to  be  integrated  to  address  the  multidimensional 
challenges  faced  by  homeless  people  (i.e.  social  support,  housing  assistance,  healthcare 
services, labour market integration services etc.). 

Addressing  homelessness  in  an  effective  way  requires  first  and  foremost  a  focus  on 
prevention,  which  remains  largely  under-resourced  and  underutilised.  Prevention 
strategies370  can  be  categorised  into  universal  prevention,  targeting  the  entire  population  by 
boosting affordable housing and social welfare systems; upstream prevention, aimed at high-
risk groups such as vulnerable youth and individuals transitioning from institutional settings; 
crisis prevention for those facing imminent homelessness; and emergency prevention to ensure 
that those without access to housing do not find themselves unsheltered. Preventive measures 
are  typically  more  cost-efficient  and  effective  than  interventions  supporting  people  who  are 
already homeless, yet  countries still prioritise emergency prevention over broader, proactive 
approaches. 

Early  intervention  services  —  such  as  rent  and  utility  bills  arrears  mediation,  debt 
counselling, legal aid, early-warning systems and short-term financial assistance — are 

369 The open public consultation was open between 25 July and 24 October 2025 on  the ‘Have Your Say’ web 
portal. 
370 Mackie, P., Preventive measures against homelessness and housing exclusion: A discussion paper, European 
Platform on Combatting Homelessness, Luxembourg: Publications Office of the European Union, 2022. 

134 

 
 
 
unevenly available and often hard to access. Personalised support for people to be discharged 
from institutions, and adequate financial support, including to address non take-up of benefits 
and services, is required. Strengthening these mechanisms is crucial to breaking the eviction-
to-homelessness cycle. 

People  who  have  become  homeless  need  active  support  to  ensure  that  no  one  lives  in 
emergency or transitional accommodation longer than is required for successful move-on to a 
permanent housing solution. This requires the integration of social, educational, employment 
and  health  services371,  with  a  strong  emphasis  on  family  services,  the  inclusion  of  people 
furthest from the labour market, mental health and support with addictions. 

Housing-led  models,  including  the  Housing  First  approach,  which  combine  permanent 
housing  with  integrated,  personalised  support,  have  demonstrated  lasting  results  by 
addressing  both  housing  and  social  support  needs  comprehensively.  In  this  respect,  the 
availability  of  social  and  affordable  housing  is  fundamental  to  help  prevent  and  reduce 
homelessness. Yet, years of underinvestment have reduced the social housing stock in many 
Member States. Social housing specifically serves those with the lowest incomes and provides 
the long-term stability that private rental markets rarely offer. 

Spotlight on Ireland 

Ireland’s  Delivering  Homes,  Building  Communities  2025–2030  Action  Plan  targets 
homelessness through a mix of prevention, rapid rehousing, and expanded long-term housing 
supply. Its core measures include a new National Homelessness Prevention Framework  to 
stop people entering homelessness; major capital funding to acquire existing homes for long-
term  homeless  families;  and  a  dedicated  Child  and  Family  Homelessness  Action  Plan  to 
address  rising  family  homelessness. The Action Plan significantly expands Housing First, 
providing  over  2000  supported  tenancies  for  people  with  complex  needs,  and  commits  to 
delivering around 12000 social homes per year to increase stable, affordable housing options. 
Tenant protections are strengthened through enhanced rent regulation and short-term letting 
controls, while large-scale affordable housing supports aim to ease pressure on the private 
rental market. Together, these measures focus on preventing homelessness, improving access 
to permanent housing, and reducing reliance on emergency accommodation. 

An  effective  homelessness  strategic  framework  must 
integrate  prevention  and 
rehousing372.  This  means  protecting  vulnerable  households  from  eviction,  intervening  early 
when rent arrears occur, ensuring access to adequate social, employment and health services, 

371 Idem. 

372 O’Sullivan, E., Key elements in homelessness strategies to end homelessness strategies, A Discussion Paper 
European Platform on Combatting Homelessness, Luxembourg: Publications Office of the European Union, 
2022. 

135 

 
 
 
 
 
and expanding the supply of social housing to provide stable long-term solutions. Coordination 
across housing, social, health, and justice systems at all levels of government remains essential, 
and so does ensuring that adequate social and affordable housing stock and support services are 
available to turn the right to housing into a reality for all. 

Access to housing benefits and the availability of social and affordable housing also have 
an important role to play in addressing housing exclusion. More information can be found 
in section 4.2.2.8.3. 

•  EU instruments in place 

The Lisbon Declaration on the European Platform on Combatting Homelessness, signed 
in June 2021 by the Member States, the European Commission, the European Parliament, the 
Economic and Social Committee, the Committee of Regions, civil society organisations, and 
social partners, outlines the European Union's policy framework to address homelessness and 
housing exclusion. The signatories have committed to working together under the European 
Platform on Combatting Homelessness towards ending homelessness by 2030. The Platform 
advocates  for  a  person-centred,  housing-led,  and  integrated  approach  to  addressing 
homelessness.  It  facilitates mutual learning  and sharing of best  practice,  promotes access to 
funding and enhances evidence and monitoring. This collective initiative fosters collaboration 
among  policymakers  and  practitioners  throughout  the  EU.  This  commitment  was  further 
reaffirmed  by  the  Avilés  Declaration  (2023)  and  the  informal  ministerial  meeting  under  the 
Belgian Presidency (2024). 

•  Next steps 

As  part  of  the  EU  Anti-Poverty  strategy,  the  Commission  has  put  forward  a  proposal  for  a 
Council Recommendation on fighting housing exclusion which aims to support Member States 
in preventing and addressing housing exclusion and homelessness. It promotes the design and 
implementation  of  national  strategic  frameworks  based  on  person-centred,  housing-led  and 
integrated policies.  

4.2.2.8.2. Housing assistance for those in need 
Housing  allowances  are  one  of  the  most  widely  used  instruments  to  provide  housing 
support as part of the welfare system. In 2023, EU Member States collectively spent around 
EUR 63 billion on income-targeted housing supports (rent subsidies, housing allowances, and 
other forms of financial assistance)373. In 2022, public spending on housing allowances across 
Europe ranges from between 0.1% and 0.3% of GDP in Czechia, Greece, Ireland, and Sweden 
to more than 0.8% in Finland374.  

373 Housing Europe, The State of Housing in Europe 2023, 2023, https://www.housingeurope.eu/the-state-of-the-
housing-in-europe-2023-2/;  European Commission: Eurostat, ‘Expenditure on housing function by type of benefit 
and means-testing’, [spr_exp_fho], accessed 11/12/25 and European Commission: Eurostat, ‘Statistics Explained 
- Government expenditure on housing and community amenities, accessed 29/10/2025, Government expenditure 
on housing and community amenities. - Statistics Explained - Eurostat 
374 OECD, ‘Affordable Housing Database’, Indicator PH3.1.1: Public spending on housing allowances in OECD 
https://webfs.oecd.org/Els-com/Affordable_Housing_Database/PH3-1-Public-spending-on-
countries, 
housing-allowances.pdf;  European  Commission:  Directorate-General  for  Employment,  Social  Affairs  and 
136 

2022, 

 
 
 
Housing allowances have a poverty reducing effect. In 2022, housing allowances decreased 
the AROP rate by an estimated 1.4 percentage points (from 17.7% based on AROP rate before 
housing allowances to 16.3% of AROP rate) in the EU on average, with the biggest decreases 
in Finland (4.3 pp), Ireland (3.5 pp), France (3.1 pp) and Germany (3.0 pp)375. 

The  poverty-reducing  effects  of  housing  allowances  are  particularly  pronounced  among 
vulnerable households, including those with low work intensity, lower educational attainment, 
and families with children376.  

Research also suggests that cash housing benefits tend to be more cost-effective than in-
kind support, largely because some of the best-performing countries have implemented more 
generous  and  better-targeted  cash  schemes  for  low-income  households377.  However,  the 
effectiveness  of  such  measures  depends  also  on  well-designed  and  targeted  rent  regulation 
policies,  which  are  essential  to  prevent  landlords  from  absorbing  the  benefits  through  rent 
increases.  

Housing allowances and social housing are found to reduce poverty in the short term. However, 
factors such as insufficient stock of social housing, inefficiencies in the occupancy of social 
housing, or the ability of landlords to capitalise (part of) housing allowances through higher 
rents might limit the effectiveness of these housing policies to increase housing affordability 
for the most vulnerable households. This calls for a comprehensive approach when designing 
housing policies so as to maximise returns.378 

Spotlight on Finland 

Finland operates a comprehensive housing allowance system centred on the General Housing 
Allowance  (yleinen  asumistuki),  administered  by  the  national  social  insurance  institution 
(Kela)379. The allowance supports low-income households in meeting housing costs and is 
available mainly to tenants in rental housing. Eligibility and benefit levels are determined 
based on household income, assets, household size and recognised housing costs, which vary 

Inclusion,  ‘ESDE  review  Chapter  3.4  –  ESDE  review  -  ESDE  2024  –  Impact  of  housing  policies  on  poverty 
reduction  and  upward  social  convergence’,  European  Commission  website,  2024,  accessed  04/12/25, 
https://data.europa.eu/doi/10.2767/91555. 
375  European  Commission:  Directorate-General  for  Employment,  Social Affairs  and  Inclusion,  ‘ESDE  review 
Chapter 3.4 – ESDE review - ESDE 2024 – Impact of housing policies on poverty reduction and upward social 
convergence’, European Commission website, 2024, accessed 04/12/25, doi:10.2767/91555. 
376  European  Commission:  Directorate-General for  Employment,  Social Affairs  and  Inclusio,  Employment  and 
the  European  Union,  2024, 
social  developments 
https://data.europa.eu/doi/10.2767/91555. 
377 Bérard, G., & Trannoy, A., Housing Policy Impacts on Poverty and Inequality in Europe, 2025. 
378  European  Commission:  Directorate-General  for  Employment,  Social Affairs  and  Inclusion,  ‘ESDE  review 
Chapter 3.4 – ESDE review - ESDE 2024 – Impact of housing policies on poverty reduction and upward social 
convergence’, 
04/12/25, 
https://data.europa.eu/doi/10.2767/91555. 
379 Kela (Finnish Social Insurance Institution), General Housing Allowance, https://www.kela.fi/general-housing-
allowance 

in  Europe  2024,  Publications  Office  of 

Commission 

European 

accessed 

website, 

2024, 

137 

 
 
 
 
by municipality.  The scheme can cover up to around 70% of eligible housing costs, including 
rent and certain utilities. Persons with disabilities have a right to special support for housing 
under the Disability Services Act, while households with the lowest incomes are eligible to 
social assistance payments for housing costs. The allowance has broad coverage and forms 
part of Finland’s wider housing and social protection framework aimed at ensuring housing 
affordability and preventing homelessness. 

4.2.2.8.3. Access to social and affordable housing 
Access  to social  housing has  an important role to play  in addressing poverty  risks  and 
tackling  homelessness.  While  it  does  not  exist  in  all  EU  Member  States,  it  accounts  for 
approximately 25 million dwellings in Europe. The share of the total social rental housing stock 
varies significantly among Member States with the Netherlands having the highest share (see 
table below380). However, there are significant differences across Member States in terms of 
the scope, design, and functioning of social housing systems. There is no single definition of 
"social  housing"  across  the  EU:  the  term  social  housing  encompasses  a  diverse  range  of 
schemes,  which  can  vary  even  within  a  single  country.  What  they  share  in  common  is  that 
allocation is based on rules and administrative criteria, rather than market mechanisms. 381￼, 
providing housing solutions to those most in need. 

Improving access to affordable housing was considered as the most effective policy in tackling 
poverty by the contributors to the open public consultation (see more information in Annex 1 
and  2).  Regarding  EU-level  actions,  contributors  most  frequently  emphasised  the  need  for 
affordable social housing.  

The social housing stock has declined over the past decades in many EU Member States.382 
The supply of social housing for low-income households and groups at risk of discrimination 
— including those facing barriers related to gender, age, disability, ethnicity, religion, or sexual 
orientation, gender identity or expression and sex characteristics — has remained insufficient 
across most Member States. Today, the EU average share of social housing is between 6 and 
7% of the housing stock, accounting for around 28 million homes. Only three Member States 
have more than 20% of their housing stock classified as social housing: Netherlands (34.1% in 
2021), Austria (23.6% in 2019), and Denmark (21.3% in 2022). Others like France (15.9% in 
2025), Ireland (12.7% in 2016), and Finland (10.9% in 2021) fall between 10–20%. 

380 Data on social housing stock is not available systematically. The best available comparative data is from the 
OECD affordable housing database and provides data for 2022 or earlier. 
381 The exact definition of target groups for social housing falls within the competency of Member States. 
382  OECD,  OECD  Affordable  Housing  Database  -  indicator  PH4.2.  Social  rental  housing  stock,  2024, 
https://oe.cd/ahd. 

138 

 
 
 
 
 
 
 
Spotlight on Austria 

Austria offers a well-established model for the provision of social rental housing through a 
combination of municipal housing and a large sector of limited-profit housing associations 
and  housing  cooperatives.  Limited-profit  housing  associations  and  housing  cooperatives 
operate under the Limited-Profit Housing Act and are legally obliged to calculate rents on a 
cost-recovery basis, reinvesting any surpluses into the provision of affordable housing for 
future generations. Cost-based rents are typically lower than market rents, and the limited-
profit sector targets  a broad income spectrum. Municipal housing also  plays an important 
role, particularly in Vienna where rents are regulated by the National Rental Law and access 
is subject to means testing and residency requirements. The Austrian model combines long-
term financing, regulated providers, and clearly defined, yet relatively broad eligibility rules, 
resulting in a significant and stable social housing stock with a substantial market share and 
a dampening effect on private rents. This makes Austria one of the most comprehensive and 
structured social housing systems in the European Union. 

Social  housing  provision  has  a  positive  impact  on  lowering  the  AROP  rate.  Evidence 
suggests that a sizable social housing sector can improve overall housing affordability, not only 
for  tenants  directly  benefiting  from  such  housing  but  also  through  broader  effects  on  local 
housing  markets.  Social  housing  provision  lowered  the  AROP  rate  by  an  average  of  0.4 
percentage points in 2019, with the strongest impacts in Ireland (-3.7 percentage points) and 
Belgium (-2.4 percentage points)383.  

•  EU instruments in place 

To address housing challenges across the EU, the Commission adopted in December 2025 the 
first ever European Affordable Housing Plan. It contains a set of policy orientations and a 
series of concrete actions to help tackle the structural causes and deliver results for Europeans. 
People in vulnerable situations such as homeless and young people are granted an increased 
focus for targeted actions.  

As  part  of  the  Affordable  Housing  Package  adopted  in  December  2025,  the  Commission 
adopted  the  European  Strategy  for  Housing  Construction  and  reviewed  the  rules  on 
Services of General Economic Interest and introduced a new category for affordable housing 
in  order  to  allow  more  flexibility  for  Member  States  when  financing  affordable  and  social 
housing through State aid.  

The Commission revised the rules on services of general economic interest (SGEIs) to give 
Member States more flexibility to support affordable housing notably through the financing of 
the construction of new buildings and/or renovations of existing buildings. The Commission 
Decision (EU) 2025/2630 of 16 December 2025 on SGEIs aims at preserving existing social 

383 Other data and information on the challenges related to access to social and affordable housing and their impact 
on various social groups are included in the Commission Staff Working Document SWD/2025/1053 final of 16 
December 2025 on Understanding the Housing Crisis, accompanying the Communication from the Commission 
on the European Affordable Housing Plan. 

139 

 
 
 
 
housing models while facilitating support for affordable housing for households that are not 
able, due to market outcomes and (especially) market failures, to access housing at affordable 
conditions. As announced in the Housing Plan adopted on the same day, the Commission will 
provide  guidance  and  support  on  demand  to  Member  States  to  help  them  design  social  and 
affordable housing SGEIs in line with State aid rules. 

Regarding EU funding and financial support, in 2024, the European Commission has released 
a toolkit to help policymakers make the best use of EU funding to invest in social housing and 
accompanying services. The toolkit features 20 case studies that illustrate how EU funds, such 
as The European Social Fund Plus (ESF+), The European Regional Development Fund (ERDF), and 
The Recovery and Resilience Facility (RRF), can be used to improve access to adequate housing. 
Addressing the needs of vulnerable populations, the toolkit outlines strategies for providing 
suitable housing solutions to homeless people, persons with disabilities, Roma communities, 
migrants, refugees, and LGBTIQ+ people. 

The Affordable Housing Initiative brings together housing providers, constructors, the social 
economy and financing partners to replicate successful renovation and regeneration models. Its 
goal  is  to  create  100  lighthouse  districts  for  social  and  affordable  housing  by  2030, 
demonstrating innovative, scalable solutions to the housing crisis.  

Several EU Urban Agenda Partnerships currently promote cooperation with cities on various 
themes,  including  housing,  namely  the  Partnership  on  Cities  of  Equality,  Building 
Decarbonisation Partnership and Partnership on Compact Cities.  

The  Communication  on  the  New  European  Bauhaus,  adopted  in  December  2025,  sets  out 
measures to facilitate the sustainable and quality-driven transformation of neighbourhoods and 
industries, fostering innovative and sustainable solutions for affordable housing construction 
and renovation, and boosting preparedness to climate-related risks and natural disasters. These 
measures  contribute  to  increasing  overall  resilience  to  climate-related  risks  and  natural 
disasters, which disproportionally affect vulnerable and low-income communities 

•  Next steps 

Following  the  adoption  of  the  European  Affordable  Housing  Plan,  the  Commission  aims  to 
swiftly  and  comprehensively  implement  the  priority  actions  in  4  pillars:  boosting  supply; 
mobilising  investments;  enabling  immediate  support  while  driving  reforms;  supporting  the 
most affected. The Housing Alliance offers an enabling framework for close cooperation with 
national and regional administrations, cities, private sector and civil society organisations. The 
Pan-European  Investment  Platform  for  affordable  and  sustainable  housing  aims  to 
strengthen investments and financial operations, including for people in vulnerable situations. 
The  initiatives  put  forward  by  the  Plan  can  develop  a  community  of  practice  on  access  to 
housing, together with other policy EU platforms and networks, notably the European Platform 
for combatting Homelessness. 

4.2.2.9. Access to water and sanitation  
Access  to  clean  and affordable water is  a human right and a public good.  Unaddressed 
inequalities in  access  to  water and sanitation can undermine social, economic and territorial 
140 

 
 
cohesion within the EU, especially in regions facing climate stress or infrastructure gaps, such 
as outermost regions. 

Difficulty  with  access  to  water  and  sanitation is  not  a  widespread  issue  in  the  EU,  but 
challenges remain in specific areas and for specific groups. It is estimated that still around 
23  million  people,  equivalent  to  4%  of  the  EU  population,  are  potentially  at  health  risk 
stemming from no or limited access to good-quality drinking water. In addition, new challenges 
due  to  climate  change  are  emerging  and  can  affect  continuous  access  to  water  and  water 
safety.384 When it comes to sanitation, almost every household in the EU had basic sanitary 
facilities in 2020,and most countries reported that fewer than 1% of their population were living 
in households without a bath, a shower and a flushing toilet, with this share halving on average 
over the last decade.  

There is a strong link between access to basic sanitary facilities and poverty. Compared 
with an EU average of 1.5% for the whole population, 5.1% of people at-risk-of-poverty had 
neither a bath nor a shower nor an indoor flushing toilet in their household in 2020. Moreover, 
in  those  Member  States  that  perform  significantly  worse  than  the  EU  average  and  have  a 
generalised problem of lack of connection to sewerage systems and water services, levels are 
significantly higher for people who are at-risk (17.4% in Latvia, 18.1% in Lithuania, 20.6% in 
Bulgaria and 56.6% in Romania). 

The homeless face significant barriers in accessing water and sanitation. In contrast to other 
essential services, the usage of water and sanitation requires access to stationary infrastructures, 
either by connection to the collecting and treatment system at home or by accessing sanitation 
services and water sources in public spaces. People who do not have a fixed domicile, such as 
the homeless and rough sleepers, can only rely on public infrastructures. However, the provision 
of  drinking  water  in  public  spaces  is  unevenly  available  in  Member  States  and,  while  more 
widespread, public toilets may not be free of charge and may be too expensive for the homeless 
and people sleeping rough. 

The specific situation of d minorities, such as Roma, and particularly their lack of access 
to  water  intended  for  human  consumption,  was  also  acknowledged  in  the  latest  survey 
conducted by the European Union Agency for Fundamental Rights in 2021. The survey shows 
that one out of five Roma lives in a household that has no tap water inside the dwelling, making 
it particularly difficult for them to meet basic hygiene and health needs. 

•  EU instruments in place 

The Drinking water Directive385 (EU) 2020/2184 aims to protect human health by ensuring 
the  quality  and  accessibility  of  drinking  water.  The  2022  recast  of  this  Directive  requires 
Member  States  to  identify  and  address  lack  of  access  to  safe  drinking  water,  especially  for 
vulnerable and marginalised groups, and to take measures to improve access. It also encourages 

384 European Commission: Directorate-General for Employment, Social Affairs and Inclusion, Report on access to 
essential services in the EU – Commission Staff Working Document, Publications Office of the European Union, 
2024, https://data.europa.eu/doi/10.2767/447353. 
385 OJ L, 2020/435, 23.12.2020, ELI: http://data.europa.eu/eli/dir/2020/2184/oj. 

141 

 
 
 
the promotion of tap water, including availability in public buildings and catering services, and 
calls for public drinking water points to be installed and clearly signposted. 

The Urban Wastewater Treatment Directive386 (EU) 2024/3019 regulates the collection and 
treatment of urban wastewater to protect public health and the environment. It requires Member 
States  to  identify  people  without  adequate  access  to  sanitation,  assess  the  reasons  and  take 
measures to improve access.  

The  European  Water  Resilience  Strategy387  (2025)  recognises  that  access  to  clean  and 
affordable  water  is  both  a  human  right  and  a  public  good.  It  warns  that  unaddressed  water-
related inequalities risk undermining economic, social, and territorial cohesion, both within the 
EU and globally. Moreover, climate pressures and infrastructure gaps can further exacerbate 
disparities in access — with the EU’s outermost regions standing out as a key example. 

•  Next steps 

For  the  period  2026-2027  period,  action  to  promote  best  practices  in  securing  clean  and 
affordable  water  is  included  in  the  Commission’s  Water  Resilience  Strategy.  The  strategy 
contains  over  50  key  actions,  whose  progress  can  be  monitored  with  the  Water  Resilience 
Strategy Actions Tracker. 

By  2027,  transparent  billing  for  drinking  water  and  wastewater  will  help  consumers  better 
understand their usage and costs, while new monitoring systems will track public health risks 
in urban wastewater during emergencies. 

