Köyhyysraja

Köyhyysraja is a Finnish term meaning the poverty line. In Finland it denotes a relative threshold used to identify households and individuals whose income is low relative to the rest of the population. The standard Finnish poverty line is defined as 60 percent of the median equalized disposable income in the country, following the European Union's relative-poverty methodology. The threshold is calculated annually by Statistics Finland, using data from EU-SILC and national registers. Income is measured after taxes and transfers (disposable income) and is adjusted for household size and composition with the OECD-modified equivalence scale.

The poverty rate measured by köyhyysraja is the share of people whose equalized disposable income falls below the threshold. The measure is used to monitor poverty trends, evaluate the impact of social benefits and tax policies, and inform social-policy discussions. It is one of several indicators of living standards and inequality.

Limitations: As a relative measure, köyhyysraja depends on overall living standards and may not fully capture material deprivation or non-monetary hardships. It can also be affected by wealth, debt, housing costs, and regional price differences. The concept is primarily used for statistical comparisons and policy analysis, rather than to determine individual eligibility for assistance.

See also: at risk of poverty, social welfare, EU-SILC, Statistics Finland.