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Income Distribution and Poverty


Budget 2022 should embrace the need for new approaches to how we as a society prioritise choices. People, well-being, public services and a widespread and fair recovery must be Government priorities.  Yet, as we edge ever closer to Budget day, news reports suggest discussions within Government are focused on proposals that are far from fair. 


Social Justice Ireland is calling on Government to increase in 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 must not to leave those on social welfare behind for a third successive budget. 


Social Welfare Rates: Budget 2022 outlines the case for Benchmarking and Indexation of Social Welfare Rates in Budget 2022.

‘Ireland and the Europe 2020 Strategy - A review of the social inclusion aspects of Ireland’s National Reform Programme’ covers three of the five headline targets established in the Europe 2020 Strategy and addressed in the Irish National Reform Programme, namely, employment, education and ‘poverty and social exclusion’.  It is the latest in a series that since 2011 has tracked Ireland’s performance on achieving its own targets in the Europe 2020 Strategy.


Social Justice Ireland’s report ‘Ireland and the Europe 2020 Strategy - A review of the social inclusion aspects of Ireland’s National Reform Programme’ has found that overall, current trends in Irish public policy are running counter to the promotion of ‘inclusive growth,’ which is one of the three key priorities which underlie the Europe 2020 Strategy. 
 


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.  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.


How we plan our finances, and what we choose to prioritise, post-Covid-19, will have profound implications for the future of our economy and society. To this end Social Justice Ireland proposed to the Select Committee on Budgetary Oversight that the priorities for Budget 2022 should be adequate social welfare rates and poverty reduction, just taxation, housing for all and tackling unemployment. 


Poverty Focus examines the nature and experience of poverty in Ireland and sets out a series of solutions that could be adopted by Government.  Each year Poverty Focus highlights one area of concern while also commenting on the general policy landscape.  This year we pay particular attention to the impact of social welfare rates on low income households.


More than 15% of all those in poverty in Ireland have a job while more than a quarter are children.  This is one of the main findings of Social Justice Ireland’s latest study ‘Poverty Focus 2021’.  This scandalous situation persists despite the reduction in poverty rates in recent years.  While progress in reducing poverty is welcome, Government’s failure to raise core social welfare rates in the last two Budgets will see this progress reversed.


One of the key tools at our disposal to reduce poverty is social welfare. If Government is serious about reducing poverty and meeting the targets set out in the Roadmap for Social Inclusion then the first step must be to benchmark social welfare rates to 27.5 per cent of average earnings, and to do this over either one or two budgetary cycles.

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