Social Welfare Bill must increase core social welfare rates by €8
Posted on Wednesday, 9 November 2022
Social Welfare rates must be increased by an additional €8 a week in the forthcoming Social Welfare Bill. If they are not, then Government is simply abandoning the poorest in our society. Despite the spin around measures in the Budget, people reliant on social welfare for their income will be worse off in 2023 than they were this year. We know that people on the lowest incomes, those in the bottom twenty per cent of society are those who are most impacted by rising costs. These households are more exposed to price increases because they have no choice but to spend most if not all of their income, they also spend a far greater proportion of their income on food and energy than better off households, and they have limited, if any at all, financial reserves or savings.
Households on fixed incomes
There is a large concentration of people on fixed incomes in the bottom twenty cent of the income distribution. People who are unemployed, long-term ill or disabled, living alone, and single parents. These people are really struggling, and the very minimum they needed in the Budget was a €20 increase in core social welfare rates.
Much fanfare has accompanied the recent announcement by Minister McGrath and Minister Humphreys of the payment dates of the one-off lump sum measures for social welfare recipients. While these measures are welcome, by their nature one-off supports cannot tackle the embedded low income culture that has prevented our republic from eliminating poverty. An additional ‘double week’ payment to those on social welfare is welcome but is simply a one-off event. It fails to benchmark social welfare rates to ensure they provide a minimally adequate standard of living. It also fails to compensate for the rise in the cost of living particularly in recent months. In reality, social welfare recipients will be worse off next year than they are now.
One- off payments not the answer
Government’s focus on one-off payments in Budget 2023 cannot conceal that those on the lowest incomes (social welfare and low pay) will fall further down the income ladder once the one-off elements of the Budget have been worked through. A more generous increase in core weekly rates would enable households to buy essentials routinely and not as treats. In addition, Government’s focus assumes that all will be well for low-paid workers and welfare-dependent households next year. This is a huge gamble that is highly likely to backfire on the least well-off among us. It is gambling with the standard of living of Ireland’s poorest and most vulnerable people and is totally unacceptable as a strategy.
Poverty is never simply about income. But it is always about income. The government is continuing to betray the social contract that, at critical times in the past, generated solidarity and social cohesion in this republic. Income inadequacy is not a one-off problem and cannot be resolved by a one-off payment. A social welfare payment should provide an adequate safety net to lift people out of poverty. This is even more critical considering increases to the cost of essentials such as rent, energy, heat and food. The standard of living that social welfare payments can provide is dramatically reduced when the cost of living rises.
Impact of rising prices
Every household is experiencing rising prices caused by inflation. But not every household is in crisis. It is well documented that low-income homes suffer most: people on low hourly wages or fixed incomes such as welfare entitlements. Supporting these households requires ongoing targeted measures, not one-off payments.
While all help for households is welcome in these challenging times, the mode adopted in the budget leaves a skewed distribution of resources that favours those on higher incomes when one-off measures are taken into account. Government’s decisions in Budget 2023 will see the rich-poor gap grow and the real value of core social welfare rates fall. This is a disgraceful outcome which can be corrected.
Social Welfare Bill
We do not accept aspects of the Budget that widen income gaps, fail to respect Ireland’s most vulnerable people, and leave Ireland’s poorest worse off when Budget 2023’s one-off measures are discontinued. We call on Government to revisit its decisions in these areas and to make the necessary adjustments in the forthcoming Social Welfare Bill to ensure the most vulnerable are prioritised. In particular, we urge Government to increase core social welfare rates by €20 a week in the upcoming Social Welfare Bill. Anything less would mean that Budget 2023 confirms Government has abandoned those who need its help most.