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Definitions of Poverty

Poverty is a complex and multi faceted issue. In order to help break it down the following definitions are used to help take account of the fact that people experience poverty in a range of different ways.

Relative poverty This is where some people's low income means that they struggle to participate in 'ordinary' economic, social and cultural activities. What this means will vary from country to country, depending on the standard of living enjoyed by the majority. In Scotland relative poverty is determined as those earning less than 60% of the national average. While not as extreme as absolute poverty, relative poverty is still serious and harmful.

Absolute poverty This is when people lack the basic necessities for survival. For instance they may be starving, lack clean water, proper housing, sufficient clothing or medicines. There is debate in some areas around whether absolute poverty exists in the UK. In Scotland absolute poverty is deemed as earning less than 60% of what the average wage was in 1998/99. This determines whether those who are on the lowest income have seen a rise in what they take home in real terms over the last ten years.

In-work poverty The working poor are those individuals and families who maintain regular employment but remain in relative poverty due to low levels of pay and dependent expenses. This group contains non-working household members such as children and non-working partners.

Combined low income and material deprivation Material deprivation' reflects whether people can afford to buy certain items and participate in leisure or social activities. This measure is applied to households with incomes below seventy per cent of average income to create the 'material deprivation and low income combined' indicator. This indicator aims to provide a measure of living standards which, unlike relative and absolute poverty, is not solely based on income.

Persistent poverty This is defined as being in relative poverty in three out of the last four consecutive years. This measure is designed to detect people who are consistently in poverty over a long period, rather than those which dip in and out of poverty. 

"People are said to be living in poverty if their income and resources are so inadequate as to preclude them from having a standard of living acceptable in the society in which they live. Because of their poverty they may experience multiple disadvantage through unemployment, low income, poor housing, inadequate health care and barriers to lifelong learning, culture, sport and recreation" European Commission, Joint Report on Social Inclusion 2004