The suspension of water charges helped make October budget of spending rises and mild tax cuts the first for a number of years that “had a progressive flavour” benefiting the lowest income group, the ESRI has found.
Other measures that were not directly linked to the budget package but which helped boost those on low incomes included increases in rent supplements, which had been cut during the deep austerity years from 2011, the study found.
Increases in welfare payments, which had been frozen for a number of years, also played a substantial part in boosting the lowest-income group.
Among family types, lone parents not in employment and unemployed couples gained the most.
It was “the first time in a number of years that [the budget] has had a progressive flavour”, said Professor Tim Callan, one of the report’s authors.
The ESRI stated: “Higher welfare payments helped to ensure that incomes for those relying on social welfare benefits rose in line with general incomes. Changes to rent supplement in advance of the budget and the suspension of water charges mean that percentage gains in income were highest for the lowest income group.”
Specific budget measures announced in October favoured the 10% of households with the lowest income.
Another analysis, on the effects of all measures announced in the calendar year, showed the lowest income group benefited most, “largely due to the suspension of water charges and the increase in maximum rent limits for the rent supplement scheme”.
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