Caritas Malta Report: Essential Living Costs for 2024

Caritas Malta has recently released a critical report detailing the minimum income necessary for a family to maintain a “decent life” in Malta. This report, the fourth edition of the Minimum Essential Budget for a Decent Living (MEBDL) for 2024, provides an essential overview of the financial needs required for various household types to sustain basic living standards.

Understanding the Minimum Income Requirements

The Caritas Malta study underscores a pressing issue: the significant gap between the income needed to achieve a decent standard of living and the actual income levels of many Maltese families. According to the latest figures, a family of four—comprising two adults and two children—requires an annual income of at least €19,153. This figure is essential to cover fundamental living expenses and maintain a basic quality of life in Malta.

The MEBDL 2024 report aims to provide a detailed analysis of the financial requirements for different household configurations, presenting an updated perspective on maintaining a basic standard of living. The findings build on previous research while incorporating recent economic conditions to offer a current snapshot of financial needs.

Insights from the National Statistics Office (NSO)

The National Statistics Office (NSO) has released its 2023 Survey on Income and Living Conditions, revealing a concerning economic situation in Malta. The survey highlights that over 105,000 individuals, nearly one in five Maltese, were at risk of poverty or social exclusion last year. Specifically, 88,462 individuals, representing 16.6% of the population, were living below the at-risk-of-poverty threshold of €11,364.

This data paints a stark picture of economic disparity in Malta, underscoring the need for a more comprehensive approach to addressing poverty and social exclusion. Civil society groups have long advocated for a “national living income” that could exceed €30,000 annually for families of four, a figure that is nearly triple the current minimum wage. Even conservative estimates suggest that a living income for single adults should be at least 30% above the current minimum wage.

Despite these pressing concerns, the Maltese government has been cautious in implementing substantial minimum wage increases. The government has approved only modest annual increases of 3%, which continue to fall short of addressing the rising costs of living. This conservative approach to wage increases exacerbates the financial challenges faced by many families.

Economic Disparities and Government Response

The growing concentration of wealth and the widening gap between incomes and living costs present a challenging economic landscape. The NSO data highlights a stagnation in poverty rates, coupled with a growing disparity between the wealthy and the rest of the population. These findings challenge the government's claims of successfully alleviating national hardship and reveal a troubling trend of individuals falling through the cracks of society.

The Caritas Malta study provides a detailed breakdown of the financial needs for various household types, offering two primary budget categories: the Basic Basket and the Augmented Basket.

The Basic Basket: Essential Living Costs

The Basic Basket is designed to cover essential living costs and includes eight categories:

• Food: A substantial portion of the budget is allocated to food expenses, reflecting its importance in maintaining a basic standard of living.
• Clothing: Regular clothing purchases are included to ensure families can meet their basic needs for apparel.
• Personal Care: This category covers basic personal care items and services, such as hygiene products and haircuts.
• Health: Basic health expenses are included, covering essential medical care and health-related services.
• Household Goods and Maintenance: This category encompasses essential household items and maintenance costs to keep a home in functional condition.
• Education: Costs associated with education, including school supplies and other educational expenses, are covered.
• Culture and Gifts: This category includes expenditures on cultural activities and occasional gifts.
• Transport: Basic transportation costs are accounted for, ensuring families can travel for work, school, and other essential activities.
• Subsidised Social Housing: This includes costs related to subsidised housing, ensuring families have access to affordable living accommodations.

For the year 2024, the Basic Basket indicates that a family of four needs at least €19,153 annually. This figure represents the minimum income required to meet basic living standards.

The Augmented Basket: Additional Lifestyle Costs

The Augmented Basket includes additional lifestyle elements that go beyond basic living expenses. This expanded budget accounts for:

• Dining Out: An allowance for dining out once a month, reflecting a modest lifestyle upgrade.
• Car Ownership: Costs associated with owning and maintaining a car.
• Unsubsidised Rental Accommodation: Expenses related to renting a home without subsidies.
• Occasional Food Delivery: Budgeting for occasional food delivery services.
• Pet Care: Costs associated with owning and caring for pets.

