Ireland’s poorest get 20% poorer as richest get 4% richer

Ireland’s poorest families experienced an income drop of almost 20% in one year while income of the richest increased by 4%.

The figures released today by Social Justice Ireland are calculated from the latest CSO data and relate to 2010.

There was a drop of more than 18% in the disposable income bracket (after taxes are paid and social welfare received) for the poorest households during the year.

Social Justice Ireland has blamed government policy for continuing to increase the income of the richest 10% of households and widening the gap between the wealthy and the rest of society.

It says the top 10% of the population receive almost 14 times more disposable income than the poorest 10% — it was eight times more in 1980.

Social Justice Ireland director Sean Healy said the current strategy by the Government was making the situation worse.

“There is something profoundly wrong with government decisions that produce this lop-sided distribution of income favouring the richest when Ireland’s poor and middle income people struggle to make ends meet in these extremely difficult times.”

The independent thinktank is concerned that decisions have been taken that have seriously damaged Ireland’s most vulnerable people.

Mr Healy, an SMA priest, said the Government’s approach to fiscal adjustment — emphasising cuts rather than broadening the tax base — was unjust and unnecessary.

“Decisions have been taken that have seriously damaged Ireland’s most vulnerable people, that place a disproportionate burden on their shoulders, and seriously damage the social infrastructure on which they depend,” he said.

Mr Healy said the Government’s budget last December was likely to make the situation worse because it hit the bottom income level rather than the top.

He pointed out that both Social Justice Ireland and the ESRI had shown that the budget was totally skewed against people on low incomes.

Mr Healy said the Vat change alone — from 21% to 23% — had seriously affected people with the lowest incomes.

Social Justice Ireland has called for an assessment of the impact on society’s most vulnerable people of any proposed policy initiatives aimed at achieving the fiscal adjustments required by the EU/IMF bailout and the Government’s multi-year budgetary plan.

“The Government is facing a very difficult situation but there is a real danger that the policies to deal with it are going to produce a series of worse divisions in Ireland, where the vulnerable are bearing an unfair proportion of the hit,” said Mr Healy.

Over the past two years, Social Justice Ireland showed how the Government’s borrowing reduction target could be reached without the vulnerable taking the major part of the hit.

Mr Healy said: “The Government does have options but it appears that it does not have the protection of the vulnerable as one of its major priorities. It may have it in rhetoric but it certainly does not have it in practice. I think in this area, it is what people do that counts, not what they say.”

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