Core social welfare rates must increase by €25 in Budget 2024

Core social welfare rates must increase by €25 in Budget 2024, and Government must commit to benchmarking social welfare rates to average weekly earnings if it is to have any impact on reducing poverty and meeting its own targets.  These are the key findings from Social Justice Ireland’s policy brief ‘Social Welfare Rates Budget 2024: the case for benchmarking and indexation’.

Social welfare rates and poverty

Adequate levels of social welfare are essential to addressing poverty.  Government must increase core social welfare rates by €25 in the forthcoming budget.  Income adequacy cannot be addressed by one-off measures.  Budget 2023 failed to deliver for vulnerable and low-income households as the necessary increase to the minimum social welfare payment was not made.  A repetition of this mistake would mean Government yet again fails those on low incomes.

Social welfare payments play a crucial role in reducing poverty.  Without the social welfare system just over one-third of the Irish population (36.7 per cent) would have been living in poverty in 2022. Such an underlying poverty rate suggests a deeply unequal distribution of direct income. In 2022, the actual poverty figure of 13.1 per cent reflects the fact that social welfare payments reduced poverty by almost 24 percentage points.  If Government is serious about meeting its own poverty targets and supporting households on the lowest incomes who, through good and bad economic times, struggle to live life on a low income the core social welfare rates must increase by €25 in the budget.

Benchmarking

In addition we are calling on Government to benchmark social welfare rates to 27.5 per cent of average weekly earnings in Budget 2024. This benchmark is hugely important to improving the living standards of many in Irish society, and to achieving anti-poverty commitments.  This benchmark should be used as the starting point in the development of a pathway to index core social welfare rates to the Minimum Essential Budget Standard over time.   Achieving this benchmark require an €25 increase in core social welfare payments.

‘Social Welfare Rates Budget 2024: the case for benchmarking and indexation’ – key recommendations:

• A commitment from Government to benchmark core social welfare rates to 27.5 per cent of average weekly earnings in Budget 2024
• An increase of €25 in all core social welfare rates in Budget 2024;
• Commitment to use this benchmark as the starting point in the development of a pathway to index core social welfare rates to the Minimum Essential Budget Standard over time.