By 2029, Member States must report to the Commission on the measures taken to improve 
access to drinking water and sanitation, including for vulnerable and marginalised groups, and 
update this information every six years. 

4.2.2.10. Access to digital communications 
Access to fast, reliable and affordable internet drives economic growth and enables full 
participation  in  society.  As  many  services  move  online,  inadequate  connectivity  risks 
exclusion. Over the past decade, broadband and fibre have expanded across the EU, but without 
targeted  local  action,  parts  of  the  EU  may  remain  excluded  from  the  benefits  of  digital 
transformation  despite  overall  progress.388  However,  full  digitalisation  of  services  can 
exacerbate  inequalities,  making  the  provision  of  accessible  offline  alternatives  essential  to 
mitigate the risk of non-take-up among disadvantaged groups lacking digital access or skills. 

The EU’s Digital Decade targets for 2030 aim for universal gigabit coverage and next-
generation  wireless  networks  in  all  populated  areas.  In  2024,  fixed  very  high-capacity 
networks covered 82.5% of EU households, but only 61.9% in rural areas. Overall 5G coverage, 
essential  for  low-latency,  high-speed  mobile  connectivity,  reached  94.3%  EU-wide,  yet  just 

386 OJ L, 2024/3019, 12.12.2024, ELI: http://data.europa.eu/eli/dir/2024/3019/oj. 
387  European  Commission,  Water  Resilience  Strategy,  https://ec.europa.eu/environment/water/water-resilience-
strategy_en 
388 Eurofoud, Narrowing the digital divide: Economic and social convergence in Europe’s digital transformation, 
Publications Office of the European Union, Luxembourg. p. 21, 2025. 

142 

 
 
 
79.4% in rural areas and only 26.2% with mid-band 5G, which is critical for stable performance. 
Finally,  fibre-to-the-premises,  key  for  reliable,  future-proof  fixed  connections,  still  lags 
behind389. 

Even  where  networks  are  available,  uptake  is  often  constrained  by  affordability, 
accessibility  and  digital  skills;  common  barriers  include  the  cost  of  devices.  The 
Commission’s White Paper “How to master Europe’s digital infrastructure needs?”390 warns 
that without action, disadvantaged end-users may be excluded from the best networks due to 
price  or  location.  Affordability  is  particularly  critical:  according  to  the  GIZ  Beyond 
Connectivity  report391,  the  cost  of  hardware,  electricity  and  mobile  data  tariffs  can  put 
continuous and unrestricted use beyond reach for many. The situation has improved in terms of 
access,  but  not  in  terms  of  equality.  Marginalised  groups  can  be  left  behind  even  in  well-
connected areas. Usage patterns also vary - those with higher socio-economic status are more 
likely to use the internet for career and status enhancement, while lower-income groups rely on 
it mainly for entertainment and communication. Other factors such as the availability of locally 
relevant content, local language support, safety and security concerns, and accessibility issues 
further contribute to the uptake gap.  

Spotlight on Belgium 

Belgium’s “social internet offer” (introduced in March 2024 under Universal Service rules), 
which  caps  prices,  defines  minimum  technical  standards,  and  grants  a  50%  reduction  in 
installation fees for eligible households. 

Geographical divides intersect with socio-economic ones. In Italy, Portugal, Bulgaria, and 
Croatia, over 30% of people aged over 65 have never used the internet, compared with 20% in 
Ireland and Luxembourg. This group, nearly 96 million people, along with  those with lower 
education,  the  unemployed,  and  rural  residents,  are  among  the  least  connected,  resulting  in 
limited access to services such as tax filing, social benefits, and e-health392. 

•  EU instruments in place 

Gigabit Infrastructure Act393 (2024) makes network roll-out “faster, cheaper and simpler” by 
addressing barriers such  as high  costs and complex procedures, accelerating access  to  high-

389 European Commission, Digital Economy and Society Index (DESI) Visualisation Tool, Connectivity indicators, 
2024 data. 
390 European Commission, White Paper on How to Master Europe’s Digital Infrastructure Needs, Digital Strategy, 
2024, 
https://digital-strategy.ec.europa.eu/en/library/white-paper-how-master-europes-digital-infrastructure-
needs. 
391  GIZ  (Deutsche  Gesellschaft  für  Internationale  Zusammenarbeit),  ’Beyond  Connectivity:  A  Handbook  for 
https://www.poverty-inequality.com/wp-
Inclusive 
content/uploads/2020/08/GIZ_Handbook_Beyond-Connectivity_ES.pdf. 
392 Eurofound, Narrowing the digital divide: Economic and social convergence in Europe’s digital transformation, 
Publications Office of the European Union, Luxembourg. p. 21, 2025. 
393 OJ L, 2024/1309, 8.5.2024, ELI: http://data.europa.eu/eli/reg/2024/1309/oj. 

Development‘, 

Digital 

2020, 

143 

 
 
 
 
speed connectivity, a prerequisite for participation in the digital economy and society394. The 
Body of European regulators for Electronic Communications (BEREC) is preparing guidelines 
on coordination of civil works and on access to in-building physical infrastructure, both due by 
November 2025395.  

Universal  Service  provisions  are  governed  by  the  European  Electronic  Communication 
Code (EECC). The EECC establishes that Member States shall ensure that consumers in their 
territory  have  access,  in  light  of  national  conditions  (affordability  and/or  availability),  to 
adequate broadband services. In March 2024, the Body of European Regulators for Electronic 
Communications issued a report compiling Member States’ best practices in defining adequate 
broadband access396.  

The Declaration on Digital Rights and Principles is a commitment by the EU and Member 
States to ensuring universal, affordable, and high-quality connectivity, particularly for people 
in vulnerable situations, including those in rural, remote, and disadvantaged urban areas397. 

•  Next steps 

On  21  January  2026  the  Commission  put  forward  a  proposal  for  a  Digital  Networks  Act 
(DNA)398. Building  upon the European Electronic Communications Code, the DNA aims to 
improve access to secure, high-speed, and reliable connectivity and simplify rules related to 
end-users.  

4.2.3. Ensuring access to key services 

Access to services is an important pillar of the fight against poverty399.  This approach is 
consistent with the active inclusion framework, which identifies access to quality services as a 
key pillar of effective anti-poverty policy. The EU Anti-Poverty Strategy puts a particular focus 
on social services, as well as other relevant services such as healthcare and long-term care, in 

394  Commission  Staff  Working  Document  SWD/2025/290  final  of  16  June  2025  on  Digital  Decade  in  2025: 
Progress and Outlook, accompanying the Communication from the Commission on the State of the Digital Decade 
2025, p. 6. 
395 Commission Staff Working Document SWD/2025/293 final of 16 June 2025 on Monitoring of the European 
Declaration  on  Digital  Rights  and  Principles,  accompanying  the  Communication  from  the  Commission  on  the 
State of the Digital Decade 2025: Keep Building the EU’s Sovereignty and Digital Future, p. 19. 
396  BoR  (24)  40.  https://www.berec.europa.eu/en/document-categories/berec/reports/berec-report-on-member-
states-best-practices-to-support-the-defining-of-adequate-broadband-internet-access-service-0. 
397 European Declaration on Digital Rights and Principles for the Digital Decade, (2023/C 23/01). For the latest 
information on its implementation, please see: Commission Staff Working Document SWD/2025/293 final of 16 
June  2025  on  Monitoring  of  the  European  Declaration  on  Digital  Rights  and  Principles,  accompanying  the 
Communication  from  the  Commission  on  the  State  of  the  Digital  Decade  2025:  Keep  Building  the  EU’s 
Sovereignty and Digital Future, p. 38. 
398 Commission Proposal COM/2026/16 final of 21 January 2026 for a Regulation of the European Parliament and 
of the Council on Digital Networks (Digital Networks Act). 
399  In  EU  law,  services  of  general  interest  (SGIs)  services  are  underpinned  by  shared  European  values  — 
universality, continuity, quality, affordability and strong user protection. The importance of SGIs is firmly rooted 
in EU law, including Article 14 of the Treaty on the Functioning of the European Union, Protocol No. 26 on SGIs, 
and Article 36 of the Charter of Fundamental Rights of the EU. The Letta Report has reaffirmed their importance 
and called for an EU Action Plan to strengthen SGIs, reflecting growing consensus that universal access to quality 
services must be a priority for the Union. 

144 

 
 
 
addition to education and training, which this document covers throughout section 4.1. Finally, 
the Strategy also stresses the territorial dimension of poverty, which is particularly relevant for 
the provision of services.  

4.2.3.1. Social services 

Social  services  in  particular  are  essential  to  the  fight  against  poverty.  Cash  transfers  or 
material  support  are  more  effective  when  combined  with  personalised  social  services, 
particularly for people experiencing persistent poverty whose situation is shaped by multiple, 
mutually  reinforcing  difficulties400.  Although  there  is  no  single  legal  definition  of  social 
services across the EU, they can broadly be understood as services provided to individuals and 
households to prevent, mitigate or address social risks and vulnerabilities, and to support social 
inclusion,  participation  in  society  and  access  to  employment.  They  typically  include  social 
work,  counselling,  coaching  or  mentoring,  rehabilitation,  and  support  for  persons  with 
disabilities,  addictions  or  mental  health  conditions.  Social  services  are  also  instrumental  in 
guiding  users  towards  the  services  they  need  (such  as  education  and  training,  care,  health 
services) and facilitating their access to so-called essential services (energy, transport, digital 
communications, water and sanitation and financial services) by informing them of the relevant 
schemes in places (e.g. energy benefits). 

Beyond  responding  to existing  needs,  social  services  also  play  an  important  preventive 
role. By identifying risks early and intervening before problems escalate, they can help avoid 
more  severe  and  costly  outcomes  for  both  individuals  and  society.  Effective  prevention  can 
reduce  long-term  dependence  on  cash  benefits,  limit  the  need  for  more  intensive  crisis 
interventions, and support smoother transitions into and within the labour market. In this sense, 
well-designed  social  services  are  not  only  a  social  safeguard  but  also  a  forward-looking 
investment in human capital, resilience and sustainable public finances. 

Despite their central role, social services in the EU face a number of persistent and, in 
some  cases,  growing  challenges.  A  key  structural  issue  is  the  lack  of  adequate,  stable  and 
predictable  public  funding.  Budgetary  pressures—exacerbated  by  recent  crises—have 
constrained  investment  in  social  infrastructure  and  workforce  capacity.  In  some  regions, 
services  struggle  to  maintain  basic  provision,  let  alone  expand  or  modernise.  In  2022, 
expenditure on services and in-kind benefits represented on average 9.5% of GDP in the EU, 
ranging from 4.7% in Romania to 12.4% in Sweden. A clear pattern emerges: countries with 
weaker  poverty  reduction  through  cash  transfers  also  tend  to  invest  less  in  services.  While 
providers may seek to diversify funding sources to enhance sustainability, it remains essential 
that public investment evolves in line with changing needs, ensuring that service provision is 
sufficiently developed and responsive. 

Financial constraints contribute to uneven access to services, particularly in rural, remote 
or  disadvantaged  areas,  where  fragmentation  and  administrative  complexity  lead  to 
delays,  unmet  needs  and  non-take-up.  These  barriers  also  affect  access  to  and  take-up  of 

400  European  Commission,  ‘Evaluation  confirms  strong  impact  of  FEAD  support’,  News,  24  July,  2025, 
https://european-social-fund-plus.ec.europa.eu/en/news/evaluation-confirms-strong-impact-fead-support. 

145 

 
 
 
benefits,  as  entitlement to  income support often depends—formally or in  practice—on prior 
contact  with  social  services,  including  registration,  needs  assessment  and  support  with 
application procedures. Where such services are difficult to access, individuals are less likely 
to be identified, informed or supported in claiming their entitlements. As a result, those most in 
need are often the least likely to receive support, undermining the adequacy and effectiveness 
of social protection systems and increasing long-term costs. 

These challenges are compounded for individuals with complex needs, who often require 
coordinated  support  from  multiple  systems,  including  social  services,  employment 
services,  healthcare  and  housing.  Where  these  services  are  organised  and  delivered 
separately,  with  limited  coordination  between  providers,  individuals  may  be  required  to 
complete multiple procedures, submit the same information repeatedly and manage transitions 
between services without adequate support. This reduces the timeliness and effectiveness of 
interventions,  increases  the  risk  that  needs  remain  only  partially  addressed,  and  places  a 
disproportionate burden on those least able to navigate complex systems. Evidence shows that 
the  integrated  delivery  services  for  vulnerable  groups  have  the  potential  for  both  public 
efficiency gains and improved outcomes, preventing cycles of disadvantage or the development 
of other vulnerabilities later in the lifecycle401. 

Workforce constraints further limit the capacity of social services to respond effectively. 
Labour  shortages  in  social  care  are  already  structural  across  Europe.  Despite  employment 
growth, the sector remains marked by low pay, difficult working conditions, high turnover and 
an ageing workforce. In the EU, social services employment rose from 8 to 10 million workers 
between 2014 and 2024, yet workers still earn around 20% less than the economy-wide average, 
38% are aged 50 or over, and demand is projected to rise sharply  as the population ages402. 
These pressures are compounded by territorial imbalances, with rural and disadvantaged areas 
facing greater difficulties in attracting and retaining staff. In addition, limited use of digital tools 
among parts of the workforce constrains productivity and innovation. 

Against this background, digitalisation offers important opportunities to address some of 
these  gaps.  Online  tools  can  expand  access  to  services,  reduce  waiting  times  and  help 
compensate  for  staff  shortages  in  under-served  areas.  The  automation  of  administrative 
processes  can  increase  efficiency  and  allow  staff  to  focus  more  on  direct  support.  Digital 
solutions  can  also  improve  resource  allocation  and  support  new  forms  of  service  delivery, 
including  remote  care  and  monitoring,  thereby  enhancing  continuity  and  users’  sense  of 

Integrating  Social  Services 

401  OECD, 
https://www.oecd.org/content/dam/oecd/en/publications/reports/2015/07/integrating-social-services-for-
vulnerable-groups_g1g53418/9789264233775-en.pdf;  

for  Vulnerable  Groups,  OECD  Publishing,  Paris,  2015, 

Budapest 
https://www.budapestinstitute.eu/KE-04-18-545-EN-N.pdf. 

Inclusion 

Institute, 

Social 

and  Employment  Policies 

(KE-04-18-545-EN-N), 

2018, 

402  Eurofound,  'A  Decade  of  Low  Pay:  Social  Services  Workers  Still  Earn Around  One-Fifth  Less  Than  the 
Average',  Eurofound,  2025,  https://www.eurofound.europa.eu/en/publications/all/a-decade-of-low-pay-social-
services-workers-still-earn-around-one-fifth-less-than-the-average. 

146 

 
 
 
safety403. However, digitalisation also carries risks. People without adequate skills, devices or 
connectivity may face additional barriers, with older people, low-income households and rural 
communities particularly exposed to the digital divide. Eurostat ICT survey also shows varying 
levels of digital interactions across EU Member States in the area of public services. In 2024, 
around  18%  of  EU  citizens  use  public  digital  services  to  request  benefits  or  entitlements. 
However, this share was at 5% or below in 4 Member States (Germany, Czechia, Bulgaria and 
Romania). The survey also points out to huge differences across age groups, education levels 
and  groups  (e.g.  migrant  background),  among  others.  To  ensure  that  digitalisation  supports 
rather  than  hinders  access,  it  needs  to  be  accompanied  by  appropriate  safeguards,  including 
user-friendly design, alternative offline access channels, and investment in digital skills for both 
users and staff. It also requires interoperable data systems and secure data-sharing frameworks 
to enable more integrated and person-centred service delivery. 

Improving  the  quality  of  social  services  remains  a  central  policy  objective.  The  EU’s 
Voluntary  European  Quality  Framework  for  Social  Services,  adopted  in  2010,  provides  a 
common  reference  by  setting  out  principles  and  criteria  to  guide  quality  development  and 
support mutual learning. However, its impact has been limited by low awareness and uneven 
implementation,  as  well  as by the lack of robust  monitoring and benchmarking tools across 
Member States. Strengthening the practical uptake of the framework is therefore essential to 
support the modernisation of services. 

In  parallel,  public  procurement  and  State  aid  play  an  important  role  in  shaping  the 
provision and quality of social services. Public authorities in the EU spend around 15% of 
GDP  each  year  on  public  procurement,  including  in  key  sectors  such  as  energy,  transport, 
healthcare  and  education.  The  Commission’s  evaluation  of  the  Public  Procurement 
Directives404 points to mixed results as regards their effectiveness in promoting the uptake of 
green, innovative and social considerations in procurement, and thereby in supporting broader 
EU policy objectives. In practice, procurement procedures have often placed greater emphasis 
on cost than on quality, with potentially negative consequences for service outcomes and for 
the working conditions of the workforce. A more systematic use of socially responsible public 
procurement  can  help  address  this  by  integrating  quality  and  social  criteria  into  award 
procedures. State aid  can further support the provision  of social services by enabling public 
authorities  to  compensate  providers  for  their  delivery.  Targeted  support  can  help  ensure  the 
availability, accessibility and continuity of services, particularly in  underserved  areas, while 
supporting  investment  in  infrastructure,  workforce  capacity  and  innovation.  When  well-
designed, these instruments can contribute to more resilient, high-quality and accessible social 
service systems that are better equipped to respond to current and future challenges. 

403  Eurofound,  The  Impact  of  Digitalisation  on  Social  Services,  Publications  Office  of  the  European  Union, 
Luxembourg, 2020,  https://www.eurofound.europa.eu/en/publications/all/impact-digitalisation-social-services. 
404 European Commission, Evaluation Report on Public Procurement Directives, Public Buyers Community, 2025, 
https://public-buyers-community.ec.europa.eu/news/publication-evaluation-report-public-procurement-
directives. 

147 

 
 
 
 
Spotlight on Romania  

Romania’s recent reform of social services focuses on improving quality, accessibility and 
prevention. It raises minimum quality standards for providers and strengthens licensing and 
inspection to ensure compliance. The new legislation, if paired with adequate investments, 
may improve access to  home- and community-based care, reduce reliance on institutional 
settings and support independent living for older people and those needing long-term care. 
The  legislation  also  reinforces  oversight  by  giving  inspectors  stronger  tools  to  monitor 
service quality.  The reform represents  an important  step away  from  an institution-centred 
care paradigm towards community-based, inclusive and rights-based social services. 

•  EU instruments in place 

The EU Voluntary European Quality Framework for Social Services (2010) developed by 
the  Social  Protection  Committee  and  the  European  Commission,  sets  out  a  common  set  of 
principles to guide the quality, accessibility and user-centred delivery of social services across 
Member States. Although non-binding, the framework provides a shared reference for public 
authorities, service providers and stakeholders in developing, assessing and improving social 
services.  It  identifies  key  components  of  quality—such  as  respect  for  users’  rights,  person-
centred  support,  staff  qualifications,  good  governance  and  continuous  improvement—and  is 
designed to be flexible enough to apply across national, regional and local contexts. 

that  can  support  SRPP, 

The  current  2014  Procurement  Directives  already  contain  a  general  social  clause  (Article 
18(2)), obliging economic operators and subcontractors to comply with international, EU, and 
national labour, social, and environmental obligations. Furthermore, the Directives provide for 
several  ‘social  articles’ 
including  reserved  contracts  for 
work‑integration  social  enterprises  and  sheltered  workshops  (Article  20),  socially‑oriented 
contract performance clauses (Article 70), and the possibility to reserve certain social and health 
services  to  mission‑driven  non‑profit  organisations  (Article  77),  all  aimed  at  supporting 
employment  and  social  inclusion  of  people  in  vulnerable  situations.  However,  exclusion 
grounds  remain  to  a  large  extent  discretionary,  oversight  of  subcontracting  chains  can  be 
challenging, and price-focused award approaches remain common in several Member States. 
This leads to divergent practices, inconsistent enforcement, and fragmentation in the application 
of SRPP across the EU. 

The  Commission  has  started  revising  the  General  Block  Exemption  Regulation  (GBER), 
with options under analysis including, where necessary, updates to the provisions on aid for the 
recruitment of disadvantaged or severely disadvantaged workers, aid for access to finance for 
social enterprises, training aid  and aid  for the employment of workers with  disabilities.  An 
important caveat is that the simplification of State aid rules creates the possibility for Member 
States to channel resources into areas such as social investment, but it does not ensure that such 
measures will be undertaken in practice. 

148 

 
 
 
 
•  Next steps 

The Social Protection Committee and the European Commission will initiate the revision of 
the voluntary European Quality Framework for Social Services  to update it in line with 
evolving needs and strengthen its relevance and use across Member States. 

In the context of the EU’s Anti-Poverty Strategy, in 2027, the Commission will put forward a 
proposal  for a Council Recommendation, which will aim to  facilitate access  to  services and 
integrated support. In particular, it will help to ensure a single access point, strengthen outreach 
and proximity to recipients, foresee a rapid assessment of the needs of the user followed by an 
integrated support plan as well as coordinated referral to enabling and essential services. 

The ongoing revision of the public procurement Directives offers an opportunity to reinforce 
the effective application of the existing social provisions and to promote their more consistent 
use across Member States. By clarifying obligations, improving transparency and strengthening 
implementation mechanisms, the revision could help contracting authorities make better use of 
socially  responsible  public  procurement  within  the  current  framework,  thereby  supporting 
quality service provision, fair working conditions and social inclusion outcomes. 

The 2025 Communication Delivering on the Clean Industrial Deal reiterates the commitment 
to assess “if and how State aid rules should be updated to provide better incentives for industry 
to invest in upskilling, reskilling, quality jobs and recruitment of workers for a just transition”, 
as  part  of  the  ongoing  revision  of  the  General  Block  Exemption  Regulation  (GBER), 
planned for the end of 2026. In the same Communication, the Commission also commits to 
developing  “dedicated  guidance  to  assist  Member  States  when  designing  State  aid 
measures for social support and social investment”.  

4.2.3.2. Healthcare and long-term care 

Healthcare and long-term care are among the services, which are instrumental to the fight 
against poverty. While access to high-quality healthcare, including mental health, regardless 
of one’s income situation should be a reality for all,  long-term care services  are also key to 
alleviate the financial and social pressures on informal carers, often women. 

4.2.3.2.1. Healthcare 
Poverty is a major cause of ill health, due to a lack of financial means to afford healthy 
lifestyles  and  healthcare405.  While  high  out-of-pocket  payments  can  push  households  into 
poverty, they are generally a consequence of ill health rather than a primary cause. Ill health is 
in  first  place  shaped  by  socioeconomic  determinants  such  as  income,  education,  living 
conditions and employment status. In 2024, only 59.5% of people aged 16 or over in the lowest 
income  quintile  perceived  their  health  as  very  good406.  There  are  large  socioeconomic 
inequalities in access to healthcare, living conditions, and lifestyle factors, often resulting in 

405 O’Donnell, O., ‘Health and health system effects on poverty: A narrative review of global evidence’,  Health 
Policy, 142, 2024, https://doi.org/10.1016/j.healthpol.2024.105018  
406  Eurostat,  Self-perceived  health  statistics,  Statistics  Explained,  2025,  https://ec.europa.eu/eurostat/statistics-
explained/index.php?title=Self-perceived_health_statistics 
149 

 
 
 
higher  rates  of  non-communicable  diseases  for  those  with  low  socio-economic  status.  407. 
Inequalities in dietary intake between lower and higher socioeconomic groups are observed408 
409. 

