Dáil Éireann Debate, Wednesday - 27 June 2018
246. Deputy Mattie McGrath asked the Minister for Employment Affairs and Social Protection if her Department has a policy definition of the working poor; if so, the number in this category and for those deemed to be in consistent poverty; and if she will make a statement on the matter. [28088/18]
View answerIn-work poverty measures the at-risk-of-poverty rate (i.e. the percentage with incomes below 60% of the median income) among adults (16+) who are ‘in-work’, based on their self-defined principal economic status. The most recent CSO Survey on Income and Living Conditions data shows that in 2016 the at-risk-of-poverty rate was 5.6% for those aged 16 years or over with a principal economic status of ‘at work’. This was a reduction on the 2015 figure of 5.8%. Eurostat data (calculated on a basis that differs slightly from the CSO measure) suggests that in-work poverty is relatively low here; the Eurostat estimate for Ireland in 2016 is 4.8%, as compared with the EU average of 9.5%.
Consistent poverty refers to people who are both on relatively low incomes and experiencing deprivation. The consistent poverty rate in 2016 was 8.3 per cent for the overall population, down from 8.7 per cent in 2015. Numerically, 395,000 people were in consistent poverty in 2016, based on the 2016 Census population figure of 4.76m. An analysis of consistent poverty rates by principal economic status shows that the consistent poverty rate was lowest among those who were at work (1.9%).
The full impact of the recovery is not reflected in these 2016 figures for Ireland. Macro-economic and labour market indicators have shown continued economic and employment growth since then. The number of people in receipt of working-age income and employment supports has continued to fall. With these improvements, the Government was in a position to introduce a range of welfare increases from 2016 onwards. Measures include increases in core weekly rates for working-age adults, child benefit, income disregards for lone parents, rent limits for housing support payments and new initiatives to make work pay, such as the Back to Work Family Dividend.
Income supports play an important role in addressing poverty. The Working Family Payment (WFP) (formerly known as Family Income Supplement (FIS)) and Back to Work Family Dividend (BTWFD) are important in-work supports for this group. WFP is an in-work support which provides an income top-up for employees on low earnings with children. It is designed to prevent in-work poverty for low paid workers with child dependants and to offer a financial incentive to take-up employment. The BTWFD is a targeted scheme designed to further improve the incentive to take-up employment or self-employment for welfare recipients with children. In 2016, social transfers reduced the at-risk-of-poverty rate for people of working-age from 33.6% to 16.5%. This equated to a poverty reduction effect of 50.9%.
Recent budgets have been forward looking, allocating limited resources in a prudent way, to make sure that everyone benefits from the recovery. The focus of these budgets has also been on the provision of services rather than simply on income supports (e.g. extension of the School Meals Scheme and the Single Affordable Childcare Scheme).
The Social Impact Assessment of Budget 2018 show average household incomes increasing by 1.1% (€11.40 per week). They also provided greater rewards for working, with over 80% of the unemployed substantially better-off in work and almost 25% of the working population experiencing a reduction in their Marginal Effective Tax Rate with little to no impact predicted for a further 69% of the working population.
The improvement in the economy, together with the welfare measures referred to, are likely to have supported a reduction in poverty since the period in 2016 to which the SILC publication refers. This improvement is expected to continue with further rises in incomes and living standards.
