The Social Insertion Income is no longer able to protect the most vulnerable families: today it only covers around 40% of the poverty threshold, reveals a new study by ISCTE – Instituto Universitário de Lisboa, “The Erosion of the Portuguese Minimum Income Protection Regime”, released this Wednesday.
The investigation, conducted by Luís Manso, Renato Miguel Carmo, Maria Clara Oliveira and Jorge Caleiras, followed the evolution of the value of the RSI between 2010 and 2023 and its ability to protect those who depend on this benefit from poverty.
In 2010, the benefit guaranteed between 60% and 80% of the poverty threshold; in 2023, this value dropped to around 40%, which reveals, according to the authors, “a structural weakening of the main instrument for combating social exclusion in Portugal”.
“Erosion results from periods of austerity”
This “erosion”, explains the study, included in the new special issue of the scientific journal “Social Inclusion”, coordinated by Iscte and dedicated to the implementation of the European Pillar of Social Rights —, results from “successive legislative changes and periods of austerity”.
One of the main factors identified is the replacement of the minimum wage as an update reference by the Social Support Index (IAS). The authors emphasize that, “in the last five years, the minimum wage increased by approximately 30%” and that the RSI values “did not follow this increase”. “Essentially, this shows that the change from an update mechanism indexed to the minimum wage to an IAS-based mechanism has had a profound effect on the potential adequacy of the RSI, particularly as the IAS has not increased at the same rate as the minimum wage in recent years.”
The study also points to the tightening of access and calculation criteria — from broader definitions of what counts as income, to asset limits and “less generous” equivalence scales —, measures that reduced eligibility and the number of beneficiaries, and reduced the amounts, affecting the “generosity” of the program and contributing to the “erosion” of the benefit.
Number of beneficiaries “is one of the lowest ever”
“If we add to this the fact that the number of RSI beneficiaries is among the lowest ever, we are faced with a benefit that has greatly eroded its ability to respond to the basic needs of people living in poverty”, says Renato Miguel Carmo, professor at Iscte, one of the authors of the study and director of the Observatory of Inequalities.
During the troika period, “benefits were frozen and the number of beneficiaries fell drastically”, explains the researcher, quoted in the statement. Even with some reversals starting in 2016 and with exceptional measures taken during the pandemic and the inflationary crisis, “the RSI never recovered its capacity to ensure a decent standard of living”.
The sharp increase in the cost of housing further aggravated this loss of protective capacity. In practice, the minimum income stopped following the rise in prices and wages, “aggravating the inequality between those who earn the national minimum wage and those who depend on social support, such as the RSI”.
Faced with this scenario, the authors of the study consider that a reformulation of the RSI is “necessary”, so that it can once again fulfill its role as a safety net and better monitor the current reality, marked by higher prices and changes in the job market. Among the suggested measures are the “recovery of the link to the minimum wage” and the “creation of calculation criteria that are more sensitive to family composition and variations in the cost of living”.
The study will be presented at the 4th Conference of the SocioDigital Lab for Public Policy, at ISCTE, which takes place this Wednesday and Thursday, under the theme “Five years of the European Pillar of Social Rights: From diagnoses to policies”.