40% of pensioners with migrant backgrounds live in poverty in Netherlands

A large and rapidly growing group of retirees with non-Western migration backgrounds in the Netherlands is living below the poverty line because many did not qualify for a full state pension and built up little or no supplementary retirement savings, RTL reports.

Researchers say 40 percent of pensioners from Morocco and Turkey live in poverty. That rate is also expected in coming years for retirees from Afghanistan, Iraq and Poland. It compares with just 3 percent to 6 percent among retirees without a migration background or those with a Western European migration background.

The government’s basic state pension, known as the AOW, is accrued based on years lived in the Netherlands. A full benefit requires 50 years of residency. For each year short of that, the payment is cut by 2 percent. Someone who lived in the Netherlands for 40 years, for example, receives 20 percent less AOW. Many in this group arrived later in life and also worked in sectors that offered low or no extra pension.

Jelle Lössbroek of the Netherlands Interdisciplinary Demographic Institute, or NIDI, who has researched pensions for these groups, said lower lifetime earnings and weaker pension accrual in those industries left many vulnerable.

“In the years that they were working, they often earned fewer euros per hour than Dutch people without a migration background, for various reasons on the labor market,” Lössbroek said. “Moreover, they also often receive less pension, because in those sectors you build up less pension per earned euro.”

The number of retirees with migration backgrounds stood at about 200,000 at the start of this century. It has since doubled to 400,000 and is projected to reach 900,000 by 2050. Not all will fall below the poverty line — set at 1,500 euros a month for a single person and 2,000 euros for a couple — but the strongest growth is expected in the most vulnerable group.

Pension poverty is bringing stress and shame that lead to health problems and loneliness. Adult children often feel pressure to help pay fixed living costs; one man named Tarik helps his mother with her bills.

The government offers a safety net called the Supplementary Income Provision for the Elderly, or AIO. But this group rarely uses it. At least one-third of those eligible are either unaware of the program or afraid to apply, Lössbroek said.

Tarik Uçar, a board member at the Cleaning Industry Pension Fund, sees thousands of members fall below the poverty line after retirement. He tries to increase awareness of the AIO but runs into deep reluctance.

“If people do know the AIO there is often a great fear that they have to repay it, or that your allowances will be cut,” Uçar said. “That comes partly due to the benefits affair. That fear is so great that they refrain from applying.”

Lössbroek called the expansion of the problem worrying. “We have agreed together on the poverty line,” he said. “We actually want no one to fall below it. That is the bottom line.”