In  turn,  ill  health  is  a  major  cause  of  poverty,  as  out-of-pocket  costs  of  care  can  be 
substantial410. Unmet medical needs on average in the EU may be relatively low: 2,5% of the 
population reported unmet needs for medical care in 2024. The digital divide can be a barrier 
to health access, due to limited digital literacy, device access, and connectivity of people at risk 
of poverty or social exclusion. Nevertheless, the cost of medical care was the most common 
reason for unmet needs, which was reported by 2.1% of people with lowest income, compared 
to 0.2% with highest income. About 15% of healthcare on average is paid from household out-
of-pocket spending and in countries with higher levels of out-of-pocket spending, paying for 
healthcare may be a driver of poverty.411 Associated costs of transport and difficulty to work 
due  to  long-term  illness  can  lead  to  further  loss  of  income412.  As  such  public  coverage  of 
healthcare benefits contributes significantly to reducing income inequality in the EU413. 

Spotlight on the Irish reform improving access to healthcare  

In 2023, Ireland implemented a series of legislative reforms aimed at enhancing access to 
healthcare  for  its  citizens.  These  measures  included  the  abolition  of  inpatient  charges, 
effectively removing financial barriers associated with hospital stays and making healthcare 
more affordable for the general population. Alongside this, eligibility for general practitioner 
(GP) care was significantly expanded, allowing a broader segment of the population to access 
essential medical services without financial strain. These reforms were designed to promote 
equitable access to healthcare, reduce cost-related obstacles faced by patients, and ensure that 
all individuals can receive necessary medical care, thereby improving overall public health 
and well-being. 

Lancet 

analysis’, 

time-series 

407 OECD, Beating Cancer Inequalities in the EU: Spotlight on Cancer Prevention and Early Detection, OECD 
Health Policy Studies, OECD Publishing, Paris, 2024, https://doi.org/10.1787/14fdc89a-en. 
408  Placzek, O.,  ‘Socio-economic  and  demographic  aspects  of  food  security  and  nutrition’, OECD  Food, 
Agriculture and Fisheries Papers, No. 150, OECD Publishing, Paris, 2021, https://doi.org/10.1787/49d7059f-en. 
409 Assad, Z., Trad, M., Valtuille, Z., Dumaine, C., Faye, A., Ikowsky, T., Kaguelidou, F., Osei, L., Ouldali, N. and 
Meinzer,  U.,  ‘Scurvy  incidence  trend  among  children  hospitalised  in  France,  2015–2023:  a  population-based 
interrupted 
2025, 
The 
https://doi.org/10.1016/j.lanepe.2024.101159  
410 O’Donnell, O., ‘Health and health system effects on poverty: A narrative review of global evidence’,  Health 
Policy, 142, 2024, https://doi.org/10.1016/j.healthpol.2024.105018 
411 OECD/European Commission, Health at a Glance: Europe 2024, State of Health in the EU, Brussels, 2024, 
Health at a Glance: Europe 2024 - European Commission 
412 O’Donnell, O., ‘Health and health system effects on poverty: A narrative review of global evidence’,  Health 
Policy, 142, article 105018, 2024,  https://doi.org/10.1016/j.healthpol.2024.105018 
413 Eurostat, Impact of health social transfers in kind on income distribution and inequality, Statistics Explained, 
2022,  Luxembourg,  Publications  Office  of  the  European  Union,  https://ec.europa.eu/eurostat/statistics-
explained/index.php?title=Impact_of_health_social_transfers_in_kind_on_income_distribution_and_inequality 
150 

Regional  Health 

Europe, 

49, 

– 

 
 
 
 
 
Health  and  social  transfers  in-kind  benefits  contribute  substantially  to  a  reduction  of 
poverty  and  inequality.  A  recent  analysis  assessing  the  role  of  healthcare  in  reducing 
inequalities  in  the  EU  414,  shows  that  healthcare  coverage  has  an  inequality  and  poverty-
reducing  impact  in  all  Member  States,  comparable  to  that  of  cash  transfers,  such  as 
unemployment benefits. Health Social Transfers in Kind (STiKs) have a higher redistributive 
impact compared to cash transfers (excluding pension benefits) in about half of the countries. 
The project also developed innovative tools and metrics that Member States can leverage when 
designing reforms. In times of fiscal pressure, the available tool is more crucial than ever — it 
gives Member States a solid evidence base to safeguard universal health coverage and ensure 
that cost-saving measures do not come at the expense of equity and social protection. 

Mental  health  is  an  integral  part  of  health.  Before  the  COVID  pandemic,  mental  health 
challenges already represented a major public health and socio-economic concern across the 
EU. An estimated 84 million people—approximately one in six Europeans—were living with 
a mental health condition. Children and young people are particularly affected. 59% of young 
people (15-24-year-olds) had an emotional or psychosocial problem (such as feeling depressed 
or anxious) in the last 12 months415 and suicide is the second leading cause of death among 
young  people  (15  to  19  years  old)416.  However,  for  many,  the  cost  of  private  mental  health 
services is prohibitive. The total economic costs of mental health issues exceed EUR 600 billion 
per  year,  or  more  than  4%  of  EU  GDP417.  These  costs  stem  from  healthcare  expenditure, 
productivity losses and reduced labour market participation, and are unevenly distributed across 
regions, social groups, genders and age groups, reflecting persistent inequalities in exposure to 
risk factors and access to support. 

There  is  a  strong  link  between  mental  health  and  poverty.  Stigma,  discrimination,  and 
mistrust  profoundly  inhibit  engagement,  particularly  within  communities  grappling  with 
poverty, which exacerbates mental health challenges.418 Individuals living at risk of poverty or 
social  exclusion  often  face  relentless  stress  due  to  financial  instability,  limited  access  to 
resources, and inadequate support systems.419 This constant strain erodes mental well-being, 
leading to heightened anxiety, depression and hopelessness. The pervasive stigma attached to 
mental  health  struggles  further  deepens  the  isolation  and  prevents  affected  individuals  from 
seeking help, while discrimination marginalises them within society. 

414 European Commission: Directorate-General for Health and Food Safety, The Role of Healthcare in Reducing 
Inequalities and Poverty in the EU, Brussels, 2025, Report - The Role of Healthcare in Reducing Inequalities and 
Poverty in the EU - Public Health. 
415 Mental health - Eurobarometer survey, October 2023. 
416  UNICEF,  ‘The  State  of  the  World’s  Children  2021:  On  My  Mind  –  Promoting,  protecting  and  caring  for 
children’s mental health, Regional brief: Europe, 2021’, The State of the World’s Children 2021: On My Mind – 
Promoting, protecting and caring for children’s mental health, Regional brief: Europe. 
417 Commission Communication COM/2023/298 final of 7 June 2023 on a Comprehensive Approach to Mental 
Health. 
418 Patel, V., & Kleinman, A., Poverty and common mental disorders in developing countries, Bulletin of the World 
Health Organization, 81(8), 609-615, 2023. 
419 World Health Organization, ‘Social determinants of mental health’, World Health Organization, 2014. 

151 

 
 
 
In addition to chronic stress, people living at risk of poverty or social exclusion are more likely 
to experience food insecurity, drug-related negative health and social outcomes, violence, and 
limited access to healthcare, all of which increase the risk of mental illnesses such as depression 
and anxiety. This is also the case for children420. At the same time, mental health problems can 
reduce  a  person’s  ability  to  work,  engage  with  and  complete  education,  or  maintain  social 
relationships—pushing  individuals  and  families  deeper  into  poverty.  The  World  Health 
Organization421 (WHO) notes that people in low socioeconomic groups are at a higher risk of 
mental disorders due to social inequality and exclusion. 

Adolescents  today  experience  poorer  mental  health  than  previous  generations 
compounded  by  bullying  and  cyberbullying.  Social  media  can  intensify  stigma  and 
exclusion,  deepening  vulnerability.  For  learners  at  risk  of  poverty,  education  is  central  to 
protecting wellbeing and mental health amid heightened social and economic stress. 

There  is  also  a  link  between  poverty  and  loneliness.  People  at  risk  of  poverty  or  social 
exclusion  (or  people  in  unemployment)  tend  to  have  a  higher  likelihood  of  experiencing 
loneliness.  A  recent  OECD  report  on  loneliness422  reveals  that  people  in  the  lowest  income 
quintile are “6.2 times lonelier (13% vs 2%)423”424 than people in the highest income quintile. 
Poverty tends to prevent people from having sufficient financial means to take part in social 
activities.   

Poverty  and  cancer  are  closely  interrelated,  with  economic  disadvantage  significantly 
influencing cancer risk, diagnosis, treatment, and survival. People living at risk of poverty or 
social  exclusion  are  more  likely  to  be  exposed  to  cancer  risk  factors  such  as  tobacco  use, 
hazardous work environments, and environmental pollution, while also having limited access 
to screening and early detection. As a result, cancer is often diagnosed at a later stage among 
low-income  populations,  leading  to  higher  mortality  rates.  Poverty  also  increases  financial 
strain after diagnosis, as treatment costs often lead to catastrophic health expenditure. The same 
accounts for poverty and cardiovascular diseases. Socio-economically disadvantaged groups 
experience  poorer  heart  health  outcomes  and  limited  access  to  preventive  care.  Monitoring 
socioeconomic  inequalities  in  health  can  guide  policymakers  to  implement  more  targeted 
interventions to improve access to prevention and equitable care for all, particularly the most 
disadvantaged groups. This can have important implications to reduce the burden of cancer and 
other non-communicable diseases. 

In  this  context,  it  should  be  noted  that  lower-income  households  are  particularly 
vulnerable to environmental stressors that directly affect health and daily life. Heat, noise, 

420 International Monetary Fund, ‘Rising Child Poverty in Europe: Mitigating the Scarring from the COVID-19 
Pandemic’, 2023, Rising Child Poverty in Europe: Mitigating the Scarring from the COVID-19 Pandemic 
421 World Health Organization. Mental health, poverty and development. 2010. 
422 Organisation for Economic Co-operation and Development (OECD), ‘Social Connections and Loneliness in 
OECD Countries’, 2025. 
423 In OECD countries with available data. 
424 Organisation for Economic Co-operation and Development (OECD), ‘Social Connections and Loneliness in 
OECD Countries’, 2025. 

152 

 
 
 
and  air  pollution  are  often  concentrated  more  pronounced  in  socially  disadvantaged 
neighbourhoods. These areas also tend to have fewer parks and green spaces, and residents are 
more likely to live near main roads or in densely populated districts with limited access to green 
and recreational areas—factors that can worsen health outcomes and reduce overall quality of 
life.  Air pollution is  a particularly  significant  concern in  this context:  concentrations of fine 
particulate matter (PM2.5) – the pollutant associated with the greatest health impacts – have 
been consistently around one-third higher in the poorest EU regions compared to the wealthiest 
ones. Recent studies also point to higher risk for vulnerable population groups of pollution from 
per- and polyfluoroalkyl substances (PFAS), the exposure to which negatively affects human 
(e.g. reproductive) health. 

•  EU instruments in place 

Several EU4Health founded actions help Member States put in place more targeted policy 
solutions ensuring securing universal health coverage and accelerating the rate of improvement 
for  the  groups  in  vulnerable  situations.  A  recent  project  with  the  Joint  Research  Centre  on 
assessing  the  role  of  healthcare  in  reducing  inequalities  and  poverty  in  the  EU425  provides 
metrics to support Member States evaluate the social impact of healthcare systems and inform 
potential reforms. 

Another EU4Health-funded action with the WHO Barcelona Office  provided metrics on the 
impact  of  out-of-pocket  spending  on  poverty  and  good  practices  on  improving  financial 
protection  for  medicine  policies  and  mental  healthcare  services.  Member  States  can  use  the 
evidence,  tools,  and  policy  recommendations  from  these  actions  to  advance  systemic 
improvements in access to healthcare. 

The Commission supports Member States in addressing groups in vulnerable situations at risk 
of poverty in its policies and actions on non-communicable diseases, health promotion, disease 
prevention and risk factors, by raising public awareness, increasing health literacy, and reducing 
health inequalities. 

‘Healthier  Together’  EU  non-communicable  diseases 

The 
the 
Communication on a comprehensive approach to mental health, support Member States and 
stakeholders  in  developing  and  implementing  actions  that  focus  on  addressing  groups  in 
socioeconomically disadvantaged and vulnerable situations. This includes several projects and 
initiatives financed by the EU4Health programme.  

initiative426  and 

For  example,  the  Joint  Action  PRISM427  supports  European  countries  to  collaborate  on 
transferring best practices that address mental health of vulnerable groups, such as the BIZI 
programme to promote suicide prevention in community settings; Act Belong Commit to foster 
emotional wellbeing in children and young people; and Circle of Friends to address loneliness 

425European Commission: Directorate-General for Health and Food Safety, The Role of Healthcare in Reducing 
Inequalities and Poverty in the EU, Publications Office of the European Union, Brussels, 2025, Report - The Role 
of Healthcare in Reducing Inequalities and Poverty in the EU - Public Health. 
426 Healthier together – EU non-communicable diseases initiative - European Commission. 
427 JA PRISM - Forskningsenheden. 

153 

 
 
 
in  the  elderly.  A  ’Digital  Toolkit  for  Child  and  Adolescent  Health  and  Mental  Wellbeing 
Promotion’  is  being  developed  by  UNICEF,  with  EUR  2  million  from  the  EU4Health 
Programme.  Moreover,  a  multidisciplinary  training  and  exchange  programme  –  EU-
PROMENS  -  invested  EUR  9  million  from  EU4Health  to  train  around  2.000  health 
professionals across the EU by 2026. The Commission also hosts the EU Best Practice Portal 
for Public Health428, where proven and concrete practices are publicly available for Member 
States to transfer and adapt to their national, regional or local situation. 

Furthermore,  to  reduce  the  existing  inequalities  in  cardiovascular  health  between  Member 
States,  regions,  population  groups  and  genders,  the  Safe  Hearts  Plan  will  develop  an  EU 
cardiovascular  health  inequalities  dashboard.  Addressing  these  inequalities  requires  a 
coordinated approach across the care pathway. 

Identifying and reducing cancer inequalities is a key cross-cutting theme of Europe’s Beating 
Cancer Plan429 (2021). The Plan covers the entire continuum of cancer care, integrating an 
equity  perspective.  Central  to  the  Plan  is  a  strong  commitment  to  health  equity  to  reduce 
disparities  across  regions  and  populations.  The  European  Cancer  Inequalities  Registry430 
(ECIR) is a flagship initiative of the Cancer Plan which also has a focus on socioeconomic 
disparities. 

The Action Plan against cyberbullying (2026) aims to protect children online.431 

•  Next steps 

Under  the  EU4Health  Programme  and  in  cooperation  with  JRC,  a  literature  review  will  be 
conducted focusing on groups in vulnerable situations, including Roma populations, migrants 
and people experiencing homelessness. It will gather information on health-related inequalities, 
with a special focus on cancer in the framework of the European Cancer inequalities Registry, 
but also on cardiovascular diseases and mental health. 

4.2.3.2.2. Long-term care 
There is a strong interplay between long-term care (LTC) needs and the risk of poverty 
and  social  exclusion.  Many  people  with  care  needs  face  significant  barriers  in  accessing 
adequate services, particularly when formal care is unaffordable, limited, or unavailable.  In 
2024,  financial  concerns  prevented  11%  of  people  with  LTC  needs  from  accessing 
professional home care, rising to 30% in some countries — underscoring the urgent need for 
affordable  and  accessible  care  options.  Out-of-pocket  expenses  remain  particularly  high, 
especially for residential care, where public social protection typically covers a smaller share 
of costs than for home care.  In  addition,  limited availability of quality  and affordable care 
services, including in rural and depopulated areas also leads to unmet needs to LTC. 

428 Best practices Portal. 
429 Commission Communication COM/2021/48 final of 3 February 2021 on Europe’s Beating Cancer Plan. 
430 European Cancer Inequalities Registry | ECIR - European Cancer Inequalities Registry. 
431  Commission  Communication  COM/2026/71  final  of  10  February  2026  on  the  Action  Plan  Against 
Cyberbullying: "Safer Online, Stronger Together". 

154 

 
 
 
A pronounced socio-economic gradient further exacerbates these challenges: in the EU-27, 
35.9% of people in the lowest income quintile needed long-term care in 2019, compared with 
only  17.2%  in  the  highest  income  quintile.  Similarly,  unmet  care  needs  were  significantly 
more prevalent among poorer households, affecting 51.2% of people in the bottom income 
quintile versus 39.9% in the top quintile. The higher need for long-term care of people with 
lower incomes is related to the generally worse health status of this group. People with low 
socio-economic status are exposed to more health-related risk factors such as poor living and 
working  conditions;  and  some  lifestyle  behaviours  (such  as  nutrition  habits,  physical 
inactivity, obesity, smoking) may be important risk factors for many diseases that later lead to 
a  need  for  long-term  care.  Importantly,  people  with  low  socio-economic  status  also  report 
more difficulties in accessing healthcare. 

Social protection for long-term care can play a vital role in reducing the risk of poverty 
for people with long-term care needs. According to OECD432, in nearly all Member States, 
more than 70% of long-term care users would be at risk of poverty without social protection. 
Public benefits and services reduce poverty risks associated with LTC costs but not always 
significantly. LTC benefits and services reduce poverty risks by almost 30 percentage points 
across countries. The LTC systems of Denmark, the Netherlands and Finland reduce poverty 
risks  through  public  benefits  and  services  by  more  than  70  percentage  points.  However, 
poverty reductions can be close to zero in other countries, showing thus the need to strengthen 
adequacy of social protection for long-term care. Only in Malta, Luxembourg and Denmark, 
reduces the public support poverty risks among long-term care users to levels comparable with 
the general population. 

Care responsibilities are often associated with financial and social pressures on informal 
carers — most often women — who frequently reduce or leave paid employment to provide 
unpaid care to relatives or friends. In 2019, 20% of women and 13% of men aged 45–64 in the 
EU  provided  high-intensity  care,  with  rates  exceeding  30%  in  some  Member  States.  Such 
interruptions in employment lead to income loss, slower career progression, and ultimately, 
reduced  pension  entitlements,  thereby  widening  gender  gaps  in  both  employment  and 
retirement  income.  Care-giving  career  breaks  still  concern  primarily  women,  and  pension 
entitlements accrued during such breaks, while they cannot compensate for career penalties, 
can  significantly  reduce  the  direct  impact  of  such  periods  on  future  pension  incomes,  thus 
contributing to a smaller gender pension gap. 

Low  wages  and  difficult  working  conditions  in  the  formal  long-term  care  sector 
contribute to labour shortages and in-work poverty. In 2022, long-term care workers in 13 
Member States433 earned less than 80% of the average hourly wage—dropping to around 64–
65% in three of them—highlighting the urgent need for improvement in this essential sector. 
Furthermore, the sector also is confronted to important shares of undeclared or underdeclared 
work, with workers in his situation being equally more exposed to risk of poverty and lack of 

432 OECD, Is Care Affordable for Older People?, OECD Publishing, Paris, 2024. 
433  Bulgaria,  Cyprus,  Denmark,  Estonia,  Finland,  Italy,  Latvia,  Malta,  Poland,  Portugal,  Romania,  Spain  and 
Sweden. 

155 

 
 
 
adequate  labour  and  social  protection,  Ensuring  fair  pay  and  decent  working  conditions  is 
essential to attract and retain a skilled workforce and to guarantee sustainable, high-quality 
care provision. 

A recent European Commission Joint Research Centre (JRC) report shows that changes in the 
age structure of the population mean fewer informal caregivers are available to care for older 
adults than in the past. In the future, this trend is likely to worsen. Younger adults today are 
likely to face a higher caregiving burden when they reach their 50s and 60s. They may also 
receive  less  informal  care  when  they  are  older.  Achieving  intergenerational  fairness  in 
informal  long-term  care  requires  redistributing  care  responsibilities  and  providing  more 
support to caregivers434. 

Demographic  ageing  is  leading  to  not  only  increased  needs  for  long-term  care  but  also  to 
additional  challenges  in  terms  of  workforce  shortages,  widening  the  care  gap.  Public 
expenditure pressure as well as affordability concerns are also further drivers for challenges 
in ensuring adequate pay in the sector. However, public support for the care sector is a social 
investment which, in parallel with action on sustainable financing, brings multiple returns for 
individuals, society and the economy. Health promotion, disease prevention, timely and good 
quality healthcare as well as healthy living policies have great potential to postpone or reduce 
the  need  for  health  care  and  long-term  care  while  enabling  ageing  at  home  for  as  long  as 
possible. Increasing investment in care contributes to social fairness and gender equality and 
promotes women’s participation in the labour market and job creation. 

•  EU instruments in place 

The European Care Strategy435 (2022) aims to improve access to high-quality, affordable, 
and  accessible  long-term  care  services  across  the  EU.  The  Council  Recommendation  on 
access  to  affordable  high-quality  long-term  care436,  adopted  together  with  the  Care 
Strategy,  provides  guidance  to  Member  States  on  the  direction  of  national  long-term  care 
reforms. These initiatives directly address the risk of poverty for people in need of long-term 
care and their carers. Member States are recommended to strengthen social protection of long-
term  care  and  therefore  also  affordability  of  care  services,  to  ensure  adequate  pay  and  fair 
working  conditions  in  the  sector  and  to  provide  financial  support  and  access  to  social 
protection for informal carers. 

Spotlight on Slovenia 

Slovenia introduced a major reform of its long-term care system with the adoption of the 
new  Long-Term  Care  Act  (ZDOsk-1)  in  2023,  which  established  a  mandatory  social 

434 Bernini, A., Natale, F., Nedee, A. And Querin, F., Informal long-term care in the context of demographic change 
and  intergenerational  fairness  in  the  EU,  Publications  Office  of  the  European  Union,  Luxembourg,  2026, 
https://data.europa.eu/doi/10.2760/9689703, JRC145258. 
435 European Commission, A European Care Strategy for caregivers and care receivers, Press release, 7 September 
2022, Brussels, https://ec.europa.eu/commission/presscorner/detail/en/ip_22_5099  
436OJ C, C/2022/476, 15.12.2022, p. 1, ELI: EUR-Lex - 32022H1215(01) - EN - EUR-Lex. 

