The sheer scale of the numbers of people living in poverty is worrying, particularly when we consider the impact of the Government pandemic income supports in cushioning households from the worst effects of the pandemic. Today’s figures show we are not making sufficient progress in addressing poverty and social exclusion. The scale of poverty is still far too high and presents serious policy challenges as Government continues to fail to give poverty reduction the priority it requires and people deserve. In addition, the number of people experiencing deprivation, including one in six children is a clear sign that despite several years of sustained economic growth, many people’s circumstances have not improved at all.
Government has again shown that it has no clear, comprehensive strategy to tackle poverty, social exclusion and vulnerability. Today’s numbers clearly show that Government, to date, has failed to commit to leaving nobody behind.
Impact of social welfare payments on poverty
Social welfare payments play a crucial role in reducing poverty. Today’s figures show that without the social welfare system almost four in every ten of the Irish population would have been living in poverty. However, welfare payments reduced the poverty rate by 27 percentage points to 11.6 per cent.
Social Justice Ireland called on Government to increase core social welfare rates by €10 per week in Budget 2022 and to commit to benchmarking core social welfare rates to 27.5 per cent of average earnings over two years. Government’s failure to heed either of these proposals means that many of those depending on social welfare payments will fall further behind the rest of society in the years ahead as today’s CSO figures indicate.
A lesson from past experiences of economic recovery and growth is that the weakest in our society get left behind unless welfare increases track increases elsewhere in the economy. Today’s figures show that households on the lowest incomes are falling further behind. Delivering a fair recovery means that no-one should be left behind, especially those who are most vulnerable. When Budget resources are focused on the welfare system they assist those who need most help. Conversely, when a Budget provides limited resources to the welfare system, as Government did in Budget 2022, it undermines the living standards and needs of the weakest in our society.
The CSO figures show that in-work poverty is 4.4%. This equates to approximately 93,000 people in employment living below the poverty line. Many working families on low earnings struggle to achieve a basic standard of living. Specific interventions are required to tackle the issue of the ‘working-poor’. One of the most effective policy interventions would be to make tax credits refundable. Until Government makes tax credits refundable, it will not have an efficient mechanism by which it can address the issue of the working poor.
The previous two Budgets did little to help low income families” she said. “A couple with one earner on €30,000 per year saw an increase of just 39c in total. This situation is even worse for a couple with one earner on €30,000 with two children who would have significantly higher costs, but who also only received an increase of 39c.
The in-work poverty figure has remained consistently about 100,000 for several years now, indicating that in-work poverty is a trend which policy-makers and successive Governments have thus far failed to make any impact on. The idea of a job as an automatic poverty reliever is clearly contradicted by our analysis. The job must be well paid with decent conditions. In Budget 2022 Government chose not to make tax credits refundable, meaning families and individuals on low pay were left behind.
Deprivation and difficulty making ends meet
The deprivation figures published today show that over 690,000 people still struggle to achieve a basic standard of living. Combined with the figures released today on income, these trends are very concerning and require immediate action.
Four in ten households reported difficulties in making ends meet in 2021. Looking at different households types, almost sixteen per cent households with one adult and children reported great difficulty in making ends meet. Arrears was also a challenge for households on low incomes. One in five households at risk of poverty missed a mortgage or rent payment, and sixteen per cent of households in poverty had arrears on utility bills in 2021. The recent increases in the cost of living will have a detrimental impact on these households.
Children are one of the most vulnerable groups in any society. The issue of child poverty deserves particular attention. In 2021, 164,000 children lived in households that were below the poverty line. One in six children (204,710) were living in households experiencing deprivation. This just is not acceptable. The fact that such a large proportion of our children are living below the poverty line has obvious implications for the education system, for the success of these children within it, for their job prospects in the future and for Ireland’s economic potential in the long-term.
Also a cause for concern are the very high poverty rates for those unable to work due to long-standing health problems. This group again have the highest risk of poverty in the State at 39.1%. There is a very strong case to be made for the implementation of a cost of disability payment for this cohort, and improved services and other supports detailed in the ‘The Cost of Disability in Ireland – 2021’ report. The Department of Social Protection must act on the findings of this report and implement the recommendations.
Cost of living
Today’s figures give us an insight into the true impact of the cost of living crisis which continues to impact most on those on the lowest incomes. These are the people and families who were left behind in Budget 2022, who were struggling to make ends meet before the spike in inflation and energy costs, and who are now falling further behind. These households must be prioritised in Budget 2023 and Government must commit to benchmarking core social welfare rates to 27.5 per cent of average earnings over two years.
If poverty and deprivation rates are to fall in the years ahead, Social Justice Ireland believes that in the period ahead Government, and policymakers generally, should:
- Acknowledge that Ireland has an on-going poverty and deprivation problem.
- Adopt targets aimed at reducing poverty and deprivation among particularly vulnerable groups such as children, lone parents, jobless households, and those in social housing.
- Examine and support viable alternative policy options aimed at giving priority to protecting vulnerable sectors of society.
- Benchmark core social welfare rates to 27.5 per cent of average weekly earnings.
- Carry out in-depth social impact assessments prior to implementing proposed policy initiatives that impact on the income and public services on which many low-income households depend. 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 the 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 poverty and social exclusion of people with a disability.
- Recognise the reality of poverty among migrants and adopt policies to assist this group. In addressing this issue, replace direct provision with a fairer system that ensures adequate allowances are paid to asylum seekers.
- 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.
- Move towards introducing a 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.
The 'Survey on Income and Living Conditions (SILC) 2021 Results' on which these numbers are based, was published today by the CSO.