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Indexation of Social Welfare Rates
Our paper on Indexation and Social Welfare Rates outlines Social Justice Ireland’s position on indexation, makes proposals regarding maintaining adequate levels of social welfare and indexation, and it also reviews the process by which the basic social welfare payment became benchmarked to 30 per cent of Gross Average Industrial Earnings.
Among the main findings are:
- Social transfers play a huge role in addressing poverty in Ireland.
- The commitment in the National Action Anti-Poverty Strategy to the indexation target of the Social Welfare Benchmarking and Indexation Working Group in 2002 was very welcome and was one of the few areas of the anti-poverty strategy that was adequate to tackle the scale of the poverty, inequality and social exclusion being experienced by so many people in Ireland today.
- The increase in social welfare over the period 2003-2007 yielded noticeable reductions in poverty, with the largest increases delivering the greatest reductions.
- In 2019, as talk of wage increases and income tax cuts continues, it is important that adequate levels of social welfare be maintained to ensure that the mistakes of the past are not repeated.
- A lesson from past experiences of economic recovery and growth is that the weakest in our society get left behind unless welfare increases keep track with increases elsewhere in the economy. Indexation of minimum rates of social welfare payments to movements in average earnings is therefore an important policy priority.
- We need to look beyond 30 per cent of Gross Average Industrial Earnings / 27.5 per cent of Average Weekly Earnings so as to bring social welfare rates closer to the Minimum Essential Standard and the EU-recognised poverty line.