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Absolute poverty means that a person’s income is below the absolute poverty threshold. The threshold is calculated on the basis of equivalised disposable income that takes into account the composition of the household (the weight of the first adult member is 1, the weight of each additional member aged at least 14 years is 0.7 and the weight of everyone under 14 years of age is 0.5), i.e. the total household income is divided by the sum of equivalence scales of household members. The absolute poverty threshold is the estimated subsistence minimum, which represents the financial cost of meeting

The subsistence minimum is the minimum amount of means of subsistence required to cover a person's daily needs. It serves as the absolute poverty threshold. Subsistence minimum is calculated taking into account food and dwelling expenditures and individual non-food expenditures. Subsistence minimum does not include expenditures on alcohol, tobacco products, package tours, the purchase of transport equipment and expenses in restaurants and hotels. The basis for calculating food expenditure is the minimum estimated food basket (2,400 kcal per day). It includes food products that cover a person’s

A person might experience social exclusion if he or she lives at risk of poverty, or below the subsistence minimum, is severely materially deprived or lives in a household where the working-age members have very low work intensity. A low income might contribute to social exclusion: a person cannot afford dwelling essentials or durables, such as to pay rent or utilities, eat nutritious food, take a holiday away from home or buy a car, washing machine or phone. To measure social exclusion and to identify the socioeconomic characteristics of people living in social exclusion, Statistics Estonia