More than 689,000 living in poverty in Ireland, over 200,000 are children

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More than 689,000 people are living in poverty in Ireland, of which over 200,000 are children, despite some modest improvements in poverty and deprivation rates.

• 689,000 people in Ireland are living in poverty, of which 202,000 are children.
• 111,000 people living in poverty are in employment; the “working poor”.
• The number of over 65s in poverty has risen by 20,000 to 78,000.
• Overall there are 36,000 more people living in poverty in Ireland today compared to 2008.

689,000 people are living in poverty in Ireland today. Of this number, around 202,000 are children under the age of 18. Despite wage growth, increased employment and very high rates of economic growth, these figures show that a significant proportion of the population is still living in very difficult circumstances.

The scale of poverty in Ireland presents some very serious policy challenges. Despite falling poverty rates and numbers, which are very welcome, there are an extra 36,000 people living in poverty in Ireland today compared to a decade ago.

It’s no coincidence that falling poverty rates have coincided with welfare increases in recent years. Today’s figures reinforce just how critically important welfare is in addressing poverty. Without social welfare payments 40.9 per cent of Ireland’s population would be living in poverty, instead of 14 per cent. Such an underlying poverty rate suggests a deeply unequal distribution of income.

The government knows how important social welfare payments are when it comes to addressing poverty. This makes it all the more shocking that they chose to ignore them in Budget 2020. Increases in welfare payments and in the National Minimum Wage have contributed to modest improvements in poverty and deprivation rates, but the rest of society is now moving ahead with the recent return to earnings growth. This means Government’s decision not to increase core welfare rates and the minimum wage in Budget 2020 will inevitably reverse any gains that these vulnerable people have seen in recent years. If a disorderly Brexit occurs in 2020, a Supplementary Budget to deal with this will be unavoidable.

It is also of concern that the rate of poverty for older people went from 8.7 per cent to 11.5 per cent. That’s an additional 20,000 people over 65 years now living in poverty. In light of the freezing of the state pension in Budget 2020, this can only get worse.

It is very disappointing that despite impressive economic growth and record levels of employment, there has been no relief for the working poor. The number has been consistently been over 100,000 people for several years now, and we estimate that there are currently 111,000 people living in poverty despite being in employment. The idea of a job as an automatic poverty reliever is clearly contradicted by our analysis. The job must be well paid with decent conditions. Clearly, a rising tide doesn’t automatically lift all boats. Specific interventions are required to tackle the issue of the ‘working-poor’. Until Government makes tax credits refundable, it will not have an efficient mechanism by which it can address the issue of the working poor.

Policy solutions

If Government is serious about reducing poverty then policy must prioritise those at the bottom of the income distribution and it must be designed to address the wide variety of households and adults in poverty.

Social Justice Ireland has previously published 12 policy proposals for addressing income inequality and reducing poverty rates. These are:

1. Set an ambitious national poverty reduction target to be achieved over five years.
2. Maintain adequate adult welfare rates - to prevent people from falling below the poverty line.
3. Provide adequate payments for children – to end child poverty.
4. Index social welfare rates to the Minimum Essential Standard of Living over a five-year period.
5. Make personal tax credits refundable – to tackle poverty among people with low-paid jobs and create a more equitable tax credit system.
6. Support the widespread adoption of the Living Wage – so that inequality can be reduced and low-paid workers receive an income sufficient to afford a socially acceptable standard of living.
7. Introduce a cost of disability payment – to ensure that people with disabilities are not driven into poverty by the additional cost of their disability.
8. Introduce a universal state pension – to ensure all older people have sufficient income to live with dignity.
9. Prioritise measures for the reduction of rural poverty – to redress the current imbalance between urban and rural poverty in Ireland.
10. Measure and publish the socio-economic impact of each Budget by applying a Poverty Impact Assessment to each budgetary measure.
11. Make persistent poverty the primary indicator of poverty measurement. This measure identifies those who have experienced sustained exposure to poverty.
12. Introduce a full Basic Income system – to replace the parts of the social welfare system that are no longer fit for purpose. The introduction of a universal state pension and refundable tax credits should be the first step towards such a system.

The annual Survey on Income and Living Conditions (SILC), on which these numbers are based, was published today by the CSO. It is a household survey covering a broad range of issues in relation to income and living conditions. It provides a number of key national poverty indicators, such as the risk of poverty rate, the consistent poverty rate and rates of enforced deprivation.

The CSO calculates a ‘poverty line’ which is 60% of median income, adjusted to take account of family size and composition. The median income is the income of the middle person in society’s income distribution. In other words, it is the middle income in society. Irish data on poverty looks at those living below this 60% line.