Thousands of families living in 'hidden poverty' as rents almost double in a decade

The report found almost half of the people who report being materially deprived, but who are not classified as being at risk of poverty, lived in a household where someone reported having a disability, with most of these less than €100 per week above the poverty line after accounting for household size. File picture: PA

Almost 70% of people experiencing material deprivation are not classified as being at risk of poverty, according to the ESRI. That means there is "hidden" poverty impacting thousands of households around the country. 

The ESRI's latest report also shows  housing costs — whether rent or mortgage — have a huge impact, with average private rents now almost double their 2012 level. However, income inequality is at new record low.

According to the report: "We estimate that the at risk of poverty rate in 2021 was 15.6% on an after-housing cost basis (amounting to 785,000 individuals) compared to 12.4% on a before-housing cost basis (625,000 individuals).

However, there is a large group of individuals who report being materially deprived but who are not classified as being at risk of poverty. 

We estimate that in 2021, 69% of the 695,000 people experiencing material deprivation — not being able to afford two or more items from a list of 11 essentials — had incomes above the poverty line on an after-housing cost basis. 

"Of these, almost half lived in a household where someone reported having a disability, with most of these less than €100 per week above the poverty line after accounting for household size."

Working poor

The report, Poverty, Income Inequality and Living Standards in Ireland, points to a large group of working poor.

"Although they are at much lower risk of poverty, those living in households where someone of working age is in paid work still make up over one-third of those below the poverty line," it said.

Of the ‘working poor’ group, half are living in rental accommodation, with lone parents accounting for another significant number.

The research was funded by the Community Foundation for Ireland. Writing for the Irish Examiner today, its chief executive Denise Charlton said: "At the heart of the cost-of-living crisis are significant groups of people who are really struggling to make ends meet but yet are not officially recognised as being at risk of living in poverty.

People with disabilities, renters and lone parents are among those who are most likely to being overcome by bills, but whose reality is not captured by official figures.

Ms Charlton also said disregarding rent or mortgage costs when measuring a family or individual’s disposable income is "questionable".

Barra Roantree, an economist at the ESRI and an author of the report, said the housing issue would need a sustained increase in supply, particularly of social and cost-rental housing, while Paul Redmond, economist at the ESRI and co-author, pointed out the working poor were also disproportionately reliant on someone earning the minimum wage, and increasing the minimum wage would have "limited impact".