Dáil Éireann debate -
Wednesday, 6 Oct 1999

Vol. 508 No. 4

Written Answers. - Poverty Trends.

Michael D. Higgins

Question:

81 Mr. M. Higgins asked the Minister for Social, Community and Family Affairs his views on conclusions 8.3 and 8.4 of the Monitoring Poverty Trends report which found that the depth of relative income poverty increased between 1994 and 1997, particularly for households headed by unemployed persons, persons on home duties and senior citizens. [18887/99]

Minister for Social, Community and Family Affairs (Mr. D. Ahern)

The central outcome of the ESRI report, Monitoring Poverty Trends, which represents the first update on the 1996 publication, Poverty in the 1990s, on which the original National Anti-Poverty Strategy – NAPS – targets were based, is that there has been a sharp reduction in the numbers experiencing consistent poverty as targeted by the strategy.

In fact, the proportion of households in consistent poverty fell from 9 per cent – 15 per cent of the population in 1994 to 7 per cent – 10 per cent of the population by 1997 with the NAPS targets for 2007 almost achieved. In light of these very encouraging results, I announced, as part of this Government's social inclusion strategy, ambitious new targets to halve the numbers of people in consistent poverty to below 5 per cent by 2004.

While the ESRI report found that increases in lower incomes did not keep pace with average incomes over the 1994 to 1997 period, it is important to note that there have been substantial increases in all social welfare rates in recent years. For example, between 1995 and 1998, social welfare payments increased by some 13 per cent to 14 per cent compared to a total rise in the Consumer Price Index of less than 6 per cent over the same period. Indeed, all social welfare payments are now at or above the minimum rates recommended by the Commission on Social Welfare, achieving a key policy objective of both the National Anti-Poverty Strategy and Partnership 2000. These substantial real increases have contributed to a sharp reduction in levels of basic deprivation and, consequently, consistent poverty.

Of course, social welfare rates, while important, do not of themselves show the full picture. Having a job is recognised as the best route out of poverty. As such, the dramatic progress which has been made in reducing the numbers of unemployed has had, and continues to have, a very beneficial impact on the overall numbers in poverty. Since this Government has come into office the live register has dropped by 70,000 – 27 per cent – and an estimated 160,000 net new jobs have been created since 1997. The ESRI results show that, while the unemployed and persons on home duties made up a similar proportion of the consistently poor in both 1994 and 1997, these groups have both benefited from the sharp reduction in poverty generally. This is evident from the fact that households headed by an unemployed person and experiencing consistent poverty fell by over two percentage points to just over 3 per cent of the population between 1994 and 1997. A similar outcome was evident for such consistently poor households headed by persons on home duties which comprised less than 3 per cent of the population in 1997 having fallen by over 1.5 percentage points since 1994.

As regards senior citizens, it is important to note that, while there was an increase in the numbers falling below relative income lines, this was not reflected in the numbers of older people experiencing consistent poverty. Indeed, Monitoring Poverty Trends and other ESRI research into quality of life for older people demonstrates a relatively weak link between low incomes and deprivation for older people. One of the main reasons cited for this is the wide range of free schemes which are of particular benefit to the elderly but are not taken into account in the ESRI's calculation of household income. In addition, this Government continues to make progress towards its target of £100 per week for the old age pension, a rate of increase well in excess of increases in earnings, the achievement of which will certainly contribute towards an improvement in their relative income position.

The question of an appropriate future direction for social welfare rates generally is under consideration within my Department, particularly now that the minimum rates of payment as recommended by the Commission on Social Welfare have been achieved. This consideration will take account of all relevant publications from the ESRI, Combat Poverty Agency and others, such as the national pensions policy initiative. This examination will also, of course, have to take account of all relevant factors such as employment implications and budgetary considerations.