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Category: Blog

Strategy needed to ensure that every household in Ireland has an adequate income

The consequences of struggling to manage on an income which is too low to stave off poverty and to allow a household to meet their essential basic needs are seen every day by SVP members visiting people in need throughout the country. 

Social welfare payments were cut severely during the recession and rates have not been restored in spite of the economic recovery.  Job losses, reductions in pay and working hours and increased taxation have reduced the take home pay of many in employment.  Reforms to the One Parent Family Payment have been implemented against a backdrop of austerity.  These reforms have cut the incomes of lone parents who are in employment and are likely to make it more difficult for lone parents to take up employment, education or training in the future.  There have been deep cuts to social welfare payments for young adults, which have been particularly difficult for vulnerable young people including those who are homeless and those who are living in low income households.  

Child Benefit has been maintained as a universal payment and there have been some increases in the Child Benefit payment level following several cuts.  Expenditure on Family Income Supplement has increased, and the number of children and families benefiting from this payment have also increased.  In spite of these positives, the increasing cost of living and the cumulative impact of cuts to income supports and services in recent years continue to make it more difficult for individuals and families to make ends meet. 

The Vincentian Partnership for Justice examines whether or not social welfare and low paid work allow different household types to have a minimum essential standard of living – a standard of living that meets the physical, psychological and social needs of the individual/household.  This research found that in 2015, social welfare does not meet the cost of a minimum essential standard of living for 191 of the 214 urban sample households examined.  This situation is forecast to worsen in 2016 in spite of some positive measures announced in Budget 2016.  The shortfalls between income and expenditure identified by the Vincentian Partnership for Justice range from around €40 to €200 per week for working age households in receipt of social welfare.  These shortfalls are immense. Increases in social welfare payments as well as investment in public services are required in order to bridge this gap.   

A full time minimum wage job does not necessarily provide an income which is adequate for a minimum essential standard of living either.  High housing and childcare costs in particular mean that the minimum wage often falls far short of what is necessary.  The Living Wage, which would allow an individual working a 39 hour week to meet all of their minimum needs is €11.50 per hour.  This is significantly higher than the minimum wage of €9.15 per hour (in 2016) and points to the inadequacy of the minimum wage in the face of the high cost of living. 

A strategy is needed to ensure that every household and family in Ireland has an income which is adequate to meet their needs.  This requires increasing social welfare payments, tackling the problem of low pay for those in work, and tackling the cost and availability of services including childcare, housing, health and education.  The current National Action Plan for Social Inclusion runs from 2007-2016, and the current plan is to be extended to 2017 to allow time for the development of its successor.  The development of the new National Action Plan for Social Inclusion will allow the next Government to demonstrate its commitment to tackling poverty and provides the opportunity to introduce policy measures which will make a real impact on the lives of individuals, children and families who are experiencing poverty and life on a low income.  We need to see commitments from all election candidates that if they are elected, social welfare payments will be increased, the Living Wage will be introduced progressively and that quality public services will be provided. 

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