156 

 
 
 
 
insurance scheme for LTC. The reform aims to ensure universal, equitable access to care 
while  reducing  the  financial  burden  on  users  and  improving  fiscal  sustainability  through 
pooled  risk-sharing.  By  shifting  financing  from  fragmented  arrangements 
to  a 
comprehensive insurance model, Slovenia seeks to lower out-of-pocket costs and improve 
affordability of LTC services while strengthening community-based care.  

• 

Next steps 

The indicator-based EU monitoring framework for the LTC recommendation developed by 
the  Commission,  was  approved  by  the  Social  Protection  Committee  in  May  2025  and  will 
reinforce policy analysis and guidance going forward. 

The 2027 SPC–Commission Report on Adequate Social Protection in Old Age (ADAGE) will 
provide an integrated EU analysis of pension and long-term care adequacy - including poverty 
protection, income maintenance and LTC affordability - and will review recent reforms and 
future challenges for old-age social protection. 

The Commission will prepare a report on the implementation of the Council Recommendation 
on long-term care.  

As mentioned in the EU Anti-Poverty Strategy, in 2027, the Commission will put forward a 
European Care Deal, setting out a comprehensive package of measures to tackle the challenges 
posed by an ageing population, and the increasing demand for long-term care services across 
Europe, focusing on supporting both professional and informal carers and thereby enhancing 
access and quality of care services, including for vulnerable groups. In particular the Care Deal 
will guide reforms and investments for affordable and high-quality care services, with specific 
attention  given  to  those at  risk  of  poverty,  as  well  as  for  strengthening  the  attractivity  and 
quality of jobs in the care sector. 

4.2.3.3. Addressing territorial disparities 
As regards access to services, but also labour market and other opportunities, it is essential to 
address territorial disparities. This requires robust urban policies, rural development policies as 
well as policies to support outermost regions. In addition to the policy areas described below, 
the EU cohesion funds have an important role in addressing the territorial dimension of poverty 
and social exclusion as described in chapter 5.2. 

The  forthcoming  strategy  on  the  "Right  to  Stay"  aims  to  ensure  that  people,  particularly 
younger generations, have genuine possibilities to build their future in their home regions. This 
strategy  is  part  of  a  broader  effort  to  address  the  demographic  challenges  faced  by  Europe, 
including  the  need  to  sustain  communities  and  maintain  essential  public  services.  One  key 
element is the need for a transformative agenda to reaffirm the right to stay as a cornerstone of 
territorial cohesion and inclusive development. 

157 

 
 
 
 
4.2.3.3.1. Urban development policy 

Even  though  cities  in  the  EU  are  in  general  centres  of  growth  and  opportunities,  they  face 
persisting and, in some cases, growing challenges in relation to income inequality, and poverty. 
These challenges not only disproportionally affect vulnerable groups but are often concentrated 
in disadvantaged neighbourhoods. 

Achieving inclusive growth and addressing poverty and social exclusion in cities requires 
a whole-of-government, multi-level and multi-stakeholder approach that aligns long-term 
vision,  actionable  targets  and  delivery  and monitoring mechanisms  across  policy  areas 
and  governance  levels.  Without  such  coordination,  initiatives  at  urban  level  risk  being 
fragmented, reinforcing cycles of inequality and deepening divides. Local and regional anti-
poverty strategies, particularly those integrating housing, health, education and social services 
have  shown  strong  potential  to  reduce  these  risks.  Integrated  policies  and  investments, 
(including service development, human capital, infrastructure, and reforms), co-created with 
relevant  stakeholders,  should  therefore  address  both  individual  needs  and  place-based 
disadvantages and be coordinated within broader urban development strategies that combine 
social, economic, sustainability, and territorial goals. 

•  EU instruments in place 

The  EU  Agenda  for  Cities,  adopted  in  December  2025,  sets  out  a  forward-looking 
perspective for sustainable and integrated urban development. This Agenda aims to provide a 
framework to  strengthen the territorial  and urban dimension of EU policies and streamlined 
support to address cities’ needs and implement key EU priorities at the local level. One of the 
key policy areas identified are social inclusion and equality. 

 The  European  Urban  Initiative,  with  ERDF  funding  of  EUR  395  million  in  the  current 
programming period, helps cities of all sizes, to build capacity and knowledge in the area of 
sustainable urban development and develop transferable and scalable innovative solutions to 
urban challenges of EU relevance, including social inclusion. 

The  URBACT  programme,  under  Cohesion  policy,  promotes  cooperation  and  capacity 
building among cities to develop solutions to urban challenges. Its 2018 capitalisation work on 
urban deprivation supported a Thematic Partnership on Urban Poverty by highlighting good 
practices on energy poverty, community building, and integrated neighbourhood regeneration. 
Ongoing URBACT networks continue to focus on social inclusion, including projects involving 
disadvantaged students. 

A  Thematic  Partnership  on  Cities  of  Equality  under  the  Urban  Agenda  for  the  EU, 
launched in 2024, brings together local, regional, and national authorities with the Commission 
and European networks. It focuses on equality and social inclusion challenges in cities, with a 
special emphasis on tackling spatial segregation, ensuring fair access to services, and fostering 
participatory governance. 

The  Commission  and  the  OECD  have  launched  a  two-year  project,  “What  Works  for 
Inclusive  Growth  in  Cities:  A  Compendium”  (2024–2026).  The  project  intends  to  gather 
good practices across policy areas and produce a toolkit to promote inclusive growth in cities. 

158 

 
 
The project will also be accompanied by three case studies reports, one of which focuses on 
cities supporting people at risk of poverty and social exclusion with targeted recommendations 
on policy, funding and governance. 

Spotlight on Italy 

From  2017  to  2020,  the  Urban  Innovative  Action  funded  project  CO-City,  led  by  the 
Municipality  of  Turin  ,  promoted  the  collaborative  management  of  urban  commons  to 
counteract poverty and socio-spatial polarisation. The project was supported by ERDF under 
the Urban Innovative Actions 2014-2020 initiative with a budget of EUR 4.1 million. 

Through  "Pacts  of  collaboration",  enabled  by  a  change  in  the  local  legislation  on  the 
management of urban commons, the city and the residents built co-designed a series projects 
making  use  of  under-utilised  public  spaces  and  assets  to  regenerate  the  deprived 
neighbourhoods, combat social exclusion, and trigger a process of sustainable development. 
One of these projects was the network of Neighbourhood Houses, which act not only as a 
one-stop shop to provide social, cultural and community services but also as spaces to help 
local organisations, including social enterprises.   

These pacts created vibrant places for community welfare services, social, cultural and sport 
programmes  or  youth  involvement,  fostering  opportunities  for  community  empowerment, 
and social inclusion.  

The experience of Turin was transferred to other cities across the EU through the URBACT 
innovation transfer network. 

•  Next steps 

Under  the  next  multiannual  financial  framework,  the  Commission  will  set  up  an  EU  Cities 
platform,  bringing  together  different  forms  of  support,  such  as  advisory  for  funding  and 
financing,  capacity building  and  technical  assistance, knowledge resources and digital tools. 
The platform will provide cities from all sizes with simplified access to EU resources, including 
in the area of social inclusion and equality. 

4.2.3.3.2. Rural development policy  

Addressing poverty in rural areas is essential to ensure social and territorial cohesion and 
to prevent the widening of inequalities between urban and rural populations. Integrated 
rural strategies that address the drivers of rural poverty – including economic structures based 
on  low-income  sectors,  limited  access  to  high  quality  education,  healthcare  and  essential 
services and a growing ageing population, have shown significant potential and can be further 
promoted. 

Furthermore, a specific focus on enhancing social protection for farmers is key. As self-
employed workers, farmers face income volatility, long working lives, and structural barriers 
to accumulating sufficient PRSI (Pay-Related Social Insurance) contributions. Current pension 
and means-testing rules often penalise farmers for holding illiquid land assets, leaving many 
“asset-rich but cash-poor” and excluded from adequate retirement income, despite a lifetime of 

159 

 
 
 
work. This  not  only  undermines dignity  and security in  old  age but  also discourages timely 
retirement, blocking farm succession and generational renewal. Given farmers’ essential role 
in maintaining national food security, rural livelihoods, and land stewardship, a strengthened 
social  protection  framework  is  necessary  to  ensure  fairness  and  sustainability  in  the  food 
system. 

•  EU instruments in place 

The  2021  Commission  Communication  on  the  Long-Term  Vision  for  the  EU’s  Rural 
Areas437  sets out a shared ambition for rural regions by 2040. The issue of poverty and social 
exclusion cuts across the pillars of the Vision. It provides for an ambitious Rural Action Plan 
and a Rural Pact to reach those objectives. 

Spotlight on the Netherlands 

Member States are taking action to implement the Long-Term vision for EU’s rural areas, 
notably  through  the  set  up  and  implementation  of  national  rural  strategies.  The  Dutch 
Ministry of Agriculture, Fisheries and Food Security has committed to further support the 
policy development for rural areas, engaged in a rural policy review with the OECD, and also 
supports the Dutch Rural Pact initiative. 

This  first Rural Action Plan438 (report in  2024439), brings together actions  from  across the 
different  EU  policies  to  improve  the  well-being  of  rural  communities.  It  focuses  on  among 
others  improving  access  to  education  and  training  opportunities,  services,  promoting 
sustainable mobility, and advancing equality and inclusion. 

The  2025  Commission’s  Communication  on  the  Vision  for  Agriculture  and  Food440 
announced an update of the Rural Action Plan. 

The Common Agricultural Policy (CAP) provides a flexible framework that allows Member 
States to respond to the diverse challenges faced by rural and farming communities, including 
poverty and social exclusion.  

The CAP can contribute to these goals through several rural development interventions: 

• 

Investments  in  small-scale  infrastructure  to  enhance  access  to  services  such  as 
healthcare, education, and mobility, thereby enhancing living conditions in rural areas; 

437 European Commission, Rural Vision, Home - Rural Vision - European Union. 
438  European  Commission,  Action  Plan  –  Long-term  Vision  for  Rural  Areas,  Rural  Vision,  https://rural-
vision.europa.eu/action-plan_en 
439 European Commission, The long-term vision for the EU’s rural areas: key achievements and ways forward, 
Brussels, 27 March, 2024, The long-term vision for the EU’s rural areas: key achievements and ways forward, 
440  European  Commission,  Vision  for  agriculture  and  food,  https://agriculture.ec.europa.eu/overview-vision-
agriculture-food/vision-agriculture-and-food_en 

160 

 
 
 
 
•  Cooperation  and  community-led  local  development  approaches,  including  LEADER 
and Smart  villages  strategies, which  empower local  groups to  design  and implement 
solutions tailored to their local needs; 

•  Support for business creation and installation aid, encouraging entrepreneurship and job 

creation in rural areas, which are key drivers for reducing poverty in rural areas. 

•  Support for small and family farms through targeted tools such as the Complementary 
Redistributive Income Support for Sustainability as well as measures aimed at fostering 
the business development of small farms.   

These interventions can be planned by Member States, in the National CAP Strategic Plans, 
according to identified relevant poverty needs. 

•  Next steps 

The  2025  Commission’s  Communication  on  the  Vision  for  Agriculture  and  Food441 
committed to update this Rural Action Plan. 

4.2.3.3.3. Outermost regions 
The outermost regions442 suffer, on average, from the EU’s highest levels of poverty, illiteracy, 
unemployment,  young  people  not  in  employment,  education,  or  training  (NEETs),  and  the 
lowest levels of educational attainment. Many people in some of these regions lack clean water, 
decent housing, electricity, education, healthcare, public transport, and internet. Together, these 
factors reinforce the persistent development gap between the outermost regions, their mainland 
counterparts,  requiring  dedicated  actions  to  be  undertaken.  This  was  evidenced  by  an 
independent  study443  published  by  the  Commission  in  2024,  which  recommended  specific 
investments to improve access to social housing and drinking water, particularly in the French 
outermost regions, as well on sanitation, electricity, cooling and heating and digital connectivity 
in these regions.  

•  EU instruments in place 

In the 2022 Strategy for the outermost regions444, the Commission pledged to support these 
regions in implementing the European Pillar of Social Rights, actions to reduce social exclusion 
through ESF+, and monitor the social inclusion strategies (e.g. access to essential services) in 
these regions. The Commission supports synergies between national and EU funds to promote 
social inclusion, and improve employment opportunities and living conditions in the outermost 

441  European  Commission,  Vision  for  agriculture  and  food,  https://agriculture.ec.europa.eu/overview-vision-
agriculture-food/vision-agriculture-and-food_en 
442 The European Union (EU) includes nine outermost regions, which are geographically remote from the European 
continent. These are French Guiana, Guadeloupe, Martinique, Mayotte, Reunion Island and Saint-Martin (France), 
Azores and Madeira (Portugal) and the Canary Islands (Spain). 
443  European  Commission:  Directorate  General  for  Regional  and  urban  Policy,  Study  on  living  conditions  and 
access to selected basic needs, Publications Office of the European Union, Luxembourg, 2024. 
444 Commission Communication COM/2022/198 final of 3 May 2022 on Putting People First: Securing Sustainable 
and Inclusive Growth and Unlocking the Potential of the EU’s Outermost Regions. 

161 

 
 
 
regions. The Commission also monitors progress on poverty reduction and how the national 
action plans for the European Child Guarantee address the outermost regions. 

Spotlight on Portugal 

In 2021, Madeira introduced its Regional Strategy for Social Inclusion and the Fight against 
Poverty  2021-2027  as  a  cohesive  framework  for  social  inclusion  policies.  Following  the 
National Strategy to Combat Poverty, this was extended to 2030. An initial 2021-2024 action 
plan  featured  130  measures  across  five  key  areas:  strengthening  social  inclusion  policies, 
improving healthcare access for vulnerable populations, enhancing educational opportunities 
for  children  and  youth,  investing  in  employment  and  professional  training,  and  gathering 
information to analyse Madeira's social landscape.445 

•  Next steps 

The root causes of poverty in the outermost regions will be considered in the new Strategy for 
the  Outermost  Regions  planned  for  2026,  which  will  be  accompanied  by  a  regulatory 
simplification package that will target the main regulatory bottlenecks these regions face. 

445 Idem. 

162 

 
 
 
 
 
 
 
5.  Supporting the implementation of the EU Anti-
Poverty Strategy in Member States 
Tackling poverty and social exclusion is primarily a responsibility of Member States and 
of  regional  and  local  authorities.  Effective  action  typically  requires  coordination  across 
governance levels  and policy areas. Local  actors are often best  placed to  identify needs and 
reach people in vulnerable situations, while national authorities provide the policy framework, 
funding and the capacity to scale up successful approaches. This section of the Staff Working 
Document provides an overview how the EU supports EU Member States, in particular through 
guidance and funding.  

5.1. Guidance 

5.1.1.  Key  dimensions  of  effective  policies  at  national  and  local  levels 
frameworks  
The EU Anti-Poverty Strategy is accompanied by a Guidance document Principles for effective 
the 
anti-poverty  policies 
comprehensiveness  and  coherence  of  their  own  national  frameworks  with  respect  to  Union 
targets and ambitions.446.  

local  authorities  assess 

to  help  national, 

regional  and 

The Principles are based on the need for national policies relevant for poverty reduction and 
social inclusion to be developed, on the basis of an analysis of challenges, and implemented, 
where  relevant,  across  different  sectors  and  levels  of  government  with  a  high  degree  of 
coordination, cross-reinforcement and complementarity for them to be truly effective. Poverty 
and social exclusion are multidimensional and may be driven by a combination of low income, 
weak labour-market attachment, inadequate access to services, territorial disparities and other 
barriers, such as discrimination, stigma or health conditions. Addressing these factors requires 
coherent  action  across  policy  areas  and  sustained  implementation  over  time.  This  relates  to 
horizontal  conditions  (strong  governance,  coordination  and  monitoring  systems,  as  well  as 
effective access to social rights and respect for fundamental rights), as well as ensuring an active 
inclusion approach (combining adequate income support, inclusive labour markets and access 
to quality services), and adopting a person-centred and life-cycle perspective, recognising that 
individuals and households may face multiple and intersecting disadvantages. Together, these 
elements support a shift from isolated interventions to coherent systems that prevent poverty, 
support exits from poverty and reduce its persistence.447 

The Principles were inspired by the existing strategies described below and aims to support 
upwards social cohesion. 

446 Commission Staff Working Document SWD/2026/771 final on Principles for Effective Anti-Poverty Policies: 
Supporting National, Regional and Local Authorities in Their Fight Against Poverty. 
447  See  for  instance  European  Commission:  Directorate-General  for  Employment,  Social  Affairs  and 
Inclusion, Employment and social developments in Europe 2025, https://data.europa.eu/doi/10.2767/9505984 and 
Employment and Social Developments in Europe 2024 –. 

163 

 
 
 
22 Member States have put in place specific national Anti-Poverty Strategies. While most 
of the strategies are developed at the national level, Greece, France, Portugal, Belgium and Italy 
also adopted regional Anti-Poverty Strategies (the latter two also have strategies at the regional 
or  community  level).  Luxembourg,  for  example,  has  adopted  the  National  Plan  for  the 
Prevention and Reduction of Poverty in December 2025, covering the following areas: access 
to rights and social services, social assistance and cash benefits, housing and energy, health and 
social security, education and childhood, lifelong learning and training, employment activation 
and labour market integration, social cohesion. Government actors, social partners, civil society 
organisations, research institutions and people experiencing poverty were directly consulted.  

The national Anti-Poverty Strategies across the EU cover a wide range of policy areas. 
Among those, employment and activation (18 Member States), housing (16), social protection 
(15), education and training (12), health including mental health and access to healthcare (13) 
and social services (10) are the most prominent ones. Most countries follow a cross-sectoral 
policy  approach  to  reducing  poverty,  mainstreaming  anti-poverty  measures  across  multiple 
sectors. 

In all Member States, the national Anti-Poverty Strategy is led by the Ministry for Social 
Affairs/Policy, Employment, or Solidarity or corresponding agencies/institutions.  In the 
majority of Member States, other ministries participate in the coordination of the strategies as 
well, such as the ministries for health, children, education, economy, finance, interior, justice, 
infrastructure,  agriculture  and  regional  development.  Inter-ministerial  commissions  or 
committees carry out the coordination across ministries in France, Hungary, Portugal and Spain. 
Moreover, regional and local authorities such as municipalities and community centres have a 
coordinating role in many Member States. For instance, in France, each region has a coordinator 
and in  Italy, the “Unified Conference” of national, regional and local governments manages 
and approves the plans. Other bodies involved in the coordination of the strategies are social 
service providers, public employment services, NGOs and research institutes. 

Regional  and  local  authorities  play  a  central  role  in  the  governance  of  national  Anti-
Poverty Strategies across the EU. The vast majority of Member States involve regional and 
local authorities by consulting them for the development and design of the strategy. They also 
act as key implementers. In the Netherlands, for example, municipalities and their associations 
hold  major  implementation  responsibilities  regarding  minimum  income  policies,  debt 
assistance, early warning, and the provision of local services. In Ireland and Portugal, regional 
and  local  administrations  additionally  contribute  to  the  impact  assessment,  monitoring  and 
evaluation of strategies. 

The  formulation  and  implementation  of  NAPSs  across  Member  States  involve  diverse 
stakeholders  at  all  levels  of  governance.  At  least  14  Member  States  have  a  dedicated 
committee or working group to guide the development, monitor implementation, and advise on 
strategies.  Committees typically include inter-ministerial representatives, social partners and 
civil society. For instance, in Malta a “Poverty Reduction and Social Inclusion Implementation 
Group”, chaired by the Ministry for Social Policy and Children’s Rights, is planned under the 
framework of the NAPS, comprising other supporting ministries responsible for the provision 
164 

 
 
of  relevant  benefits  and  services,  as  well  as  of  a  mechanism  for  collaboration  between  the 
government and civil society. However, only in some Member States dedicated arrangements 
are  in  place  to  ensure  local  authorities  and  stakeholders  have  the  capacity,  autonomy,  and 
accountability  needed  to  deliver  on  the  NAPS.  For  instance,  in  Italy,  municipalities  have 
defined implementing responsibilities and are primarily accountable for the provision of social 
services on the ground and managing the use of national funds. 

Most Member States conduct consultations to inform the drafting of their Strategies, often 
targeting stakeholders in the social sector, and in some cases open for inputs from the public. 
In  all  Member  States,  civil  society  organisations,  especially  those  that  represent  groups  in 
vulnerable situations identified and prioritised by NAPs, were involved in the drafting process, 
but in some countries, they signalled lack of access to policymakers and to opportunities for 
input, for instance in France and Hungary. In 13 Member States, civil society organisations and 
non-governmental  organisations  act  as  implementing  partners  of  NAPs.  Belgium,  Italy,  the 
Netherlands and Slovakia also consulted directly people experiencing poverty. Social partners 
are recognised as key stakeholders in the development and implementation of NAPs in at least 
15  Member  States.  Regional  and  local  authorities  are  a  key  partner  across  Member  States, 
especially in the implementation and monitoring, with at least 16 indicating them as operational 
partners alongside national ministries and agencies. Finally, academia and research institutions 
contribute mostly at the preparation level, but in a few cases, support the monitoring process as 
well. 

All Member States have defined concrete targets and objectives. All Member States have 
set national poverty reduction targets to contribute to the EU headline target set by the Action 
Plan for the implementation of the European Pillar of Social Rights to reduce the number of 
persons  at  risk  of  poverty  or  social  exclusion  (AROPE)  by  at  least  15  million  by  2030  in 
comparison to 2019. Moreover, 21 Member States448 have also set national targets  for child 
poverty reduction, in line with the EU complementary target of a reduction of at least 5 million 
children out of the 15 million. In their NAPSs, a majority of Member States set a target on the 
reduction of the AROPE rate, some of them explicitly by 2030, in line with the EPSR Action 
Plan, albeit with important variation when it comes to how these targets are set. Some strategies 
outline targets for specific groups, such as child poverty (in at least 9 Member States), youth, 
the working poor, older peoples, Roma people and persons with disability. While most Member 
States focus on outcome indicators, some have specific targets related to the provision of social 
benefits  and  services.  For  instance,  the  French  NAPS  sets  out  precise  targets  on  number  of 
beneficiaries to be reached – e.g. 20.000 pupils benefitting from the programme “Cantine à 1€” 
- and the Croatian NAP on raising minimum pension levels. 

Progress  is  monitored  against  specified  targets  by  implementing  authorities,  through 
dedicated  mechanisms  such  as  regular  reports  (like  in  Estonia,  Lithuania,  the  Netherlands, 
Portugal and Romania), information systems, databases or dashboards (like in Italy). In at least 

448 Denmark, Italy, Lithuania, Latvia, Hungary and the Netherlands have not set complementary national targets 
for child poverty reduction. 

