Report gives stark warning: We’re a welfare nation

We’ve become a welfare nation “overly dependent” on state payments compared to other countries, newly published Government papers have warned.

Almost every person in Ireland benefits, directly or indirectly, from some form of social welfare payment which amount to €20bn a year.

The pre-budget reports, produced by the Department of Finance, have concluded we rely too much on what it calls “monetary social transfers” to address social inequalities.

"Ireland may, compared to other states, be overly dependent on monetary social transfers and that there may be issues to be addressed with regard to the level and distribution of market incomes and the availability of non-monetary social services,” it says.

“Numbers indicate that the payments and services operated by the Department of Employment Affairs and Social Protection (DEASP) impact, either directly or indirectly, on the lives of nearly everybody in the State,” the report says.

There are 1.3m people in receipt of a weekly social welfare payment in respect of two million beneficiaries. A further 625,300 families receive a monthly child benefit payment in respect of 1.2m children.

Of the weekly welfare recipients, 616,200 are in receipt of a pensions payment and 205,560 receive jobseeker’s payments. Some 194,010 received a disability allowance or an invalidity pension and 79,910 were in receipt of carer’s allowance or benefit.

The documents’ findings come a week after Fianna Fáil’s Social Protection spokesman Willie O’Dea called for a further €5 increase in all welfare payments including the old age pension.

The documents show that increasing the pension is one of six possible options outlined for October’s budget, but officials state clearly the impact of such a move in terms of addressing poverty would be “small”.

As opposed to the elderly, the officials argue that attention should instead be focused on lone parents, the unemployed and those living in social housing.

The paper also concluded that the rates of people at risk of poverty have fallen sharply since the financial crash period between 2008 and 2011.

In 2016, social transfers (excluding pensions) reduced the at-risk of poverty rate from 33.6% to 16.5%, or 17.1 percentage points in absolute terms. This represents a poverty reduction effect of 51%,” the report states.

The report offers up six potential options for October’s budget, which is set to approve more than €20bn in welfare spending.

They are:

- A €5 weekly rate increase for pensioners with a proportionate increase for qualified adults at a cost of €160.6m;

- A €5 increase in the living alone allowance, from €9 to €14 weekly, at a cost of €55m;

- A €5 weekly rate increase for all working-age welfare recipients with a proportionate increase for qualified adults at a cost of €189.3m;

- A €5 weekly rate increase in the personal rate of payments for people with disabilities and carers at a cost of €79.3m;

- A €3.20 increase in the increase for a qualified child, from €31.80 to €35 per week at a cost of €56.3m;

- Extend the fuel allowance season by one week (from 27 weeks to 28 weeks) at a cost of €8.6m.

Despite their inclusion in the paper, Social Protection officials rate their likely impact at addressing poverty rates at “small”, “negligible” or “no impact” likely.

In response, Age Action Ireland said more than three quarters of pensioners rely on state payments for the bulk of their income.

“State pension and secondary supports have yet to return to pre-recession level,” a spokeswoman said.

“Most recent EU SILC figures show that one in 10 older people are living in poverty in Ireland. Many more older people survive on incomes only just above the poverty line,” she added.

This story first appeared in the Irish Examiner.

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