Budget 2021 Measures: What do they mean for people in poverty?

Posted by Tricia Keilthy  on 14 October 2020 | 0 comments

Budget 2021 Measures: What do they mean for people in poverty?

Even before the pandemic, almost 700,000 people were in poverty, living precarious and insecure lives. In many instances, COVID has swept them deeper into poverty, as well as dragging others under, many of whom will have not experienced this situation before. Decisive action needed to be taken in this Budget to prevent an increase in inequality and further hardship for households already struggling to make ends meet.

We hoped for a comprehensive investment package to help begin to address the persistent issues of income inadequacy, homelessness and housing insecurity, educational disadvantage, underfunded early years care and education, energy poverty and health inequalities, but it has unfortunately fallen short and the daily struggle of life on a low income will continue for far too many people next year. 

SVP asks that were delivered or partially delivered:

  1. Increase in supports for children in the poorest households; €2 extra per week for qualified children under 12 and a €5 weekly increase for children over 12.
  2. The thresholds for the Working Family Payment will increase by €10 and the earning celling for the One Parent Family Payment will be abolished which will help low income working families struggling to make ends meet.
  3. Increase in the Living Alone Allowance (€5 per week) and Fuel Allowance (€3.50 for 28 weeks) will help older people living alone who are at increased risk of poverty and income inadequacy.
  4. An additional €65 million funding for the retrofit of social housing will help those on the lowest incomes experiencing energy poverty. This is accompanied by addition €109 million for the Warmer Homes Scheme which is an important form of support for low income households who own their home.
  5. A once off €250 grant to all full-time students and an increase in the income thresholds for post-grad supports.
  6. There will be a 10c per hour increase in the National Minimum Wage and the USC bands for the lowest earners have been adjusted to reduce their tax burden, however the gap between the NMW and the Living Wage will be €2.10 per hour in 2021.
  7. The Christmas Bonus will be paid to all eligible recipient including those in receipt of the Pandemic Unemployment Payment and new Job Seekers for more than four months.

SVP asks that were not delivered:

  1. For a second year in a row, there has been no increase primary social welfare payments. This decision will particularly impact one parent households, single adults and people with disabilities who already have the highest rates of poverty and deprivation. SVP advocated that social welfare rates and the minimum wage must be benchmarked against the cost a Minimum Essential Standard of Living. While the increase in child payments are welcome, child poverty and income inadequacy can only be fully addressed when the minimum needs of the entire household are considered.
  2. No provision to deal with the issue of mounting personal debt as a result of the pandemic. SVP wanted to see a comprehensive package of supports for households struggling with utility and rent arrears, but Budget 2021 failed to proactively put in place necessary measures to prevent an increase in homelessness and disconnections.
  3. There were no improvements in income supports for people living in direct provision.
  4. The increase in the Fuel Allowance will not be sufficient to protect people from the carbon tax hike, particularly those commuting to low paid work, rural communities and those living in poorly insulated privately rented accommodation.
  5. A target of 12,250 new social housing units is set for 2021 but with over 70,000 households on the social housing waiting list and over 8,000 people living in emergency accommodation this target is not ambitious.
  6. €2.4 million allocated to HAP tenancies in 2021 which means further reliance on the private rented sector to meet housing need.
  7. Housing assistance and rent supplement limits remain the same which means low income households will continue to cut back on basics and put themselves at risk of homelessness to pay unsustainable top-ups.
  8. Lack of landlord incentives and obligations to improve the standard of accommodation in the private rented sector. 
  9. Little in the Budget to address to issue of school costs as there is no further investment in the schoolbook scheme or the capitation grant. The Back to School Clothing and Footwear Allowance thresholds were not changed and Child Benefit was not extended to teenagers over the age of 18 who are still in school.
  10. The thresholds for the SUSI undergraduate grant will remain unchanged, as will the adjacent grant rate distance of €45 km. We are very disappointed that there is still no support for students studying part-time but welcome the commitment by the Minister for Further and Higher Education to carry out a review of the adequacy of SUSI.
  11. Prescription charges will remain unchanged and there is no additional support for low income households struggling with the cost of health and hospital related charges.
  12. There will be no increase in funding for the Rural Transport Programme.
SVP will continue to advocate for improvements in supports and services that will prevent people falling into poverty and help more escape poverty for good.

Blog post written by Tricia Keilthy

Social Policy Development Officer

More by Tricia Keilthy

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