165 

 
 
 
15 Member States, the NAP is subject to a formal evaluation process, which takes the form of 
a  final  evaluation,  and  in  some  cases  of  a  mid-term  review  as  well.  In  8  Member  States, 
evaluations  of  the  implementation  of  their  national  strategies  have  been  made  publicly 
available. Evaluations play a vital role in ensuring efficacy of identified actions and guiding 
corrective adjustments wherever needed. For instance, Ireland conducts regular reviews of their 
own  implementation,  assessing  the  impact  of  enacted  policies  against  pre-defined  outcome 
targets, with a view of adapting the Strategy around observed results. Most NAPs (15) have an 
associated  timeline  for  implementation,  often  aligning  with  the  time  horizon  of  the  ESPR 
Action Plan and of the UN Sustainable Development goals, meaning that their end date is 2030 
(7 NAPs). 

Only in a minority of Member States the implementation of activities under the NAPS is 
supported  by  a  dedicated  budget,  with  only  5  of  them  allocating  resources  to  its 
implementation, and even in these few cases, financing is often mobilised from pre-existing 
sources  in  the  state  budgets,  as  opposed  to  new  allocations.  Several  Member  States  plan  to 
mobilise of both national and European funding – particularly the ESF+ which is mentioned in 
12 NAPs, the Recovery and Resilience Facility and the Cohesion Fund. European funding plays 
a  key  role  in  most  Member  States,  especially  when  it  comes  to  financing  the  provision  of 
services at local level, as well as piloting innovative solutions in the area of social and labour 
market  integration,  for  instance  education  and  training  for  the  most  vulnerable,  such  as  in 
Belgium, Finland, Croatia, Italy, and Slovakia. 

5.1.2. Remaining challenges in the Member States 

For  each  Member  State,  three  main  structural  challenges  and  drivers  of  poverty  and 
social exclusion can be identified. The analysis builds on the Social Protection Performance 
Monitor (SPPM) as the  main analytical  starting point to  identify key challenges in  Member 
States. It focuses on the SPPM “key social challenges” flagged in the annual SPPM assessment 
in the SPC annual report, from the years 2021 to 2025. The 2021 exercise was indeed the first 
to  use  2019  data  as  the  baseline,  aligned  with  the  poverty  headline  target  reference  year.  A 
challenge is considered persistent when it is flagged three times or more over the period covered 
by  the  SPPM  exercises  (2021–2025).  This  systematic  screening  has  been  complemented  by 
evidence from the European Semester Country Reports, relevant thematic work (including on 
minimum income, pensions, health and long-term care) and Member State expertise, to ensure 
an  accurate  interpretation  of  country-specific  contexts  and  recent  developments.  In  several 
Member States, more than three significant poverty-related challenges could be identified. In 
such  cases,  a  prioritisation  exercise  was  carried  out  to  determine  the  three  most  relevant 
challenges. This exercise considered both the scale and the severity of the challenge, including, 
where relevant, the share of persons at risk of poverty or social exclusion within specific groups 
concerned. Challenges were also grouped where they were closely interrelated and formed part 
of the same underlying poverty dynamic. 

Across  Member  States,  these  persistent  challenges  cluster  around  several  recurring 
drivers of poverty and social exclusion. 

166 

 
 
•  Weak labour market attachment remains a major driver of poverty in many as 
well as in-work poverty and low job quality (in around two thirds of Member States). 
It is reflected in high poverty risks among people living in (quasi-)jobless or very low 
work  intensity  households,  as  well  as  among  long-term  unemployed  and  inactive 
people. In some countries, poverty persists despite improving employment, pointing to 
barriers  affecting specific groups—such as single parents,  older working-age people, 
persons with disabilities, and those people with a migrant background—and to the need 
for stronger activation and enabling supports. Low wages, involuntary part-time work, 
precarious employment and limited access to training can prevent people in employment 
from  escaping  poverty,  particularly  among  low-skilled  workers  and  those  in  non-
standard forms of employment. 

•  Challenges related to the effectiveness, adequacy and coverage of income support, 
including  social  transfers  and  minimum  income  schemes  and  gaps  in  social 
protection (in around two thirds of Member States). Where benefits do not sufficiently 
reduce poverty or do not reach those most in need, poverty can become deeper and more 
persistent,  such  as  during  cost-of-living  shocks.  In  several  Member  States,  gaps  in 
access  to  social  protection  for  non-standard  workers  and  the  self-employed  further 
increase vulnerability and weaken income security in case of unemployment, sickness 
or other life events. 

•  Access to services—including healthcare, long-term care, childcare, education and 
social support services—emerges as a key enabling factor for poverty reduction (in 
around half Member States). Unequal access, long waiting times, limited availabilit, and 
workforce constraints can deepen social exclusion and reduce pathways out of poverty, 
while also increasing care burdens on households. 

•  Child poverty and inequality of opportunity are persistent concerns across the EU 
(in  around  half  Member  States).  Poverty  risks  for  children  often  mirror  household 
circumstances—particularly  weak  labour  market  attachment  and  low  parental 
education—and  are  reinforced  by  unequal  access  to  affordable  childcare  and  early 
childhood  education  and  care,  educational  underachievement,  and  limited  access  to 
essential services. This can contribute to intergenerational transmission of poverty and 
long-term exclusion. 

•  Old-age poverty and pension adequacy are structural challenges in a number of 
Member  States  (in  around  one  third  of  Member  States).  It  is  often  linked  to  low 
replacement rates, insufficient pension adequacy and gender gaps in pension outcomes. 
These  risks  can  be  compounded  by  limited  access  to  affordable  long-term  care  and 
healthcare,  increasing  out-of-pocket  costs  and  dependency,  particularly  for  older 
women and people living alone. 

•  Cost-of-living  pressures  and  affordability  of  basic  needs,  notably  housing  and 
energy, increasingly shape poverty risks across Member States (in around one third 
of Member States). High housing costs, housing deprivation and  energy  poverty can 
push  households  into  hardship  even  where  incomes  are  relatively  stable,  and  these 
pressures are often more severe for renters and low-income households. 

167 

 
 
•  Across these drivers, certain groups face a persistently higher risk of poverty and 
social exclusion, including persons with disabilities, Roma, people born outside the 
EU and single parent households. These groups often face multiple and intersecting 
barriers, including discrimination, lower access to employment and services and higher 
exposure to precarious living conditions (in around two thirds of Member States). 
•  Territorial disparities, including regional divides, urban-rural gaps and pockets of 
concentrated deprivation, remain significant in several Member States (in around 
one  third  of  them).  Uneven  access  to  jobs,  services  and  infrastructure  can  reinforce 
persistent  poverty  and  exclusion  in  specific  territories,  including  in  remote  and  rural 
areas, and in some cases in outermost regions. 

5.1.3. European Semester 

Economic policy plays a central role in preventing and reducing poverty by promoting 
inclusive,  sustainable,  and  resilient  growth  that  creates  quality  employment  and 
strengthens  social  cohesion.  Sound  macroeconomic  governance  provides  the  fiscal  space 
needed to finance productive investments and social spending in education, healthcare, housing, 
and active labour market policies—key enablers of social inclusion and upward convergence. 

Evidence-based policymaking is crucial for ensuring successful policies and the credibility 
of policy actions. Impact assessments allow to make informed policy choices and distributional 
impact  assessments  help  understand  how  they  are  likely  to  affect  different  parts  of  the 
population. This is especially relevant as the EU and its Member States strive for socially fair 
digital and green transitions and face challenges related to the rising cost of living. 

The  European  Semester  is  the  EU's  annual  cycle  for  coordinating  economic,  fiscal,  and 
employment policies, ensuring national plans align with EU-level goals for growth, stability, 
and jobs, driven by the Commission's analysis and culminating in Council-adopted Country-
Specific  Recommendations  (CSRs)  under  Articles  121  and  148  TFEU.  It  harmonises 
procedures,  monitors  reforms,  and  provides  policy  guidance,  evolving  to  include  social  and 
environmental dimensions, especially with the European Pillar of Social Rights. In the various 
cycles, the Semester process has also highlighted social issues and gaps in the national social 
protection systems, recommending appropriate actions to the Member States. In the last two 
Semester cycles, more than one third of Member States received each year a CSR related to 
poverty. As examples of policy action taken further to Semester CSRs, reforms of the minimum 
income  schemes  were  adopted  in  Italy,  Spain,  Croatia,  Bulgaria  and  Romania,  which 
contributed to the reduction of AROPE levels in those countries. 

As part of its integrated analysis of employment and social developments in the context of the 
European Semester, the Commission assesses risks to upward social convergence in Member 
States and monitors progress on the implementation of the principles of the European Pillar of 
Social  Rights  on  the  basis  of  the  Social  Scoreboard  and  of  the  principles  of  the  Social 
Convergence Framework. Further to multilateral review of the Commission’s assessment, the 
results of this process are included in the annual CSRs as relevant. 

168 

 
 
The reform of the Economic Governance Framework aims to ensure sound and sustainable 
public  finances,  while  strengthening  social  and  economic  resilience  through  reforms  and 
investment.  To  encourage  structural  reforms  and  public  investments,  Member  States  are 
allowed to ask for an extension of the four-year fiscal adjustment period to maximum seven 
years,  if  they  carry  out  certain  reforms  and  investments  that  improve  resilience  and  growth 
potential, support fiscal sustainability and address common priorities of the EU. The common 
priorities,  identified  in  the  Regulation  are  a  fair,  green  and  digital  transition,  including  the 
climate objectives, strengthening social and economic resilience, including the European Pillar 
of Social Rights, energy security and, where necessary, building-up of defence capabilities. 

In the context of the Social Open Method of Coordination, the Social Protection Performance 
Monitor Vertical Assessment is an annual exercise to determine key social challenges (KSCs) 
and good social outcomes (GSOs) in each Member State. It is based on a list of the most relevant 
Joint Assessment Framework indicators as determined by the Indicator Sub-Group of the Social 
Protection Committee, as well as findings emerging from other sources in some specific branch 
of social protection systems “non-JAF analysis”). The results are published and endorsed by 
the Council with the SPC annual report. 

169 

 
 
 
 
5.2. EU funding 

EU funding plays and will continue to play a role in helping Member States prevent and 
reduce  poverty,  promote  social  inclusion  and  reinforce  social  protection  systems.  The 
European  Commission’s  proposal  for  a  Multi-Annual  Financial  Framework  (MFF)  sets  out 
nearly  EUR  2  trillion  to  support  Europe’s  long-term  independence,  prosperity,  security  and 
growth. The MFF unifies EU funds under a coherent strategy implemented through National 
and Regional Partnership Plans. At least 14% of the envelope for the National and Regional 
Partnership Plans will be dedicated to meeting the EU’s social objectives. 

The European Social Fund Plus (ESF+) is the EU’s main instrument for investing in people 
and implementing the European Pillar of Social Rights. Combating poverty and social exclusion 
is  an  integral  part  of  this.  With  a  total  budget  of  over  EUR  139  billion  for  the  2021–2027 
programming period (over EUR 94 billion from the EU budget), it supports Member States in 
breaking cycles of disadvantage, promoting equal opportunities and fostering social inclusion 
across generations. Since the start of the current programming period, the ESF+ has seen 16.1 
million participations and 64.6 million participations under the previous programming period. 

The mid-term review of the cohesion policy programmes, which has recently been finalised, 
has allowed Member States to successfully reprogramme EUR 34.6 billion in their 2021-2027 
cohesion policy funds towards the EU's most urgent strategic priorities. This has also resulted 
in  a positive uptake in  the thematic concentration requirements of the ESF+, with  resources 
dedicated to addressing child poverty increasing by 5.4% (an additional EUR 491 million and 
material deprivation increasing by 3.5% (an additional EUR 211 million. 

All  Member  States  are  obliged  to  programme  at  least  25%  of  their  ESF+  resources  to  the 
thematic area of social inclusion. This minimum percentage is largely exceeded as Member 
States are investing over 31% of their ESF+ resources in this domain. This represents EUR 45,3 
billion. EUR 29,7 billion of resources are already committed and EUR 9,6 already spent on a 
total of over 55.000 operations. So far, this has translated into 5 million participations under 
social inclusion objectives in the current programming period. 

To contribute to the implementation of the European Child Guarantee, Member States have 
programmed 6.9% of total ESF+ resources to tackling child poverty on average again largely 
exceeding the minimum threshold of 5%449. This represents EUR 9.6 billion450. EUR 6,0 billion 
of resources are currently committed and EUR 2,2 billion already spent on a total of over 6.500 
operations. 

449 Article 7(3) ESF+ Regulation obliges all Member States to programme an “appropriate amount” of their 
ESF+ resources to tackling child poverty, and Member States that had an average rate above the Union average 
of children of less than 18 years old at risk of poverty or social exclusion for the period between 2017 and 2019, 
on the basis of Eurostat data, have to allocate at least 5 % of their ESF+ resources to this policy priority. 
450 The  Commission  can  track  the  use  of  ESF+  investments  to  address  child  poverty  via  secondary  theme  06. 
However, the use of secondary themes is not mandatory. 24 Member States use this secondary theme, while three 
do not (DK, NL, and SI). As a result, the amounts can only be considered indicative, as secondary themes reflect 
estimates planned by the Managing Authorities rather than actual budgeted amounts. 

170 

 
 
 
Moreover, Member States must also dedicate at least 3% of their ESF+ resources specifically 
to  actions  fighting  material  deprivation,  notably  through  food  aid  and  basic  material 
assistance for the most deprived. In total, 4% of the ESF+ allocation is dedicated to food and 
material  support  for  material  assistance  and  accompanying  measures  for  the  most 
disadvantaged in the EU. Member States thereby exceed the minimum threshold of 3%. This 
represents EUR 5,8 billion.  EUR 3,8 billion of resources are currently committed and EUR 1,6 
billion already spent. So far, the ESF+ has reached 31 million end recipients of food support 
and  4.1  million  end  recipients  of  material  support.  Further,  2.6  million  end  recipients  have 
benefitted from vouchers which enable the purchase of food or goods. 

The ESF is proving to be effective on the ground for the people. The ESF 2014-2020 ex-
post  evaluation  showed  that  participating  in  an  ESF  project  increased  the  probability  of 
employment by 16% compared to those who are not participating. The ESF has also improved 
the education outcomes of individuals participating in its programmes, with significant positive 
outcomes in interventions targeting students or improving grades451. Overall, the highest returns 
on  the  ESF  investments  per  participation  come  from  interventions  directly  addressing  early 
school  leaving,  employment or active inclusion, reaching  a benefit-cost  ratio of 43, 20.5, or 
16.2 respectively. 

Together with  other EU funding sources  such as the European Regional Development  Fund 
(see below), the ESF+ can also support Community-Led Local Development (CLLD) by co-
financing  strategies  that  can  address  local  employment,  skills  and  social  inclusion  needs 
through  bottom-up  action  and  support  to  social  infrastructure.  In  the  current  programming 
period, until April 2026, over 2.7 million participants to ESF+ funded operations were reached 
in rural areas (tracked under the common output indicator EECO17 – participants from rural 
areas). 

The European Regional Development Fund (ERDF) finances the infrastructure and place-
based investments to reduce economic, social and territorial disparities, creating the conditions 
for social inclusion and equal opportunities across all territories. Under Policy Objective 4 “a 
more social and inclusive Europe”, the ERDF supports investments aiming to enhance equal 
access to mainstream high-quality services, and the socioeconomic inclusion of vulnerable and 
disadvantaged  groups  like  Roma,  migrants,  and  persons  with  disabilities. As  of  April  2026, 
EUR  19,124  billion452  in  EU  amounts  (EUR  25.598  billion  with  national  co-financing)  are 
planned by Member States to finance investments in long-term and social care infrastructure, 
education and training facilities, sustainable and affordable housing, including social housing, 
childcare and early childhood education centres or community-based services for vulnerable 
and disadvantaged groups. By the end of the implementation of the programming period 67.2 
million of persons are expected to benefit from improved or new healthcare facilities, and 3.5 

451 Häpp, T.,  Meta-analysis of the European Social Fund counterfactual impact evaluations: First quantitative 
results on education outcomes, Publications Office of the European Union, Luxembourg, 2025, JRC Publications 
Repository  -  Meta-analysis  of  the  European  Social  Fund  counterfactual  impact  evaluations:  First  quantitative 
results on education outcomes 
452 Open Data Portal for the European Structural Investment Funds - European Commission | Cohesion Open Data. 
171 

 
 
 
million  of  pupils  are  expected  to  benefit  from  new  or  modernised  education  facilities453. 
Sustainable  and  affordable  housing  and  energy  efficiency  of  housing  stock  are  also  being 
supported by the ERDF through Policy Objective 2 – with a planned budget of around EUR 4.6 
billion over the period (EUR 6.2 billion including national co-financing). Additionally, through 
Policy  Objective  5,  the  ERDF  implements  integrated  territorial  development  strategies  that 
tackle poverty and exclusion in urban, rural, and coastal areas, reducing territorial disparities. 
Member States are planning to dedicate EUR 19,091 billion in EU amounts under PO5 (25.997 
billion with national co-financing). 

Interreg programmes – the EU’s instrument for cross-border, transnational and interregional 
cooperation  under  the  ERDF  –  also  contribute  to  poverty  reduction  by  supporting  projects 
improving  access  to  healthcare,  solutions  against  energy  poverty,  or  innovative  tools  for 
disadvantaged  groups  such  as  the  elderly  and  people  living  in  rural  areas,  as  well  as  the 
integration of marginalised communities and refugees. In some border regions, cooperation in 
tourism  and  culture  plays  a  particularly  strong  role  in  creating  jobs,  strengthening  local 
economies, and reducing the risk of poverty. Currently EUR 2.860 billion (EU amounts) are 
planned across programmes to support investments under PO4. 

The  Cohesion  Fund  (CF)  further  complements  the  investments  in  housing,  related  to  the 
promotion  of  energy  efficiency  or  renewable  energy  use,  including  in  affordable  and  social 
housing, with a planned budget of around EUR 2.1 billion (EUR 2.4 billion with national co-
financing). 

The  Just  Transition  Fund  (JTF)  contributes  to  a  fair  and  inclusive  transitions  to  climate 
neutrality in the territories most affected by it, with an overall budget of EUR 19.6 billion for 
the  2021-2027  programming  period.  It  supports  the  reskilling,  upskilling,  and  job-search 
assistance  for  workers,  alongside  measures  to  access  to  sustainable  and  affordable  housing, 
including social housing and energy efficiency measures contributing to reduce energy poverty. 

The Social Climate Fund (SCF) is a key EU funding instrument and the first EU fund which 
is  principally  targeted  to  supporting  vulnerable  households  tackle  energy  and  transport 
poverty.  The  Social  Climate  Fund,  which  will  be  implemented  from  2026  to  2032,  will 
mobilise over EUR 86.7 billion, out of which EUR 65 billion collected from ETS2 (and ETS1) 
resources and a 25% national contribution. Its core objective is to help vulnerable households 
address  the  social  impacts  of  the  new  Emissions  Trading  System  for  buildings  and  road 
transport (ETS2) which may trigger an increase of the price of fossil fuels used for heating of 
buildings  and  for  road  transport.  As  this  may  have  a  disproportionate  impact  on  the  most 
vulnerable, the SCF was created to mitigate that impact through tailored support measures (e.g. 
reforms)  and  investments,  as  well  as  through  direct  income  support.  Since  the  vulnerable 
households do not have the financial means to make investments leading to a decrease of fossil 
fuels  used  to  heat  their  homes  or  to  switch  to  alternative  means  of  transport,  the  SCF  will 
provide help to this end. Concretely, the SCF can support investments in renovation of buildings 

453 As of April 2026 - Open Data Portal for the European Structural Investment Funds - European Commission | 
Cohesion Open Data. 

172 

 
 
 
(insulation,  replacement  of  old,  fossil  fuels-based  heating  sources,  installation  of  renewable 
energy  sources  etc.)  and  in  accessing  clean  transport  solutions  (new  clean  public  transport 
solutions  or  access  to  electric  vehicles).  SCF  support  can  include  investments  that  help 
vulnerable households have access to essential socioeconomic services such as health, social 
services, education and employment, through on demand transport measures in remote or rural 
areas, or clean public transport. To benefit from it, Member States must submit to the European 
Commission social climate plans, designed in consultation with the relevant stakeholders, to set 
measures and investments aimed at the vulnerable households. So far, the social climate plan 
of  Sweden  was  adopted  and  the  European  Commission  is  currently  negotiating  with  the 
Member States with a view to a speedy submission and approval of their social climate plans, 
that would allow for the investments to be implemented swiftly and thus generate benefits for 
the vulnerable people. 

The Social Investment and Skills Window of InvestEU addresses social exclusion and moves 
people out of poverty. By means of an EUR 2.8 billion guarantee provisioned in the EU budget, 
which will be further increased under the ‘Omnibus’ package to simplify EU programmes, it 
increases  the  risk-bearing  capacity  of  InvestEU  Implementing  Partners  to  support  social 
investments and skills. Today, these Implementing Partners include the European Investment 
Bank, the European Investment Fund, the Council of Europe Development Bank, the European 
Bank  for  Reconstruction  and  Development  as  well  the  national  promotional  banks  Cassa 
Depositi e Prestiti in Italy, Caisse des Dépôts et Consignations in France, Instituto de Credito 
Oficial and Bank Gospodarstwa Krajowego in Poland. Together, these Implementing Partners 
play  a  central  role  in  the  European  Union’s  fight  against  poverty  and  social  exclusion, 
supporting  job  creation,  entrepreneurship,  social  innovation  and  economic  integration  for 
vulnerable groups. Under this architecture, InvestEU facilitates the granting of microcredits and 
access to finance by social enterprises. Notably by providing microcredits to people who lack 
access  to  traditional  banking,  individuals  are  enabled  to  start  or  expand  small  businesses, 
generate income, and strengthen their financial independence. This support is instrumental in 
reducing poverty and promoting social inclusion by supporting entrepreneurship among groups 
in  vulnerable  situations.  To  date,  InvestEU  supported  around  116,900  microenterprises  and 
around  4,200  social  enterprises.  In  addition,  InvestEU  facilitates  access  to  affordable  social 
housing and other areas of social infrastructure. Again, this activity contributes to addressing 
social exclusion, enabling vulnerable groups  to  participate fully in  society and in  the labour 
market.  To  date,  InvestEU  supported  the  construction  and  renovation  of  13,400  social  and 
affordable housing units, potentially benefiting around 46,000 individuals across the EU. 

The Recovery and Resilience Facility (RRF) seeks to reduce economic inequalities through 
reforms  and  investments  that  strengthen  labour  market  participation,  promote  up-  and  re-
skilling, and expand access to sustainable and affordable housing. Across social policy fields 
supported by the RRF, the combined estimated  cost  of reforms  and investments  amounts to 
EUR 163.9 billion, or roughly one-quarter of total RRF funding. 

