Sean Healy: Government continues to fail on poverty

Tue, 28 Dec, 2021 - 02:00

Dr Seán Healy

The latest Survey on Income and Living Conditions released by the Central Statistics Office (CSO), gives us an insight into the standard of living of people of all age groups across the State.

It also offers an initial indication of the impact of Covid-19 on poverty and deprivation in Ireland.

According to the latest figures, 13.2% of the population is living on an income below the poverty line, approximately 661,518 people.

Of these, 210,363 are children under the age of 18; in addition, one in four children is living in a household experiencing deprivation — families who are going without on a regular basis.

The Wage Subsidy Schemes and the Pandemic Unemployment Payment have helped to support people from the worst economic impact of the pandemic.

Without these emergency income supports the poverty rate would have been 21%. However, the sheer scale of the numbers of people living in poverty is worrying, particularly when we consider the impact of government emergency income supports in cushioning households from the worst effects of the pandemic.

More than 781,000 people are experiencing deprivation — going without essentials on a regular basis.

This is a clear sign that despite several years of sustained economic growth, many people’s circumstances have not improved at all.

Overall, these figures are very concerning, and point to the long-term economic and social impact of the pandemic on households, especially as emergency income supports are reduced or removed.

The CSO figures also highlight the crucial role social welfare payments play in reducing poverty.

Without the social welfare system almost four in every 10 of the Irish population would have been living in poverty; however, social welfare payments reduced the poverty rate from 37.9% to 13.2%.

There is comprehensive research to show that the social welfare system is the key to reducing poverty in Ireland.

Welfare payments target those most in need within Irish society; they also play a central role in alleviating poverty.

When Budget resources are focused on the welfare system, they assist those who need most help; conversely, when a Budget provides limited resources to the welfare system it undermines the living standards and needs of the weakest in our society.

Increased cost of living

Price increases have been making the headlines recently, in particular the increased costs of housing, utilities, and transport.

The fact that almost one in 10 people went without heating due to financial circumstances in 2020 shows the impact that the increased cost of living and energy prices is having on households.

These increased costs come at a time when core social welfare rates have remained unchanged as adjustments made in Budget 2022 will not come into effect until January.

Social Justice Ireland has consistently argued for social welfare rates to be benchmarked to 27.5% of average earnings (just over €222 per week), the standard set in 2007.

We made the case for the gap to be bridged over two budgets, beginning with a €10 increase in core social welfare rates in Budget 2022.

A recent report from the Parliamentary Budget Office shows that the real value of a core social welfare payment (taking into account the impact of inflation) in 2021 was just under €193 per week.

This puts the recent challenges in terms of consumer price increases for people on fixed incomes (State pension, lone parent, jobseekers, or a disability payment) into context.

The Government’s failure to increase core social welfare rates by €10 per week in Budget 2022 and the failure to commit to benchmarking core social welfare rates to 27.5% of average earnings means many of those depending on social welfare payments will fall further behind the rest of society.

Ireland’s national target was to reduce ‘consistent poverty’ (a combined deprivation and poverty indicator) to 2% or less by 2020.

The Survey on Income and Living Conditions data suggests that, yet again, Ireland will miss this target.

Failure to address poverty

Our persistent failure to meet our own poverty targets, and address poverty and deprivation among children, single-parent households, and people with a disability is unacceptable.

If the Government is serious about meeting its own anti-poverty commitments in the Roadmap for Social Inclusion and about delivering a clear, comprehensive strategy to tackle poverty, social exclusion, and vulnerability then it must start by acknowledging that Ireland has an ongoing poverty and deprivation problem.

It must acknowledge the failure to meet repeated policy targets on poverty reduction and commit sufficient resources to achieve credible new targets.

These should include targets aimed at reducing poverty and deprivation among particularly vulnerable groups such as children, lone parents, jobless households, and those in social housing.

The Government should carry out in-depth social impact assessments and poverty-proofing of all public policy initiatives.

To address the situation of households in poverty which are headed by a person with a job, tax credits should be made refundable, and the Government must deliver on the commitment to a Living Wage in the Programme for Government.

Serious consideration must also be given to setting a floor of universal basic income and universal basic services below which nobody should fall if we are to really improve the living standards of all and deliver on the Programme for Government commitment of a new social contract.

A lesson from past experiences of economic recovery and growth is that the weakest in our society get left behind unless welfare increases track increases elsewhere in the economy.

Delivering a fair recovery means that no one should be left behind, especially those who are most vulnerable; this must start with a commitment to benchmarking social welfare payments to 27.5% of average earnings in 2022.