Government must immediately provide for an additional €8 per week (€20 in total) in core social welfare rates in the Social Welfare Bill 2022

Posted on Monday, 17 October 2022
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One in nine people in Ireland lives in poverty.  Budget 2023 widened the gap between those on core welfare rates and those on €100,000 by €199.   Consequently, Social Justice Ireland calls on Government in the forthcoming Social Welfare Bill to raise core social welfare rates by a further €8 a week, thus providing them with the basic increase of €20 a week that was required in Budget 2023 to simply maintain their current position. 

The €12 increase in core social welfare rates in Budget 2023 lags behind anticipated inflation for necessities in the coming year. A €20 boost was the minimum required to set Government on the path to benchmark rates to 27.5% of average weekly earnings over a two-year period. Budget 2023’s increase falls far short of achieving this modest target, leaving those on social welfare with less than a quarter of average weekly earnings.


Welfare payments and poverty

Poverty Focus 2022 analyses the contribution that increases to welfare payments and supports have made to recent reductions in the headline poverty risk measure.  Social Justice Ireland warmly welcomes progress in reducing Ireland’s overall poverty rate. However, the underlying trends in the income distribution; where there are small nominal increases in welfare alongside more pronounced increases in earnings and reductions in income taxation are likely to widen income divides and push poverty upwards. 

Social Justice Ireland has consistently argued for the prioritisation of low-income welfare dependent families in Budgetary policy and as our findings show, prioritising these families works, and leads to reductions in poverty. Unfortunately, the three most recent Budgets have shifted away from this approach; meaning much of the recent progress will be reversed.  More needs to be down to target low-income households.

The impact of inflation is most severe on lower-income households. Short-term Budgetary measures, while welcome, will increase inequality if income adequacy is not properly addressed. Following the announcement of Budget 2023, Social Justice Ireland continues to call on Government to increase core social welfare rates by the full €20 per week necessary to cover the cost of inflation as a move towards benchmarking social welfare rates. This requires the provision of an additional €8 per week to what was allocated in Budget 2023, in the Social Welfare Bill 2022.


Cohorts at high risk of poverty

In Poverty Focus 2022 we pay particular attention to the group in our population who face the highest risk of experiencing poverty, those with long-term illnesses or disabilities.

People who are unable to work due to an illness or disability have the highest risk of poverty in Irish society with almost two in five people in this cohort living in poverty. This group is being left further behind, with poverty increasing among those unable to work due to an illness or disability despite a welcome reduction in the overall poverty rate in recent years.

There is an on-going need for targeted policies to assist this group, starting with the introduction of a cost of disability payment. It seems only logical that if people with a disability are to be equal participants in society, the extra costs generated by their disability should not be borne by them alone. Society at large should act to level the playing field by covering those extra but ordinary costs. Doing so would also address the very high poverty rates among this group.


Poverty Focus 2022: Main findings

  • One in every nine people in Ireland lives on an income below the poverty line (11.6% of the population). Based on the most recent Census data, this corresponds to almost 595,000 people.
  • Those not employed due to permanent illness or disability are one of the groups at highest risk of poverty with almost two in five of this group (39.1 per cent) classified in this category.  This group’s at risk of poverty rate is eight times that of workers, three times that of the retired and three times that of children.
  • The 2021 CSO SILC survey indicates that 13.5 per cent of children were at risk of poverty. Translating this percentage into numbers of children implies that in 2021 around 160,000 children lived in households that were experiencing poverty. The scale of this statistic is alarming.
  • When poverty is analysed by age the 2021 figures show that 11.9 per cent of those aged above 65 years live in relative income poverty - about 71,000 pensioners.
  • About 93,000 workers are living at risk of poverty, 4.4 per cent of those who are employed.  Poverty figures for the working poor have shown little movement over time reflecting a persistent problem with low earnings.
  • Data for the period 2016-2021 demonstrate how the headline poverty rate in Ireland has fallen, driven in particular by increased supports to welfare dependent households.
  • Targeted measures that prioritise those households with the least resources and the most needs can yield welcome poverty reductions. However, these anti-poverty interventions need to be sustained; something than has been lacking in recent budgetary policy.

Reducing Poverty – policy priorities

Social Justice Ireland believes that in the period ahead Government and policy-makers generally should:

  • Immediately provide for an additional €8 per week (€20 in total) in core social welfare rates in the Social Welfare Bill 2022.
  • Acknowledge that Ireland has an on-going poverty problem.
  • Adopt targets aimed at reducing poverty among particular vulnerable groups such as children, lone parents, jobless households and those in social rented housing.
  • Examine and support viable, alternative policy options aimed at giving priority to protecting vulnerable sectors of society.
  • Carry out in-depth social impact assessments prior to implementing proposed policy initiatives that impact on the income and public services that many low-income households depend on. This should include the poverty-proofing of all public policy initiatives.
  • Recognise the problem of the ‘working poor’. Make tax credits refundable to address the situation of households in poverty which are headed by a person with a job.
  • Support the widespread adoption of a Living Wage so that low paid workers receive an adequate income and can afford a minimum, but decent, standard of living.
  • Introduce a cost of disability allowance to address the poverty and social exclusion of people with a long-term illness or disability.
  • Recognise the reality of poverty among migrants and adopt policies to assist this group. Including the full implementation of the White Paper on the Elimination of Direct Provision.
  • Accept that persistent poverty should be used as the primary indicator of poverty measurement and assist the CSO in allocating sufficient resources to collect this data.
  • Introduce a universal basic income system. No other approach has the capacity to ensure all members of society have sufficient income to live life with dignity.
  • Acknowledge the failure to meet repeated policy targets on poverty reduction and commit sufficient resources to achieve credible new targets.

Poverty Focus is available to download here.