Technical  Support  Instrument  (TSI)  provides  on-demand  technical  assistance  to  Member 
States for the design and implementation of reforms in social assistance and social protection 

173 

 
 
systems. Its objective is to strengthen social inclusion, modernise welfare systems and support 
efforts to combat poverty and inequality.454 

The Erasmus+ programme, with a budget of EUR 26.5 billion for 2021-2027455, prioritises 
social inclusion, improving access for people with fewer opportunities in education, training, 
youth,  and  sport.  It  includes  dedicated  inclusion  measures.456  The  programme’s  bottom-up 
design  ensures  that  disadvantaged  groups  benefit  from  financial  mechanisms,  enhancing 
participation.  In  sport,  Erasmus+  promotes  social  inclusion  targeting  in  particular  grassroot 
sport  organisations  and  disadvantaged  groups,  while  youth  initiatives  like  DiscoverEU 
Inclusion Action help marginalised young people participate in DiscoverEU, giving them the 
chance  to  learn  about  Europe  and  gain  life  skills  and  competences.  Since  2021,  more  than 
14.000 cooperation projects in the education and training, youth and sport fields have advanced 
social  inclusion  efforts,  leveraging  around  EUR  3  billion  in  contracted  grants.  The  Justice 
Programme (running from 2021 to 2027 with a budget of EUR 305 million) provides support 
and funds projects aiming to facilitate effective and non-discriminatory access to justice for all, 
including children, and effective redress.457 The indicative Justice programme budget for the 
2028-2034 MFF programming period is set at EUR 798 million. 

The  Citizens,  Equality,  Rights  and  Values  (CERV)  programme  contributes  indirectly  to 
addressing poverty and social exclusion by promoting equality, non-discrimination, access to 
rights and civic participation across the EU. It supports civil society organisations and other 
stakeholders working with groups affected by poverty and social exclusion, including women, 
older  persons,  children,  persons  with  disabilities,  Roma,  LGBTIQ  persons  and  other  groups 
affected by racism and marginalisation.  

The  Citizens,  Equality,  Rights  and  Values  (CERV)  Programme,  specifically  through  its 
DAPHNE strand, addresses gender-based violence (GBV) and violence against children 
(VAC), including links to poverty, through a holistic, rights-based, and intersectional approach, 
addressing socioeconomic disparities alongside gender and age-specific vulnerabilities. 

The EU4Health Programme, with a budget of EUR 4.6 billion and implemented through 
annual work programmes, is the main financial instrument to fund the European Union health 
initiatives. It brings an EU added value and complements the policies of the Member States and 

454  TSI  examples  include:  Developing  structural  tools  to  support  the  implementation  of  the  European  Child 
Guarantee in Portugal - Reforms and Investments, Development of performance-based vocational education and 
training funding - Reforms and Investments , Making higher education in Portugal more inclusive - Reforms and 
Investments. 
455  The  programme  also  has  an  additional  indicative  envelope  of  EUR  2.2  billion  allocated  from  External 
Cooperation Instruments (IPA III and NDICI-Global Europe), which complements the EUR 26.5 billion heading 
2 budget. 
456  Such  as  targeted  communication  and  easier-to-access  activity  formats,  as  well  as  dedicated  financial 
mechanisms such as inclusion support for organisations, inclusion support for participants and the top-up amount 
to  the  individual  support  for  long-term  mobility  for  students  and  recent  graduates  with  fewer  opportunities  in 
higher education. 
457  Including  by  electronic  means  (e-Justice),  by  promoting  efficient  civil,  and  criminal  procedures,  and  by 
promoting and supporting the rights of all victims of crime as well as the procedural rights of suspects and accused 
persons in criminal proceedings. 

174 

 
 
 
associated countries to strengthen the resilience of health systems, improve and foster people’s 
health, promote innovation in the health sector and enhance health crisis preparedness. 

The  Common  Agricultural  Policy  (CAP)  contributes  to  poverty  alleviation  and  supports 
disadvantaged groups in rural areas across the EU. By allowing Member States to design locally 
tailored interventions, it supports small-scale rural infrastructure investments, community-led 
approaches  like  LEADER  and  cooperation,  enhancing  rural  services  and  bolstering  local 
economies. It provides direct aid to small, family and young farmers, especially those facing 
natural constraints, through initiatives like the Complementary Redistributive Income Support 
for Sustainability (CRISS) and the Small Farmers Scheme, which reinforce income support. 
Targeted  payments  help  maintain  agricultural  activities,  preventing  land  abandonment  and 
supporting small and medium-sized farms. By stabilizing farmer incomes and ensuring food 
production,  the  CAP  reduces  vulnerability  to  price  fluctuations,  contributing  to  food 
affordability and long-term poverty reduction in rural regions. In addition to enhancing the EU 
school  scheme’s  complementarity  and  synergy  with  other  instruments  at  EU,  national,  and 
regional  levels,  the  proposal  for  the  next  Multiannual  Financial  Framework  introduces  the 
possibility  for  Member  States  to  prioritise  certain  groups  of  children  according  to 
socioeconomic considerations recognising that children from vulnerable groups are more prone 
to have unhealthy diets. 

The Asylum, Migration and Integration fund (AMIF) supports integration measures, with a 
focus on early integration of non-EU country nationals, complementing other EU funds, such 
as  the  ESF+  and  ERDF,  in  areas  such  as  access  to  housing,  health  services,  employment, 
education and in particular supporting the establishment of reception centres for asylum seekers 
and the provision of early integration services or language training to non-EU country nationals. 
Within the AMIF global envelope of EUR 11 billion for the 2021-2027 period, Member States’ 
have earmarked a significant part of their national programmes to the integration of  non-EU 
country nationals (EUR 1.7 billion for the 2021-2027 period)458. Through the AMIF Thematic 
Facility,  the  Commission  has  been  allocating  funds  (EUR  78.5  million  so  far)459  for 
transnational projects on integration and inclusion as well as children in migration. 

The  Connecting  Europe  Facility  (CEF)  supports  connectivity  projects  –  either  highly 
innovative  projects  or  projects  with  strong  cross  border  impact.  Many  of  these  projects 
explicitly  target  remote,  sparsely  populated,  or  underserved  areas,  directly  contributing  to 
bridging the rural-urban divide and indirectly economic and social divides. 

458 The figures are updated at cut-off date of 20/04/2026. 
459 The figures are updated at cut-off date of 20/04/2026. 

175 

 
 
 
 
 
Focus on the contribution of the European Investment Bank (EIB) Group 

Through targeted and sustained social investment,  such as in  education, healthcare, social 
and affordable housing, care infrastructure and resilient public services, including to micro-
enterprises and underserved groups through the European Investment Fund, the EIB Group 
helps  address  structural  barriers  that  can  trap  individuals  and  communities  in  cycles  of 
disadvantage. These investments directly contribute to preventing poverty by mitigating risk 
of exclusion and strengthening long-term resilience, while at the same time strengthening the 
EU’s competitiveness and security. 

As an example, through Commission programmes such as EPMF, EaSI and InvestEU, the 
EIF  implemented  portfolio  guarantees  and  debt  solutions  that  generated  tangible  social 
impact, expecting to mobilize over the past 15 years close to EUR 16 billion and benefiting 
more than 350,000 entrepreneurs and helping create or safeguard over one million jobs. 
In 2025, the EIB Group invested more than EUR 9.5 billion in social infrastructure within 
the EU. This included EUR 3 billion for education and EUR 1.3 billion for health, supporting 
universal  access  to  high-quality  services,  improved  well-being  and  a  more  productive 
workforce. 

The  strong  expansion  of  inclusive  finance  in  Europe  over  the  past  decade,  notably  in 
microfinance460  and  social  entrepreneurship  finance,  has  been  underpinned  by  EU-level 
central  financial instruments461  aimed at improving access to finance for a wide range of 
including  social  enterprises,  cooperatives  and 
vulnerable,  excluded  entrepreneurs, 
non-governmental organisations providing services to  underserved and vulnerable groups, 
but  also  rural  entrepreneurs,  Roma  communities,  migrants  and  refugees,  low-income 
households, people experiencing homelessness and small farmers across Member States. 

The EIB  Group will continue to  play a pivotal  role in  reducing  poverty across Europe by 
catalysing investment in education, health and social infrastructure—sectors that are essential 
to breaking cycles of deprivation and expanding access to opportunity. 

460  The  most  recent  Microfinance  Market  Survey,  issued  jointly  by  the  European  Microfinance  Network  and 
Microfinance Centre in February 2026, reports the size of the European microfinance market at around €6.3 billion 
in 2024. 
461 European Progress Microfinance Facility (2010-2014); Employment and Social Innovation (2015-2020); Social 
Investments and Skills Window of the InvestEU Fund (2022-2027). 

176 

 
 
 
 
 
 
 
 
 
 
 
 
 
Under the next Multiannual Financial Framework, as part of the  National and Regional 
Partnership  Plans  (NRPP),  the  ESF  will  remain  the  main  instrument  to  promote  and 
strengthen social cohesion, investing in Europe’s people, their future and preparedness. It will 
contribute  promoting  equal  opportunities  for  all,  to  support  strong  social  safety  nets,  foster 
social inclusion, intergenerational fairness and fight poverty. 

According to its dedicated regulation, the ESF will contribute to:    

•  supporting quality jobs and labour mobility,    

• 

• 

improving education, training, and lifelong acquisition of skills,     

fighting poverty and homelessness,   

•  promoting social inclusion and equality,   

•  addressing material deprivation,    

•  developing social infrastructure.    

At least 14 % of the financial envelope of the NRP Plans (including loan support but excluding 
direct payments under the CAP and excluding Social Climate Fund budget) will be dedicated 
to social objectives. This ensures a minimum level of support for social policies, notably in the 
fight  against  poverty,  whilst  allowing  to  respond  to  the  individual  needs  faced  by  Member 
States and regions. 

In  addition,  the  recitals  of  the  ESF  regulation  as  well  as  Annex  VI  of  the  NRPP  regulation 
specify  that  Member  States  should  concentrate  resources,  inter  alia,  on  the  following  four 
priority (i.e. obligatory) themes: 

•  social inclusion   

• 

food and/or basic material assistance   

•  addressing child poverty and implementing the Child Guarantee  

•  combating  youth  unemployment,  including  through  education  and  training  and 

implementing the Youth Guarantee 

The European Semester will play an ever more important role to direct funding towards those 
social  and  employment  areas  most  in  need  as,  taking  into  account  the  specific  national  and 
regional needs and challenges identified. The Commission will be vigilant to ensure that the 
social and employment challenges are appropriately covered in the Plans. 

Furthermore,  the  proposed  EU  Facility  covers  the  scope  of  the  current  InvestEU  Social 
Investment  and  Skills  Window.  By  using  the  budgetary  guarantee  foreseen  under  the  new 
European Competitiveness Fund InvestEU instrument, it will allow to use that guarantee for 
the  same  measures  that  are  today  supported  under  InvestEU,  including  microfinance  and 
affordable social housing. 

177 

 
 
5.3. Monitoring 

Enhanced monitoring 

The rapid pace of changes exacerbated by the cost-of-living, as well as significant shifts in 
the labour market and workforce, calls for better anticipation and stronger, more agile 
evidence.  In  this  context,  the  Commission  will  improve  the  monitoring  of  poverty  and  put 
forward new indicators on affordability, with a view to having them agreed by 2028 and identify 
a strong monitoring basis for progress towards the 2050 ambition of helping eradicating poverty 
in  the  EU  by  2050.  This  new  set  of  indicators  will  reflect  relevant  different  dimensions  of 
poverty, as well as affordability, such as access to basic goods and services essential for a decent 
life, and purchasing power, wealth and debt. 

Social  monitoring  frameworks  agreed  by  the  Council  and  the  Social  Protection 
Committee cover various dimensions of poverty. Tools for monitoring progress towards the 
EU 2030 poverty and social exclusion target and developments in the overall social situation 
include  i/  the  Social  Protection  Performance  Monitor  (SPPM)  dashboard  (horizontal  trends) 
and SPPM vertical assessment tool (to identify key social challenges and good social outcomes 
across  countries),  ii/  2030  national  targets  monitoring  charts  in  Annex  to  the  SPC  Annual 
Report;  iii/  the  Joint  Assessment  Framework  and  iv/  the  EPSR  social  scoreboard  (that  also 
supports the Social Convergence Framework) and v/ other specific monitoring frameworks.462 

While significant efforts have been made to improve the monitoring of poverty, there is 
scope to further improve poverty indicators, focusing in particular on affordability in the 
light of the cost-of-living pressures experienced over recent years. It appears important to 
further looks at all relevant dimensions of poverty, including in particular severe poverty as 
well as affordability (such as access to basic goods and services, which are essential to ensure 
decent living and wealth or debt). In this respect, the list of deprivation items would gain to be 
reviewed in order to better reflect severe forms of poverty, while the work on agreed indicators 
on the cost of living would gain to be deepened (focusing on the purchasing power of various 
categories of households). Further efforts are also needed as regards the timeliness of social 
statistics, while also improving the comprehensiveness of data and indicators, in particular on 
areas related to access to services or wealth. 

Improving  timeliness  would  significantly  improve  the  monitoring  by  allowing  to  make 
poverty  indicators  as  timely  as  economic  and  employment  ones.  This  is  a  long-standing 
issue highlighted also by the Council and it could be addressed by using more systematically 
flash estimates of poverty and income. Greater use of administrative data could be explored, as 
underlined in the June 2024 Council Conclusions on the role of labour market, skills and social 

462  European  Commission,  'Monitoring  and  Benchmarking  Frameworks:  Indicators  Sub-Group',  Employment, 
Social Affairs & Inclusion, accessed 26 April 2026, https://employment-social-affairs.ec.europa.eu/policies-and-
activities/social-protection-social-inclusion/social-protection-committee/indicators-sub-group/monitoring-and-
benchmarking-frameworks_en. 

178 

 
 
 
 
policies for resilient economies,463 and explore ways to enhance comparability of time series, 
for instance through the development of  adjusted (break-free) series for key social indicators 
such as AROPE, where appropriate and subject to methodological considerations. 

Reviewing progress and implementation 

As  outlined  in  the  EU  Anti-Poverty  strategy,  the  Commission  will  review  the  progress 
towards the 2030 target and the 2050 ambition regularly until 2050. It will provide for each 
Member State an analysis of the main poverty-related challenges and their drivers as well as a 
stress test to assess the resilience of national welfare systems when confronted with potential 
shocks. It will also report on the implementation of the European Child Guarantee (464) across 
Member States. 

This will serve as a basis for joint work with the Social Protection Committee, to help 
Member States achieve their goals. The Commission will intensify its efforts to support those 
experiencing poverty by further implementing existing initiatives and launching the initiatives 
outlined in the APS. These EU efforts should be complemented by national and local efforts 
and  efforts  from  all  stakeholders.  The  Social  Protection  Committee  also  has  a  key  role  in 
monitoring  the  implementation  of  the  Strategy,  building  on  existing  deliverables  and 
workstreams, as well as feeding into discussions on the implementation of the APS on a regular 
basis. 

The need for further research 

The  implementation  of  measures  should  be  consistently  accompanied  by  rigorous 
research and evaluation. Evidence collected so far shed light on poverty as a multidimensional 
phenomenon  and  provided  policymakers  at  EU,  national  and  regional 
level  with 
recommendations on how to tackle these issues. Yet, given the complexity of the phenomenon, 
its  heterogeneity  depending  on  the  different  geographical  areas  and  social  protection 
characteristics, and the rapidly changing landscape (due to demographic, technological, climate 
changes and the new geopolitical context), further efforts have to be done. 

Research can further build on recent or upcoming results. The JRC has already worked on 
several dimensions of poverty and projects under Horizon Europe cover relevant topics such as 
key  drivers  of  inequality  trends,  the  economic  and  social  returns  of  social  services  and 
increasing economic fairness. 

Further research, combined with evaluations and testing/piloting innovative approaches, 
is  key  for  evidence-based  policy  making.  A  key  dimension  relates  to  testing  and  scaling 
innovative solutions, to support more effective policy tools for tackling poverty. Other areas for 
further  research  relate  to  the  territorial  mapping  of  distribution  of  poverty,  at  granular  local 
level to better understand the drivers of poverty at territorial level as well as the more systemic 
use administrative data, for instance to better analyse the persistence and dynamics of poverty 

463 Draft Council Conclusions of 18 June 2024 on the role of labour market, skills and social policies for resilient 
economies (doc. 11066/24, SOC 443, EMPL 258, ECOFIN 676). 
464 Along the 2021 Council Recommendation establishing a European Child Guarantee. 

179 

 
 
 
or low income and low wage situations or the intergenerational transmission of poverty and 
disadvantage.  The  JRC  will  also  examine  associations  between  demographic  change  and 
drivers of poverty in the EU through quantitative and qualitative analysis. Additionally, JRC 
research on the intergenerational transmission of wealth will examine how unequal access to 
family  resources  amplifies  income  and  housing  disparities.  Investing  in  solutions  that  are 
backed by rigorous evidence enables us to better leverage and accelerate the impact of spending, 
to better disseminate best practice across the EU and promote a culture of rigorous innovation 
in social policy. 

180 

 
 
 
 
6. Combating poverty globally 

Poverty  reduction  is  a  key  element  of  the  EU’s  enlargement  and  external  policies. 
Addressing poverty worldwide is not only a moral, but is also an economic imperative, crucial 
for  ensuring  global  security,  stability  and  shared  prosperity.  Reducing  poverty  and  social 
exclusion is an important component of the EU enlargement process, as candidate countries and 
potential candidates are expected to align their social protection and employment systems with 
the EU acquis to advance socio-economic convergence.  In the Agenda 2030 for Sustainable 
Development, the global community recognised that  eradicating poverty in all its forms and 
dimensions, including extreme poverty, is the greatest global challenge and an indispensable 
requirement for sustainable development, and made a joint plan, in the form of the Sustainable 
Development Goals, to work towards this ambition. By promoting inclusive growth, sustainable 
development and social inclusion and protection in partner countries, the EU supports the 2030 
Agenda and strengthens its role as a values-based global actor. Ensuring consistency between 
internal and external policies is vital to achieving lasting progress in poverty reduction both 
within and beyond the EU. 

Enlargement policy 

Poverty and social exclusion remain significant challenges across the candidate countries 
and  potential  candidates,  reflecting  structural  labour  market  weaknesses,  demographic 
pressures,  regional  disparities,  and  gaps  in  social  protection  systems.  As  a  result,  fostering 
inclusive growth and social convergence becomes vital for stability, democratic governance, 
and trust in the EU integration process. The EU’s enlargement policy plays a crucial role in 
combating  poverty  and  promoting  social  inclusion  in  these  regions,  preparing  them  for  EU 
Membership. 

EU initiatives such as the European Child Guarantee and the Youth Guarantee—which are 
progressively  being  implemented  by  candidate  countries  and  potential  candidates—will  be 
instrumental in  tackling child and youth  poverty. By improving access  to  quality  education, 
healthcare  and  employment  opportunities,  these  instruments  aim  to  break  intergenerational 
cycles  of  poverty  and  foster  equal  opportunities  for  all  young  people,  regardless  of  their 
background or residence. 

Candidate countries have made notable progress in aligning their national policies with 
key EU social and employment frameworks. Montenegro has adopted a new Social and Child 
Protection Strategy, introducing targeted measures to reduce child poverty and improve access 
to education and healthcare services. Albania, Serbia and North Macedonia are advancing the 
implementation  of  their  Youth  Guarantee  Plans,  strengthening  employment  services  and 
activation measures, particularly for young people not  in  employment, education or training 
(NEETs). 

Ukraine and Moldova are taking steps to implement the European Child Guarantee, through 
dedicated  national  plans.  Ukraine  is  also  working  towards  implementation  of  the  Youth 

181 

 
 
 
Guarantee,  with  the  support  of  the  Commission,  the  ILO  and  the  European  Training 
Foundation. 

The EU’s financing toolbox, most notably the Instrument for Pre-Accession Assistance 
(IPA  III)  for  the  Western  Balkans  and  Türkiye,  plays  a  crucial  role  in  supporting  social 
inclusion,  employment,  social  services  and  poverty  reduction  in  candidate  and  potential 
candidate  countries.  These  investments  strengthen  public  administration  capacity,  enhance 
access to quality education and healthcare, and modernise social protection systems in line with 
EU acquis and the European Pillar of Social Rights. Emphasis is placed on empowering women, 
young people, and marginalised groups, as well as promoting labour market reforms that reduce 
activity in the informal sector and increase access to decent work. 

In parallel, the Reform Agendas for the Western Balkans and the Republic of Moldova, 
and the Ukraine Facility Plan are key instruments that set out specific commitments aimed 
at strengthening human capital, improving education and skills development, enhancing labour 
market  integration,  and  expanding  inclusive  employment  opportunities. By  linking  financial 
support to concrete reform milestones, these instruments reinforce sustainable livelihoods and 
improved access to quality social services. 

The combination of national reforms and EU-supported strategies provides a structured 
framework  to  reduce  poverty,  strengthen  social  cohesion,  and  support  gradual  socio-
economic convergence with the European Union. 

International cooperation 

The EU has long been a global leader in advancing Sustainable Development Goal 1 — 
ending  poverty  in  all  its  forms.  Eradicating  poverty  remains  the  primary  objective  of  EU 
international  cooperation,  as  enshrined  in  the  Treaties  and  reaffirmed  by  the  European 
Consensus on Development, and it is a core pillar of the Global Gateway strategy. 

After decades of progress, global poverty reduction has stalled, raising concerns that the 2020s 
could become a “lost decade” for development. Today, around 10% of the world’s population 
(nearly 800 million people) still lives below the extreme poverty line of USD 3 per day. 

At the same time, inequalities are widening both within and between countries. The Human 
Development Index (HDI) has declined for two consecutive years, reversing long-term gains. 
While global social protection coverage has improved surpassing half of the world’s population 
for the first time at 52.4% in 2024, up from 42.8% in 2015, 3.8 billion people remain without 
income security or access to essential services, leaving them at risk of persistent poverty. 

The Commission has made concrete commitments to allocate resources and measure the 
impact of the EU’s external action on poverty reduction. Between 2021 and 2024, 8.1% of 
EU-financed  Official  Development  Assistance  (ODA)  (over  EUR  26.6  billion)  directly 
supported  SDG  1  on  eradicating  poverty,  as  part  of  the  wider  scope  of  EU-financed  ODA, 
where all SDGs  are enablers of poverty  reduction.  In Cabo Verde, for instance, EU Budget 
Support helped develop the National Extreme Poverty Eradication Strategy, aiming to eliminate 
extreme  poverty  by  2026  through  an  innovative  domestic  financing  mechanism,  the  Fundo 
Mais. 

