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Minimum social welfare rates should increase by €10 in Budget 2022
Social Justice Ireland is proposing a €10 increase in core social welfare payments in Budget 2022. This would set Government on the correct path to benchmark social welfare rates to 27.5 per cent average weekly earnings over a two-year period, which was the standard set in 2007.
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. Given the very difficult situation people across the country are in as a result of Covid-19, benchmarking minimum rates of social welfare payments to movements in average earnings is an important policy priority.
Budget 2021 was the second budget in a row which failed to deliver an increase to the minimum social welfare payment. A repetition of this failure in Budget 2022 would leave those who are most vulnerable in a very difficult position and see them fall further behind. Delivering a fair recovery means that no-one should be left behind, especially those who are most vulnerable.
Even after the provision of social welfare payments, in 2019 (the latest data available) there were almost 630,000 people in Ireland living below the poverty line. Of these almost 190,000 were aged under 18. The Covid-19 crisis has highlighted a number of aspects of the welfare state and the importance of properly provided and funded public services in countries across the world.
Among the many lessons in this country, the crisis has highlighted the importance of the social safety net that is our social welfare system. The benchmark of 27.5 per cent of average earnings is so important to the living standards of many in Irish society, and to meeting out own anti-poverty commitments.
Government should commit to this benchmark in Budget 2022 and increase core social welfare rates by €10.
Summary of Social Justice Ireland proposals for Social Welfare:
- Minimum Social Welfare rates: Minimum social welfare rates should increase by €10 per week in Budget 2022. This would see the basic social welfare rate rise to €213 in Budget 2022.
- State Pension contributory and non-contributory: Introduce a single-rate universal state social welfare pension from January 2022 at the rate of €258.30.
- Carer’s Support Grant: Increase the annual Carer’s Support Grant to €2,000 and extend the Carers GP Visit Card to those in receipt of Carer’s Support Grant.
- Domiciliary Care Allowance: Increase the domiciliary care allowance from €309.50 to €330. Expand the Free Travel Scheme to include people in receipt of the Domiciliary Care Allowance.
- Jobseekers rates – under 25: Continue the process started in Budget 2020 and equalise Jobseekers rates for all those under 25 at the increased rate of €210 per week.
- Cost of Disability: Introduce a cost of disability payment of €20 per week.
- Supporting a Universal Basic Income (UBI) Pilot: Budget 2022 should commit to introducing a universal basic income pilot and funding the evaluation process to accompany it.
Social Welfare Benchmark
Just over a decade ago, Budget 2007 benchmarked the minimum social welfare rate at 30 per cent of Gross Average Industrial Earnings (GAIE). Today that figure is equivalent to 27.5 per cent of the new average earnings data being collected by the CSO. In 2021 the updated value of 27.5 per cent of average weekly earnings equals €222 implying a shortfall of €19 between current minimum social welfare rates (€203) and this threshold. Budget 2022 should increase current minimum social welfare rates by €10 per week with a view to equalising the rates with the benchmark (27.5 per cent of average weekly earnings) over a two-year period.