Loss of a Spouse As a Poverty Risk

The death of a spouse is one of the most stressful changes in one’s life. Spouse’s death increases the morbidity as well as mortality of widows and widowers. The explanation is the lack of social support because the family is generally regarded as a primary source of support. One important aspect is also what happens to the income after the death of a family breadwinner. All these three factors -physical, psycho-social and financial – have a substantial impact in widows and widowers wellbeing.

In Finland after the death of a family breadwinner the income of the surviving family members consists of widow's and orphan's pension. The initial pension and the basic amount of the orphan's pension paid from the national pension scheme are paid regardless of income. The survivors' pension paid from the earnings-related pension scheme comprises the surviving spouse's pension and the orphan's pension. A child of the deceased will receive an orphan’s pension until the age of 18. The survivor’s pension act came into force in 1967in earnings related pension system and in national pension in 1969. Both were reformed last in 1990.

In this study we use register data of statutory pensions. Roughly 282,000 people were paid survivors’ pension at the end of 2012, of which 261,000 were widows or widowers and 21,000 were children. Men's share of the pensions is 17 percent. Most of the surviving spouse's pension recipients are women over the age of 65. Also widowers are mostly old. The poverty risk of widows and widowers is high, of those who draw old-age pension 38 per cent live under poverty line whereas of all pensioners under poverty line live 22 per cent. Right after spousal loss the income in family decreases about 20 per cent compared to  pre-loss income.