182 

 
 
Taking a multidimensional view of poverty, the Commission is on track to meet the NDICI465–
Global  Europe  target  of  allocating  at  least  20%  of  ODA  to  social  inclusion  and  human 
development  in  2021–2027.  By  2024,  32%  of  EU  ODA  had  been  directed  to  areas  such  as 
healthcare, education and training, nutrition, water and sanitation, decent work, gender equality, 
and universal social protection. 

The  Global  Gateway  complements  this  by  mobilising  public  and  private  investments  in 
sustainable infrastructure that create jobs, raise incomes, and expand access to essential services 
such as clean energy, water, health and education; thereby reducing multidimensional poverty. 

Creating decent jobs remains one of the most powerful levers for poverty reduction and 
development impact. In many partner countries, however, unregistered and precarious work 
continue to limit access to stable income and social protection. The EU works closely with the 
International  Labour  Organization  (ILO)  to  assess  the  employment  impacts  of  investment 
projects  through  the  STRENGTHEN  programme.  Another  example  is  the  Team  Europe 
Initiative Jobs through Trade and Investment in the Middle East and North Africa that promotes 
job  creation,  skills  development,  entrepreneurship,  and  women’s  and  youth  economic 
empowerment. 

The EU maintains a zero-tolerance policy on child labour, both within its borders and in 
its  external  action.  It  supports  global  efforts  to  end  child  labour  through  development 
cooperation, trade agreements and targeted projects  such as CLEAR Supply  Chains  Project, 
which  addresses  the  root  causes  of  child  labour  in  supply  chains,  involving  businesses  and 
public authorities as well  as communities, to increase monitoring and awareness,  and tackle 
poverty, and access to education. 

Social protection is another proven driver of poverty reduction. Since the beginning of the 
2021-2027 Multiannual Financial Framework, the EU has supported national social protection 
systems  in  almost  50  countries,  focusing  on  system  strengthening,  expanding  coverage, 
improving  digital  systems,  and  building  resilience  against  shocks.  Increased  coordinating 
efforts with EU Member States are taking place, for instance through regional Team Europe 
Initiatives — on Social Protection in Sub-Saharan Africa and on Inclusive and Equal Societies 
in Latin America and the Caribbean — aiming to reduce poverty and inequality and strengthen 
social cohesion. 

To  better  target  inequality  and  exclusion,  the  Commission  developed  the  Inequality 
Marker (I-Marker), using the Distributional Impact Assessment methodology, to assess 
how interventions benefit the poorest 40% of the population and the most vulnerable. In 
2024, 62% of new international partnership projects were marked as contributing to reducing 
inequality, up from 59% in 2023. The I-Marker now also applies to EFSD+ blending operations 
and  will  soon  include  guarantees,  enhancing  the  monitoring  of  inclusivity  under  the  Global 
Gateway. 

In MENA countries, the EU supports reforms in Jordan to increase women’s participation in 
the labour market and improve access to quality services, while in Lebanon, EU cooperation 

465 Neighbourhood, Development and International Cooperation Instrument. 

183 

 
 
 
strengthens the social protection system and fosters economic recovery for groups in vulnerable 
situations. In Egypt, the EU for Decent Life programme supports national efforts to improve 
living  conditions  for  over  57  million  rural  residents.  In  Syria,  the  2025  Special  Measure 
prioritises economic recovery by expanding financial inclusion and livelihood opportunities for 
displaced and vulnerable populations. 

Throughout  external  actions,  the  Commission  utilises  the  OECD  DAC  gender  marker  and 
through the EU Gender Action Plan 2021-2027 (GAP3) it committed that at least 85% of all its 
actions have gender equality as a principal or significant objective. 

Trade policies 

Free trade is widely recognised as an important instrument for poverty reduction, both in 
economic theory and practice. It refers to the removal of barriers such as tariffs, quotas, and 
subsidies that restrict the movement of goods and services between countries. The link between 
trade  liberalisation  and  poverty  reduction  is  grounded  in  the  principles  of  comparative 
advantage,  specialisation,  and  expanded  market  access  which  together  foster  more  efficient 
resource allocation, stimulate economic growth, and improve living standards. 

Trade with non-EU countries remains a key driver of Europe’s prosperity and a major 
source of employment. The EU has developed one of the world’s most extensive networks of 
free trade agreements (FTAs) to strengthen supply chains and support inclusive globalisation. 
The new generation of EU FTAs includes Trade and Sustainable Development (TSD) chapters 
with legally binding commitments on the effective implementation of core labour standards and 
the promotion of the decent work agenda, ensuring a level playing field with global economic 
partners. 

In  addition,  the  EU’s  Generalised  Scheme  of  Preferences  (GSP)  reduces  or  removes  import 
duties on products from over 60 developing countries in exchange for adherence to international 
social and labour standards. For middle-income countries, GSP+ provides tariff preferences in 
exchange for ratifying and effectively implementing ILO conventions, including the eight first 
fundamental  ILO  Conventions.  For  least-developed  countries,  the  ‘Everything  But  Arms’ 
scheme eliminates all tariffs and quotas (except for arms and ammunition), granting full market 
access  for their exports to  the EU,  on condition  that  a country does not  severely  violate the 
principles enshrined in the fundamental ILO conventions. 

To  ensure  that  trade  liberalisation  aligns  with  sustainable  development  objectives,  EU  trade 
negotiations  are  systematically  accompanied  by 
independent  Sustainable  Impact 
Assessments, which analyse the potential economic, social, human rights, and environmental 
impacts of new trade agreements. 

Beyond  preferential  market  access,  the  EU  also  supports  partner  countries  in 
strengthening  the  institutional  capacity  required  to  uphold  international  labour 
standards.  A  leading  example  is  the  EU  funded  ILO  Trade  for  Decent  Work  (T4DW)466 

International  Labour  Organization 

466 
https://tradefordecentwork.ilo.org/.https://tradefordecentwork.ilo.org/. 

(ILO),  Trade 

for  Decent  Work,  accessed  26  April  2026, 

184 

 
 
 
project, launched in 2019, which links trade policy with targeted technical assistance to improve 
working  conditions  in  developing  economies.  The  T4DW  initiative  has  delivered  concrete 
results in enhancing labour governance systems. It has facilitated the ratification of a number 
of  ILO  conventions,  protocols  and  frameworks  across  several  participating  countries 
(Bangladesh,  Côte  d'Ivoire,  Madagascar,  Mozambique,  the  Philippines,  and  Vietnam), 
extending  the  reach  of  fundamental  labour  protections.  The  project  also  addresses 
implementation:  for  example,  eight  participating  countries  fulfilled  their  ILO  reporting 
obligations between 2021 and 2023, reversing previous patterns of non-compliance. 

This  capacity-building  approach  reflects  the  EU’s  recognition  that  sustainable  trade 
requires  strong  domestic  institutions  capable  of  enforcing  labour  standards,  fostering 
social  dialogue  and  ensuring  transparency.  By  reinforcing  these  systems,  the  EU  helps 
ensure that the gains from trade are more equitably shared, turning market access into a genuine 
pathway to decent work, social inclusion and long-term poverty reduction. 

185 

 
 
 
 
Annex 1. Synopsis report – consultations on the EU Anti-
Poverty Strategy 
This  document  should  be  regarded  solely  as  a  summary  of  the  contributions  made  by 
stakeholders in the context of consultations on the EU Anti-Poverty Strategy. It cannot in any 
circumstances be regarded as the official position of the Commission or its services. Responses 
to the consultation activities cannot be considered as a representative sample of the views of 
the EU population. 

INTRODUCTION 

This document provides an overview of all consultation activities conducted with stakeholders 
from July 2025 to March 2026 as part of the drafting of the EU Anti-Poverty Strategy. The 
general objective of all consultation activities was to collect stakeholders’ views on the main 
root  causes  of  poverty,  to  enable  the  Commission  to  gather  evidence  on  the  areas  requiring 
further action at the EU level to advance efforts to combat and prevent poverty, drawing on a 
comprehensive, transparent, and inclusive stakeholder perspective. 

The following types of consultation took place: 

•  Open  Public  Consultation  through  the  ‘Have  Your  Say’  portal  (25  July  2025  -  24 

October 2025) (467); 

•  Call  for  Evidence  through  the  ‘Have  Your  Say’  portal  (25  July  2025  -  24  October 

• 

2025) (468); 
targeted consultations with Member States, persons experiencing poverty (PEPs), civil 
society organisations (June – October 2025); 

•  a dedicated hearing with social partners (14 October 2025); 
•  an academic conference on the EU Anti-Poverty Strategy with the Bocconi University 

in Milan; 

•  Consultations and meetings with relevant  EU institutions, agencies and bodies (the 
European  Parliament,  the  European  Committee  of  Regions  (CoR),  the  European 
Economic  and  Social  Committee  (EESC),  European  Labour  Authority  (ELA), 
Eurofound, European Training Foundation (ETF)); 

•  An  Implementation  Dialogue  on  measures  to  combat  poverty,  the  Council 
Recommendation on Minimum Income ensuring active inclusion and the European Chil 
Guarantee, held by Executive Vice-President Roxana Mînzatu (24 February 2026);  
•  A high-level seminar on “Fighting poverty at the local level” with Executive Vice-

President (EVP) Roxana Mînzatu (24 March 2026). 

The open public consultation is also summarised in the Factual Summary Report published on the ‘Have 

(467) 
Your Say’ web portal. 
(468) 

The full text of the call for evidence is available on the 'Have Your Say' web portal. 

186 

 
 
 
 
In the Communication on the European Year of  Youth 2022, adopted on 10 January 2024 
(COM/2024/1), the Commission committed to introducing a ‘youth check’ by making full use 
of the Better Regulation and consultation tools. The targeted consultation with civil society 
organisations  (3  July  2025)  included  CSOs  representing  young  people.  Moreover,  the 
Commission met the Member States’ representatives acting as Youth Guarantee coordinators 
(5 December 2025) to gather their views on the Strategy. Moreover, on the 3 March 2026 in 
a parallel event to the European Employment and Social Rights Forum, 15 young participants 
discussed with the EVP Roxana Mînzatu about cost of living and its impact on youth during 
the Youth Policy Dialogue. It encouraged young people to share their experiences, challenges, 
ideas and expectations concerning the rising cost of living. The discussion addressed also the 
key priorities in the EVP's portfolio, specifically the work on the EU Anti-Poverty Strategy. 

OVERVIEW AND RESULTS OF CONSULTATION ACTIVITIES 

This section presents the methodological and procedural aspects of the different consultation 
activities that fed into the report. 

Call for evidence 

The call for evidence ran between 25 July and 24 October 2025 on the ‘Have Your Say’ portal. 
It aimed to compile a broad range of opinions from stakeholders. A total of 196 contributions 
were received. 

Out of the published 196 contributions, 74 came from non-governmental organisations (38%), 
51 (26%) from EU citizens, 12 (6%) from public authorities. 

By category of respondent

3%

2% 1%

4%

4%

4%

6%

13%

38%

NGO (Non-governmental
organisation)

EU Citizen

Other

Public authority

Business Association

Company/business

26%

Academic/Research Institution

Regarding the country of origin, 96% of the responses were received from EU Member States 
(4% from non-EU countries).  Belgium was the most represented country (56 replies), followed 
by Germany (19 replies) and France (17 replies). 

187 

 
 
 
 
 
Country of origin of contributors

56

19

17
17

15

14

7

6
6

4
4
4

3
3
3

2
2
2
2
2

1
1
1
1
1
1
1
1

Belgium
Germany
France
Austria
Italy
Netherlands
Poland
Spain
Portugal
Slovakia
Ireland
Bulgaria
United Kingdom
Romania
Lithuania
Switzerland
Luxembourg
Finland
Czechia
Cyprus
United States
Thailand
Sweden
Malta
Latvia
Hungary
Greece
Croatia

0

10

20

30

40

50

60

The key themes that emerged from the call for evidence include a strong emphasis on the need 
for  a  comprehensive  and  rights-based  approach  that  clearly  recognises  poverty  as  a 
multidimensional issue affecting various demographic groups including children, single-parent 
families,  persons  with  disabilities,  ethnic  minorities,  and  older  people.  Stakeholders 
consistently advocated for universal access to adequate minimum income, set above poverty 
thresholds  and  accessible  without  bureaucratic  obstacles.  They  called  for  the  expansion  of 
affordable housing and care services, investment in lifelong education, and substantial efforts 
to break intergenerational poverty cycles. Furthermore, stakeholders underlined the importance 
of  quality  employment  with  fair  wages  that  combat  in-work  poverty,  addressing  digital 
exclusion,  and  ensuring  sustainable  social  and  economic  development  through  targeted, 
adequate,  and  sustained  EU  funding.  Meaningful  participatory  mechanisms  involving  those 
with lived experiences of poverty in designing and evaluating policies were a recurrent element 
of numerous contributions. All contributions from the call for evidence can be found online. 

Open public Consultation 

The open public consultation on the EU Anti-Poverty Strategy was open between 25 July and 
24 October 2025. The online questionnaire, available in 24 EU languages, sought views on the 
root  causes  of  poverty  and  on  the  national  and  EU  actions  for  combating  and  preventing 

188 

 
 
  
poverty. The public consultation gathered 126 replies. The questionnaire combined both closed 
and open-ended questions. Most questions used a Likert-scale rating to assess the relevance and 
effectiveness,  while  other  questions  allowed  respondents  to  provide  more  detailed  input  or 
suggestions.  Its  goal  was  to  gather  quantitative  and  qualitative  feedback  from  citizens  and 
stakeholders. 

The  stakeholder  categories  that  responded  to  the  public  consultation  included:  non-
governmental organisations (47.6% ‒ 60 respondents), EU citizens (20.6% ‒ 26 respondents), 
public  authorities  (11.9%  ‒  15  respondents),  companies/businesses  (4.8%  -  6  respondents), 
business  associations  (4%  ‒  5  respondents),  academic/research  institutions  (1.6%  ‒  2 
respondents),  a  consumer  organisation  (0.8%  ‒  1  respondent)  and  a  trade  union  (0.8%  ‒  1 
respondent). Additionally, 7.9% (10) respondents classified themselves as ‘other’. 

I am giving my contribution as

2%

1% 1%

4%

5%

8%

12%

21%

NGO (Non-governmental
organisation)

EU Citizen

Public authority

48%

Other

Company/business

Business Association

Academic/Research Institution

Regarding the country of origin, 97% of the responses were received from EU Member States 
(3% from non-EU countries).  Belgium was the most represented country (26 replies), followed 
by Spain (15 replies) and France (13 replies). 

189 

 
 
 
Country of origin of contributors

26

15

13

11

10

8

7
7
7

5

3
3

2
2

1
1
1
1
1
1
1

Belgium
Spain
France
Romania
Austria
Italy
Portugal
Ireland
Germany
Netherlands
Malta
Finland
United Kingdom
Czechia
Türkiye
Poland
Martinique
Luxembourg
Estonia
Denmark
Brazil

0

5

10

15

20

25

30

The respondents were predominantly within the 30-54 age group, forming a majority of 53% 
of all participants. The 55-64 age group represented the second-largest segment at 24%, while 
younger  adults  aged  18-24  and  25-29  made  up  much  smaller  portions  at  7%  and  6% 
respectively.  Senior  respondents  aged  65  and  older  comprised  8%  of  the  sample,  and  those 
under 15 were the smallest group at 2%. 

Most respondents reported no experience with poverty at the time of the contribution (71% of 
all participants). Among those facing economic challenges, 12% answered affirmatively that 
they were experiencing poverty at the time, while 10% indicated they had experienced poverty 
in  the  past  but  were  not  living  in  poverty  at  the  time  of  the  contribution.  7%  reported  that 
although they were not in poverty, they felt at risk of falling into it. 

The questionnaire asked the respondents about their perception of the most important causes of 
poverty. All proposed causes were found to be very relevant, with too low or inadequate social 
benefits, high costs of essential goods/services, high housing costs the following considered to 
be relevant or very relevant by the highest number of respondents. 

When asked about poverty's causes, respondents rated inadequate social benefits (98.4%), high 
costs of essential goods/services (97.6%), and high housing costs (94.4%) as most relevant (469). 
For national policy effectiveness, improving access to affordable housing (4.79/5), supporting 

(469) 
in question as either ‘very relevant’ or ‘relevant’. 

The figure in parentheses represents the percentage and number of respondents who regarded the cause 

190 

 
 
 
 
children's  access  to  quality  services  (4.75/5),  and  improving  access  to  essential  services  for 
vulnerable groups  (4.72/5) received the highest ratings (470). Respondents identified children 
living in poverty (110 of 126), persons with disabilities (97), and the homeless (91) as priority 
vulnerable groups requiring intervention. Past national policies involving civil society (4.33/5) 
and people experiencing poverty (4.31/5) were rated most effective. When asked what poverty 
means  to  them,  stakeholders  described  it  as  multidimensional  deprivation  extending  beyond 
income to include lack of access to essential services and a human rights violation incompatible 
with human dignity. Regarding EU-level actions, contributors most frequently emphasised the 
need for adequate and accessible minimum income schemes (with calls for an EU directive), 
affordable social housing and energy poverty solutions, universal access to affordable essential 
services, quality employment with fair wages to combat in-work poverty, multidimensional and 
intersectional  approaches  coordinating  policies  across  sectors,  meaningful  participation  of 
people experiencing poverty in policy design, and strong EU funding with robust monitoring 
mechanisms and disaggregated data collection. 

Targeted consultations and input from stakeholders 

Targeted consultations were conducted from June 2025 to March 2026. 

EU Member States 

Targeted consultations with representatives of Member States were conducted through: 

Discussion in the Employment, Social Policy, Health, and Consumer Affairs (EPSCO) Council 
on the 19 June 2025 and in the informal EPSCO on the 12 February 2026; 

Discussions in the Social Protection Committee (SPC) on the 24 October 2025 and 3 February 
2026; 

Meeting with the advisers for European PES affairs (AFEPAs) (4 December 2025); 

Meeting with Youth Guarantee coordinators (5 December 2025); 

Meeting of the Minimum Income Network (MINET) (10 December); 

Discussions  in  the Employment Committee (EMCO) of  the Employment and Social Affairs 
Council (EPSCO) on the 19 January 2026. 

During  the  discussion  in  the  EPSCO  Council  (19  June  2025),  the  aim  of  poverty  reduction 
resonated  strongly  among  Member  States  representatives,  with  each  expressing  targeted 
strategies  towards  poverty  alleviation,  including  some  already  implemented  at  the  national 
level. Delegations shared the opinion that poverty must be tackled from a multi-dimensional 
perspective,  with  an  important  focus  put  on  children  and  affordable  and  accessible  basic 
services.  Housing  affordability was also  considered one of the main roots of poverty across 
Member States.  

(470) 
The survey asked respondents to evaluate each policy on a scale of 1 to 5, where 1 denoted ‘not effective 
at  all’  and  5  signified  ‘very  effective’.  The  figures  in  parentheses  provide  the  mean  rating  assigned  to  each 
respective policy on the 1-5 scale, with figures the closest to 5 representing the most effective policy. 

191 

 
 
 
One of the policy debates of the informal EPSCO Council held on the 12 February 2026 was 
dedicated  to  the  Strategy.  The  European  Parliament  and  the  Social  Protection  Committee 
(SPC) underlined the importance of linking the strategy to the European Semester. The Member 
States  delegates  agreed  on  the  need  to  tackle  the  multi-dimensional  nature  of  poverty  and 
highlighted that the subsequent Multiannual Financial Framework (MFF) should be compatible 
with ambitions of the Strategy. There was also consensus among several delegates on the need 
to break the inter-generational cycle of poverty and take a holistic approach covering housing, 
education, childcare and pensions. 

During the Social Protection Committee (SPC) discussion on the 24 October 2025, Member 
States  broadly  supported  a  comprehensive  and  systemic  approach  to  poverty,  going  beyond 
social and education areas. Key thematic priorities included minimum income, child poverty 
and support for families, inclusive labour markets, access to affordable housing and essential 
services  and  mental  health.  Several  delegations  underlined  the  importance  of  tackling  non-
monetary  aspects  of  poverty,  such  as  social  exclusion,  food  insecurity  and  territorial 
inequalities.  Many  Member  States  called  for  a  comprehensive  monitoring  framework 
combining quantitative and qualitative indicators, and for peer learning and exchange within 
the SPC to remain central throughout the process. At the SPC meeting on the 3 February 2026, 
delegations broadly supported the forthcoming Strategy and agreed that the SPC should play a 
role in its follow-up. Several delegations underlined the need for the Strategy to draw on a broad 
evidence base. 

At the discussion in the EMCO Committee of the EPSCO on the 19 January 2026, there was 
consensus  among  the  delegates  that  promoting  entry  into  the  labour  market  and  inclusive 
activation,  through  targeted  and  individualised  support  especially  to  those  furthest  from  the 
labour market, should be a priority of poverty-reduction efforts.  Delegates agreed that quality 
employment remains the surest and shortest path out of poverty, as well as key to its prevention. 
The way to fight in-work poverty through a series of consistent measures aimed at improving 
the job and income security of workers was also highlighted by numerous delegations. 

The framework of the EU Anti-Poverty Strategy was presented to the advisers for European 
PES Affairs (AFEPAs) and the Minimum Income Network (MINET), respectively on the 4 and 
10 December 2025. The two exchanges underscored a central message, reflected in a consensus 
among the delegates that poverty is multidimensional and tackling it means comprehending its 
root  causes  and  leveraging  cross-sectoral  policy  instruments  –  social  protection,  essential 
services, employment policies, and beyond. 

The meeting with Youth Guarantee coordinators (5 December 2025) brought diverse views on 
support  strategies  for  young  people  experiencing  or  at  risk  of  poverty.  Some  coordinators 
emphasised  systematic,  preventive,  long-term  support  tailored  to  individual  needs.  On  the 
housing front, Housing First solutions emerged consistently in the discussion as a recommended 
course of action. 

192 

 
 
 
 
Relevant EU institutions, agencies and bodies 

On 25 June 2025, the EMPL committee held a public hearing on the development of a new EU 
Anti-Poverty Strategy. Moreover, a dedicated debate in the European Parliament was held on 
the day of eradication of poverty (17 October 2025). The European Parliament adopted an own-
initiative report on developing an EU Anti-Poverty Strategy on 12 February 2026. 

The hearing on a new EU Anti-Poverty Strategy in the European Parliament's EMPL committee 
was accompanied by a roundtable with stakeholders (471). The speakers invited the Commission 
to aim for poverty eradication, while also redefining poverty in the context of the new European 
Pillar of Social Rights (EPSR) Action Plan. They advocated for investing in early childhood 
and  addressing  child  poverty  through  a  strengthened  European  Child  Guarantee,  promoting 
active labour market policies and addressing in-work poverty. They called for adequate funding 
and strong governance, involving people experiencing poverty and civil society organisations. 