Under the Augmented Basket criteria:

• A family of four requires €33,176.50 annually.
• A single parent household's requirements rise to €30,724.33.
• An elderly couple would need €26,556.29 annually.

Food expenses continue to be the most significant component of the budget, accounting for between 30% and 56% of total costs across all household types. This highlights the considerable financial burden that food costs impose on household budgets.

Methodology and Objectives of the MEBDL 2024 Study

The MEBDL 2024 study was conducted between February and May 2024. The research methodology remains consistent with previous editions, focusing on two primary objectives:

• Reviewing and Updating Essential Components: The study reviews and updates the essential components needed to maintain a decent standard of living.
• Calculating Minimum Budgets: The study calculates minimum budgets required for three low-income household types, providing a comprehensive overview of financial needs.

The study considers adults aged 30 to 45 years and children of primary or secondary school age (9-15 years). This focus ensures that the findings are relevant to a broad range of households, providing valuable insights into the financial needs of different family configurations.

Policy Recommendations and Social Impact

The MEBDL 2024 report includes 31 policy recommendations spanning various areas, including:

• Initiatives: Proposed initiatives to address income inequality and support low-income families.
• Education: Recommendations for educational programs aimed at improving financial literacy and access to opportunities.
• Research: Suggestions for further research to better understand the economic challenges faced by low-income families and develop effective solutions.

Caritas Malta aims for the MEBDL 2024 to offer a comprehensive picture of decent living standards for low-income families in Malta. The ultimate goal is to inspire policies that promote social justice, economic equality, and sustainable, dignified living.

Additional Insights on Costs for Families with Young Children

The report also includes a smaller study on one-time and recurring costs for families with babies or young children. While these costs are not incorporated into the Basic Basket calculations, they provide valuable insights into the financial pressures faced by families with young children.

The study highlights additional expenses such as:

• Childcare Costs: The financial burden of childcare services for working parents.
• Baby Supplies: Costs associated with essential baby supplies, including diapers, formula, and clothing.
• Healthcare: Additional healthcare expenses for young children, including vaccinations and regular check-ups.

These additional costs underscore the financial challenges faced by families with young children and emphasize the need for targeted support and policies to address these challenges.

Conclusion

Caritas Malta's MEBDL 2024 report highlights the significant disparity between current minimum wages and the actual cost of living. As economic pressures continue to mount, the need for substantial policy changes becomes increasingly urgent. The data underscores the importance of addressing income inequality and ensuring that all families can maintain a decent standard of living.

The findings reveal a troubling trend of economic disparity and highlight the challenges faced by low-income families in Malta. By providing a comprehensive overview of financial needs and policy recommendations, the MEBDL 2024 report aims to inspire meaningful change and promote a more equitable and just society.

FAQs

What is the Minimum Essential Budget for a Decent Living (MEBDL) for 2024?
The MEBDL for 2024 outlines the minimum income required for various household types to maintain a basic standard of living in Malta.

How much does a family of four need annually according to the Caritas report?
A family of four needs at least €19,153 annually to cover basic living expenses, according to the Caritas report.

What does the Basic Basket include?
The Basic Basket includes food, clothing, personal care, health, household goods and maintenance, education, culture and gifts, transport, and subsidised social housing.

How does the Augmented Basket differ from the Basic Basket?
The Augmented Basket includes additional lifestyle elements such as dining out, car ownership, unsubsidised rental accommodation, occasional food delivery, and pet care.

What is the minimum income required for a single parent with two dependent children?
A single parent with two dependent children needs €17,012.83 annually to meet basic needs.

How much does an elderly couple require annually according to the study?
An elderly couple requires €14,731.79 annually according to the Caritas study.

What role does food expense play in the household budget?
Food expenses are the most significant component, accounting for between 30% and 56% of total costs across all household types.

When was the MEBDL 2024 study conducted?
The MEBDL 2024 study was conducted between February and May 2024.

What are some policy recommendations included in the report?
The report includes 31 policy recommendations related to initiatives, education, and research aimed at promoting social justice and economic equality.

Does the report cover additional costs for families with young children?
Yes, the report includes a small study on one-time and recurring costs for families with babies or young children, though these are not included in the Basic Basket calculations.