Why does official data omit the true extent of Ireland's poverty?

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

The ESRI has found that the ‘working poor’ account for one third of those below the poverty line, of which half are living in rental accommodation with lone parents accounting for another significant number. File photo: iStock

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.

The publication of the Economic and Social Research Institute's (ESRI) Poverty, Income Inequality and Living Standards research in partnership with The Community Foundation for Ireland has not only put the issue in the spotlight but has also revealed that it impacts tens of thousands of people.

The headline figure is stark, 69% of the 695,000 people experiencing material deprivation are not classified as at risk of poverty. People with disabilities, renters and lone parents are among those who are most likely to be overcome by bills, but whose reality is not captured by official figures.

Why it happens?

The experts at the ESRI lay out a number of reasons as to why this is happening.

One of the main areas of concern is the current practice of measuring a family or individual’s disposable income before taking account of housing costs. Yet the cost of having a home, whether through rent or mortgage is a ‘necessary and recurring cost’.

To have this disregarded when measuring the extent of poverty in our communities is questionable. When calculating disposable income, it makes sense to do so after accounting for housing costs. 

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In particular at a time when one of the primary costs facing many people relate to keeping a roof over their head.

The argument made by the ESRI for the establishment of a commission to look at how we capture the reality of the financial burden on households is persuasive.

Getting an accurate picture of the extent of poverty as well as those at greatest risk is also vital if we are to get to grips with the cost-of-living crisis and deliver the policies which are effective and deliver results.

The working poor 

Employment is central to ensuring people can improve their income and household budgets. It opens up pathways which benefits not just the individual but all members of the home. This has been well recognised.

Yet despite this, the ESRI has found that the ‘working poor’ account for one third of those below the poverty line, of which half are living in rental accommodation with lone parents accounting for another significant number.

At the centre of this again is the failure to account for necessary costs which groups of people require to make ends meet. 

These include the extra expenditure of living with a disability, trying to make time for education, training or work when you are a lone parent with young children or trying to get a start in life in a very difficult housing and rental market.

These are realities which many of the 5,000 voluntary, community and charitable partners of The Community Foundation for Ireland deal with on the ground every day. They will come as no great surprise.

Solutions 

Ultimately, the solution to many of these issues lie in providing people with affordable housing, whether through purchase or rental. However, for many the wait for these reforms is too long, their struggles are real and immediate.

They need action in the shorter term. In addition to looking at the way we measure and record poverty to inform future policies there are other measures which require urgent consideration.

The lack of accessible, subsidised, quality childcare remains an outstanding issue and one which still requires urgent attention. However, we must also take a longer-term view and look at other measures which will not only end hidden poverty but help us end all poverty.

Our education and training infrastructure needs to refocus and recommit to providing people with the correct skills to fill the jobs of the future. Targeted supports need to be further developed so that the needs of specific groups of people who are facing extra but necessary costs in their lives are met.

Ending inequality 

These latest findings have lessons and recommendations for all who believe in equality. As the second in a series of three annual reports by the ESRI, supported by donors to The Community Foundation, it is once again an agenda-setting piece of research.

It brings clarity to the challenges we face, and which our community partners are responding to each day as together we strive for truly inclusive communities.

However, the research does show that when it comes to bridging the inequality gap, we are making progress and it is right that this should be acknowledged. Since 2007, disposable income for those less well-off has increased by 2%, compared to 1% for those who are financially better off. This is a tangible narrowing of the inequality gap.

Policymakers now need to recommit to ending inequality. Step one must surely be to capture the true level of poverty in our country, to identify those at greatest risk and put in place the proper and resourced measures to support them.

• Denise Charlton is Chief Executive of The Community Foundation for Ireland