During the European Parliament Plenary Debate on the International Day for the Eradication of 
Poverty (17 October 2025), several political groups emphasised the multidimensional nature of 
poverty,  the  need  to  target  funds  where  most  needed,  and  the central  role of  a  strengthened 
European  Child  Guarantee.  A  call  for  integrated  multi-policy  actions  across  employment, 
social, education and energy policies resonated among the Members. 

The European Committee of the Regions (CoR) adopted an opinion on the forthcoming EU 
Anti-Poverty  Strategy  during  its  Plenary  Session  on  14  October  2025472.  The  CoR 
acknowledged the disparities in poverty levels across Europe in its opinion and called for an 
ambitious, realistic plan aligned with the United Nations 2030 Sustainable Development Goals, 
addressing these differences. The opinion urged the EU not only to alleviate but to eradicate 
poverty,  in  line  with  the  statement  by  Commission  President  von  der  Leyen  on  the  EU's 
ambition to eradicate poverty in the EU by 2050. 

The European Economic and Social Committee (EESC) was consulted through a request for an 
opinion,  which  was  adopted  on  17  July  2025473.  The  EESC  called  for  the  Strategy  to  be 
intersectional, gender-responsive, and based on a multidimensional definition of poverty that 
includes social, psychological, political and gender dimensions, with ambitious targets aimed 
at eradicating extreme poverty through a rights-based approach. The opinion considered that its 
key  elements  should  include  binding  standards  on  adequate  income  and  social  protection, 
measures  to  combat  in-work  poverty  through  quality  jobs  and  proper  implementation  of 
minimum wage directives, and universal access to affordable essential services. 

 Fourth World,  UNICEF  and  KU  Leuven,  Social  Platform,  European Anti-Poverty  Network  (EAPN), 

(471) 
ATD (All Together in Dignity). 
472  European  Economic  and  Social  Committee,  Opinion  on 
https://cor.europa.eu/en/our-work/opinions/cdr-1106-2025 
473 

European  Committee 

1106/2025,  Brussels, 
https://www.eesc.europa.eu/en/our-work/opinions-information-reports/opinions/eu-anti-poverty-strategy 

the  Regions,  Opinion  CDR 

of 

2025, 

the  EU  Anti-Poverty  Strategy,  2025, 

193 

 
 
 
The Advisory Committee on Equal Opportunities between women and men prepared an opinion 
on feminisation of poverty in the context of preparations of the Strategy474.  

The  European  Union  Agency  for  Fundamental  Rights  contributed  to  the  discussions  on  the 
Strategy  through  participating  in  the  expert  roundtable  on  an  EU  Anti-Poverty  Strategy 
organised by the Office of the United Nations High Commissioner for Human Rights (OHCHR) 
on the 6 October 2025. The outcome of the roundtable was outlined in the OHCHR’s input to 
the European Commission public consultation475. 

The Commission met the European Labour Authority (ELA) on the 24 November 2025. ELA 
recommended  for  the  Strategy  to  reflect  on  positive  approaches,  including  preventive 
approaches, which safeguard the income of and access to quality jobs for the working poor. 
Moreover,  the  need  to  reflect  on  how  the  vulnerable  groups  to  be  identified  in  the  Strategy 
intersect  with  the  sectoral  breakdown  of  undeclared  work,  and  to  identify  patterns  where 
analysis exists emerged. 

The Commission met the European Training Foundation (ETF) on the 6 February 2026. The 
exchange focused on policy implications of addressing risks of social exclusion and poverty in 
the  EU  neighbouring,  particularly  enlargement  countries.  ETF  highlighted  that  in  candidate 
countries, poverty is primarily influenced by low-quality and informal employment rather than 
solely  by unemployment. This  results in widespread in-work poverty  due to  factors such  as 
insufficient wages, insecure contracts, and restricted access to social insurance. The discussion 
concluded  that  while  social  protection  systems  contribute  to  poverty  reduction,  they  are 
significantly less effective compared to those in the EU, due to limited coverage, inadequate 
benefit levels, and less precise targeting.  

On  24  February  2026,  Executive  Vice-President  Roxana  Mînzatu  hosted  an  implementation 
dialogue on “Measures to combat poverty: the Council Recommendation on adequate minimum 
income  ensuring  active  inclusion,  and  the  Council  Recommendation  on  the  European  Child 
Guarantee”. The multistakeholder exchange with representatives of Member States, regional 
and local authorities, social partners, and civil society organisations demonstrated an overall 
agreement  on  the  importance  of  the  local  level  in  addressing  poverty-related  issues,  with 
participants  signalling  that  governance  is  often  fragmented.  Many  participants  identified 
adequacy, availability, and awareness as challenges hampering the full implementation of both 
the  Council  Recommendation  on  adequate  minimum  income  and  the  European  Child 
Guarantee. The lack of sufficient funding and investments was mentioned repeatedly, together 
with calls for ring-fencing allocations for social matters and/or ECG implementation in the next 

474  Advisory  Committee  on  Equal  Opportunities  for  Women  and  Men:  Opinion  on  Women  and  Poverty, 
https://commission.europa.eu/document/download/29582f6a-33f4-4bc4-a107-
95d1d5ebaf25_en?filename=2025_Opinion_Feminisation_of_Poverty_EN.pdf. 
475 Office of the United Nations High Commissioner for Human Rights (OHCHR), An EU Anti-Poverty Strategy 
grounded 
consultation 
the 
https://europe.ohchr.org/sites/default/files/2025-10/EU%20Anti-Poverty%20Strategy%20contribution%20-
%2030-10-2025.pdf. 

European  Commission 

human 

public 

rights 

Input 

in 

to 

194 

 
 
 
MFF.  Outreach  to  vulnerable  groups,  such  as  Roma  or  families  living  in  rural  areas,  was 
indicated as a successful practice for addressing intergenerational poverty.   

High-level seminar with cities  

On 24 March, EVP Roxana Mînzatu hosted a high-level seminar “Fighting poverty at the local 
level”,  co-organised  by  the  Commission  and  Eurocities.  The  roundtable  discussion  with 
representatives from 8 European cities (Athens, Barcelona, Dublin, Ghent, Lodz, Rotterdam, 
Tallinn,  Zagreb).  Yonnec  Polet,  CoR  Rapporteur  on  the  Anti-Poverty  Strategy,  and  André 
Sobczak,  Secretary  General  of  Eurocities  set  the  scene  on  the  role  cities  (and  regions)  in 
addressing poverty. The participants shared best practices of measures to fight poverty and child 
poverty, and measures to support people facing housing exclusion. Moreover, the participants 
reflected how the upcoming Strategy could help them implement policies and projects to fight 
poverty  at  the  local  level.  The  cities  highlighted  in  their  interventions  best  practices  for 
measures  to  address  (child)  poverty  and  to  support  people  facing  housing  exclusion  which 
included a focus on prevention and early identification measures (such as early debt detection), 
outreach to vulnerable groups, evidence-based and data-driven projects and policies, including 
partnerships with universities to research what works, an integrated approach to service delivery 
including data exchange between different institutions and services, the inclusion of experts by 
experience in policy design and implementation, and measures to improve the trust of citizens 
towards the institutions (e.g. direct contact, neighbourhoods' involvement). Participants agreed 
on the need for EU funding to support local initiatives. Some participants called for earmarked 
funding and for mandatory urban chapters. 

People experiencing poverty 

In a parallel event to the 2025 Social Forum (Porto, 18 September 2025), persons experiencing 
poverty  (PEPs)  were  consulted  on  the  EU  Anti-Poverty  Strategy.  Eight  workshops  were 
organised  around  the  topics  of  participation  of  PEPs  in  policymaking,  housing  and 
homelessness,  active  inclusion  (minimum  income  and  integration  in  the  labour  market),  in-
work poverty, discrimination, access to services, national and local anti-poverty strategies and 
digitalisation. The discussions underscored the necessity of an institutional approach to PEP 
participation  in  policymaking.  Key  concerns  included  digital  barriers  for  impoverished 
individuals, and the vital role of integrated services like education and healthcare or housing 
demolitions  impacting  Roma  communities.  There  was  a  call  to  ensure  access  to  adequate 
minimum income, facilitate active labour market inclusion and tackle in-work poverty through 
the improved implementation of minimum wages. Access to services was deemed crucial, with 
a demand for sufficient funding, better training for social workers, and clear legal frameworks. 

The  Commission  held  a  consultation  webinar  with  representatives  of  Roma  (Brussels,  21 
October 2025), organised in collaboration with the European Roma Grassroots Organisations 
(ERGO)  Network,  on  their  experience  of  poverty  and  their  vision  for  the  EU  Anti-Poverty 
Strategy, with a specific focus on income support, inclusive labour market and access to quality 
services. The exchange highlighted the persistent multidimensional poverty and discrimination 
faced by Roma communities across Europe. Participants called for combating discrimination in 
access to housing, addressing evictions of Roma settlements and implementing mechanisms to 
195 

 
 
support  the  legalisation  of  informal  housing.  They  stressed  the  need  to  improve  access  to 
essential services, such as running water, electricity, sanitation, banking, as well as healthcare 
and quality food. 

All  Together  in  Dignity  (ATD)  Fourth  World  held  a  participatory  dialogue  with  the 
Commission (Brussels, 22 October 2025), with the meaningful participation of people living in 
poverty across Europe, focusing on issues of socio-economic discrimination and non-access to 
benefits and services. The participants expressed that individuals experiencing poverty often 
feel neglected by the very services meant to support them. This societal stigma, exacerbated by 
political rhetoric, fosters discrimination and unfair treatment, leading to detrimental outcomes 
like  dropping  out  of  school  or  work,  addiction,  and  mental  health  problems,  ultimately 
perpetuating  a  cycle  of  poverty.  Participants  urged  for  EU-wide  legislation  criminalising 
discrimination on socio-economic grounds and for improving access to services unities. The 
concept  of  'double  punishment'  emerged,  where  those  already  struggling  face  additional 
challenges  and  stigma  when  seeking  aid.  Involving  individuals  with  lived  experiences  of 
poverty was encouraged, noting the importance of mutual understanding and ensuring they are 
informed about if and how their feedback informs policy decisions. 

Social partners 

A dedicated hearing with social partners took place on the 14 October 2025. The meeting was 
attended by representatives from the Commission and was organised by the Social Dialogue 
Committee, comprising recognised European cross-industry social partners and their national 
organisations. The purpose of the meeting was to gather the social partners’ views and input on 
the  upcoming  EU  Anti-Poverty  Strategy  (476).  In  total,  33  social  partner  organisations  were 
present, of which 22 represented trade unions and 11 were employer organisations. 

Trade  unions  and  employers  reported  on  different  challenges  heavily  impacting  Europe's 
workforce in the context of in-work poverty. Employers called for increased in-work benefits 
whereas social partners advocated for addressing low work intensity. There was a consensus on 
the need to tackle involuntary part-time work. Trade unions emphasised the need to address its 
key  drivers  while  employers  stressed  that  finding  affordable  housing  remained  a  significant 
struggle across several Member States, urging intervention at the EU level. They pointed out 
that even with salary increases, the rise in living costs erases any progress made. Both sides 
united in their call to rethink public procurement policies, warning that focusing solely on the 
lowest  prices  often  leads  to  undeclared  work  and  inadequate  working  conditions,  thus 
obstructing  efforts  to  alleviate  poverty  across  the  EU.  Additionally,  they  advocated  for 
enhanced  labour  inspections  to  address  informal  employment  and  smoother  transitions  to 
unemployment benefits between fixed-term contracts. 

(476) 
also invited to submit written contributions until 31 October 2025. 

Background documents were provided to the social partners in advance of the meeting, and they were 

196 

 
 
 
 
 
Civil society organisations (CSOs) 

A  dedicated  meeting  with  civil  society  organisations  (CSOs)  active  in  the  area  of  social 
inclusion, combating poverty, youth policies and energy poverty took place on the 3 July 2025. 
This  meeting  gave  the  EU-level  umbrella  organisations  the  opportunity  to  share  questions, 
preliminary comments and highlight key topics that required attention in the preparations of the 
EU  Anti-Poverty  Strategy.  In  total,  56  participants  representing  42  EU-level  civil  society 
organisations were present. The discussion centred around root causes of poverty, effective and 
ineffective strategies in addressing poverty, and proposals of concrete activities or policies to 
combat  and  prevent  poverty.  In  their  feedback,  CSOs  welcomed  the  strategy,  calling  for  a 
multidimensional,  life-cycle-based  approach  and  urged  that  poverty  be  analysed  beyond 
monetary terms, emphasising societal participation and access to social services. Highlighting 
the inadequacy of generic, one-size-fits-all activation measures, they advocated for access to 
adequate  resources,  including  minimum  income  schemes  above  the  poverty  line.  They 
supported integrated, rights-based, person-centred approaches and the inclusion of beneficiaries 
as  policy  co-creators.  Furthermore,  attention  was  drawn  to  intergenerational  poverty,  the 
importance  of  family  support  measures,  and  maintaining  work-life  balance.  Finally,  they 
cautioned against non-evidence-based, fragmented programs and overreliance on employment 
as the sole solution to poverty. 

Academic conference on the EU Anti-Poverty Strategy 

The  European  Commission  and  the  Bocconi  University  in  Milan  co-hosted  a  high-level 
conference  on  the  20  October  2025.  The  event  aimed  to  gather  expert  insights  and 
recommendations  for  shaping  the  EU Anti-Poverty  Strategy.  The  conference  featured  three 
thematic  panels,  bringing  together  expert  speakers  from  academia,  civil  society,  and  the 
European  Commission.  The  discussions  also  included  contributions  from  people  with  lived 
experiences  of  poverty  and  student  presentations  offering  innovative  policy  ideas.  Panel  1 
(‘Minimum income: an active Inclusion approach’) highlighted the importance of developing 
minimum income models that truly work for people. Speakers stressed the need to challenge 
misconceptions  about  minimum  income  schemes  and  simplify  administrative  procedures  to 
enhance accessibility. Panel 2 (‘Addressing the root causes of poverty across generations: from 
child and old-age poverty to prosperity pathways’) presented evidence showing that poverty 
persists across all EU regions and is often intergenerational. Experts called for comprehensive, 
family-based policy approaches, with a strong focus on ensuring opportunities and inclusion 
for younger generations. Panel 3 (‘Poverty and finance: addressing poverty as an investment – 
ensuring the right balance in tax/benefit systems’) discussed the economic and social returns of 
investing in anti-poverty measures, highlighting the costs of inaction. Speakers also underlined 
the importance of financial and pension literacy as essential tools for individual empowerment 
and long-term resilience. 

On  the  5  March  2026,  the  advisory  service  to  the  European  Commission  Inspire,  Debate, 
Engage and Accelerate Action (I.D.E.A), hosted a High-Level Working Lunch ‘Addressing 
Poverty in the EU: Shaping the first-ever EU Anti-Poverty Strategy’. It aimed to facilitate an 
exchange  academic  experts  and  Commission  officials.  The  cyclical  nature  of  poverty  was 

197 

 
 
highlighted, and the experts underlined that it requires policies addressing both persistent and 
transitional  poverty,  with  particular  emphasis  on  creating  pathways  between  education  and 
work,  ensuring  quality  employment,  and  improving  social  benefit  uptake  through  effective 
support  systems  that  consider  administrative  and  cultural  barriers.  Additionally,  the  experts 
emphasised that the alignment of EU strategies with national implementation faces challenges, 
requiring  proactive  engagement  from  the  Commission  and  Member  States  to  develop 
transformative policies that address economic insecurity, uneven territorial impacts of the green 
transition, and improve coordination across governmental entities. 

OVERALL RESULTS FROM CONSULTATIONS 

The  consultations  conducted  and  the  input  provided  by  Member  States,  EU  institutions, 
agencies and bodies, as well as civil society, persons experiencing poverty and social partners 
highlighted key priorities to be addressed by the Strategy. 

Overall, stakeholders welcomed the Commission's commitment to combating and preventing 
poverty and to supporting Member States’ efforts in pursuing these objectives. 

The  consultation  revealed  strong  consensus  among  stakeholders  on  several  critical  policy 
priorities.  The  most  frequently  advocated  measure  across  multiple  organisations  was  the 
establishment  of  adequate  minimum  income  systems  and  simplified  procedures  to  access 
benefits.  Numerous  contributions  called  for  affordable  housing  and  interventions  to  combat 
homelessness, including scaling Housing First approaches, implementing rent regulation and 
banning  utility  disconnections  for vulnerable households. Energy poverty also  emerged as  a 
major concern. 

Stakeholders  consistently  emphasised  the  need  for  meaningful  participation  of  people 
experiencing poverty in policy design and implementation, such that goes beyond consultation 
and adopts formal structures to ensure genuine co-decision-making. A key recurring theme was 
the  need  to  prevent  and  combat  child  poverty,  with  contributors  calling  for  strengthened 
implementation of the European Child Guarantee. Concerning labour market and employment, 
quality  employment  with  fair  wages,  and  measures  to  combat  in-work  poverty  constituted 
recurring points. 

A  significant  cross-cutting  theme  was  the  demand  for  improved  data  collection  with 
disaggregation by ethnicity, age, gender, and other characteristics to better monitor vulnerable 
groups. Throughout the consultation, contributors emphasised a human rights-based approach 
that  treats  poverty  as  a  rights  violation  rather  than  individual  failure  and  urged  a  shift  from 
viewing  social  spending  as  expenditure  to  recognising  it  as  strategic  social  investment  with 
economic returns. Strong support for civil society organisations through direct, multi-annual 
funding and simplified administrative processes underpinned many contributions. 

The  consultation  produced  detailed  feedback  from  a  wide  range  of  stakeholders  that  was 
reviewed thoroughly in the process of the design of the Strategy and its related actions. 

198 

 
 
 
 
Annex  2.  Synopsis  report  -  consultations  on  the 
Commission proposal for a Council Recommendation on 
Fighting Housing Exclusion 

The feedback received from the open public consultation on the EU Anti-Poverty Strategy open 
between 25 July and 24 October 2025 contributed to shaping the content of the Commission’s 
proposal  for  a  Council  Recommendation  on  Fighting  Housing  Exclusion.  Targeted 
consultations  with  people  experiencing  poverty  which  took  place  in  the  context  of  the 
development of the EU Anti-Poverty Strategy in September and October 2025 also informed 
the development of this proposal. 

This  initiative  is  also  built  on  the  results  of  the  public  consultation  undertaken  by  the 
Commission in the context of the development of the European Affordable Housing Plan which 
took place between 11 July and 17 October 2025. This consultation included questions aimed 
to  gather  participants’  views  on  ensuring  affordable  and  accessible  housing  for  people  in 
vulnerable  situations,  at  risk  of  discrimination,  or  homeless  persons.  More  than  13  000 
responses  were  provided  in  the  framework  of  this  consultation,  as  part  of  the  Affordable 
Housing Dialogue launched by the Commission in the context of the preparation of the Plan. 

The European Platform on Combatting Homelessness which includes all relevant stakeholders 
that  are  responsible  for  the  fight  against  homelessness  -  the  European  Commission,  the 
European  Parliament,  all  Member  States,  the  Committee  of  the  Regions,  the  Economic  and 
Social Committee, social partners and relevant European NGOs, were consulted on the contents 
of this proposal via a targeted written consultation in January 2026. 

Call for evidence 

The call for evidence ran between 12 March 2026 and 9 April 2026 on the “Have Your Say” 
portal. A total of 70 contributions were received. 

Out  of  the  published  70  contributions,  66%  (47  total)  came  from  non-governmental 
organisations, 10% (7 total) came from public authorities, while 9% (6 total) are EU citizens.  

Regarding the country of origin, 99% of the responses were received from EU Member States 
(1% from the UK).  Belgium was the most represented country at 46% (32 replies), followed 
by France and Spain at 9% (6 replies) and Germany at 6% (4 replies). 

199 

 
 
 
 
 
 
 
The call for evidence revealed a broad consensus that housing exclusion and homelessness are 
multidimensional and structurally embedded challenges across Member States, driven by rising 
housing costs, limited supply of affordable and social housing, and increasing socio-economic 

200 

 
 
  
 
 
 
precariousness.  A  recurring  theme  is  the  widening  gap  between  income  levels  and  housing 
prices,  exacerbated  by,  among  others,  inflationary  pressure  and  financialisation  of  housing 
markets, leading not only to visible homelessness but also to an expansion of housing exclusion, 
including  overcrowding  and  precarious  tenures.  The  feedback  highlights  that  certain  groups 
face  disproportionate  barriers,  including  Roma,  persons  with  disabilities,  LGBTQI+  people, 
women and single mothers, young people leaving care, migrants, and large families, pointing 
to the need for more targeted and inclusive approaches. At the same time, housing exclusion 
increasingly affects low- and middle-income households, families with children and workers in 
precarious employment, highlighting its systemic nature. 

Another  key  challenge  concerns  the  fragmentation  of  policy  responses  and  governance 
structures. Housing exclusion is closely linked to other policy areas such as social protection, 
health,  employment,  and  migration,  yet  coordination  across  these  domains  remains  limited. 
This fragmentation reduces the overall effectiveness of interventions and creates gaps in service 
provision, particularly for those with multiple vulnerabilities. 

Contributors emphasise that Member States should prioritise strengthening the supply of social 
and affordable housing through sustained, targeted investment, underpinned by effective land-
use  policies  and  financing  mechanisms  designed  to  secure  long-term  affordability.  Better 
regulation of private rental markets, including measures addressing excessive rent increases and 
the impacts of short-term rentals, is identified as necessary to improve affordability and security 
of tenure. Additionally, the collected replies highlight that discrimination in housing access, 
whether  in  private  or  public  sectors,  remains  a  persistent  and  systemic  barrier  to  housing 
inclusion. 

Homelessness emerges as the most severe form of housing exclusion and a critical social risk 
requiring targeted and coordinated policy responses. The feedback underscores the importance 
of  shifting  towards  housing-led  models  which  prioritise  rapid  access  to  permanent  housing 
combined with tailored and sustained support and integrated, person-centred approaches. 

Prevention is identified as a key, yet underdeveloped, policy dimension. Early identification of 
housing  risks,  effective  eviction  prevention,  access  to  adequate  housing  benefits  and  timely 
social support can significantly reduce the likelihood of housing exclusion and homelessness. 

There  is  a  shared  call  for  more  stable,  multi-annual  financing,  strengthened  coordination 
between housing, employment and social policies, and systematic involvement of regional and 
local authorities and civil society. 

Finally,  the contributions  point to the importance of data and evidence-based policymaking. 
Improved data collection, based on common definitions and harmonised indicators, is essential 
to  capture  all  forms  of  housing  exclusion  and  homelessness,  and  to  support  monitoring  and 
evaluation at EU and national level.  

Overall,  the  contributors  call  for  a  more  strategic,  integrated,  and  adequately  resourced 
approach  to  tackling  housing  exclusion,  grounded  in  the  recognition  of  housing  as  a  key 
determinant of social inclusion. 

201