Tuesday, 9 April 2019

Questions (605)

Willie Penrose

Question:

605. Deputy Willie Penrose asked the Minister for Employment Affairs and Social Protection the prime measure of inflation her Department uses to assess or examine the cost of living increases in respect of social welfare payments; the rates of inflation used by her Department over the past ten years; and if she will make a statement on the matter. [16660/19]

View answer

Written answers (Question to Employment)

The Consumer Price Index (CPI) is the official measure of inflation in Ireland. The Central Statistics Office (CSO) measures the overall change in the prices of goods and services that people typically buy over time. The goods and services that are included in the basket are determined from the Household Budget Survey. Another measure, the Harmonised Index of Consumer Prices, is used to compare between European Union countries.

The annual average percentage change in CPI over the last ten years, as published by the CSO is set out in the following table.

Year 

 Percentage Change

2009

-4.5

2010

-1.0

2011

 2.6

2012

 1.7

2013

 0.5

2014

 0.2

2015

-0.3

2016

  0.0 

2017

 0.4

2018

 0.5

My Department is currently considering options to implement the commitment for the State pension (contributory) by examining previous studies on benchmarking and indexation, international experience and examining a range of potential benchmarks and indices. 

In terms of the wider application of indexation of social welfare payments generally, Section 19 of the Social Welfare, Pensions and Civil Registration Act 2018 provides that I, as Minister, will arrange to “consult with stakeholders on examining ways in which social welfare rates are increased with the aim of ensuring adequacy for all recipients and shall do so in quarter 1 of 2019”.

In this context my Department met with numerous interested stakeholders during quarter 1 2019 to solicit views on how the adoption of a benchmark, and a system of indexation, might work for social welfare rates more generally.  The feedback from this consultation is currently being considered and will help to inform the development of the approach to benchmarking/indexation.

In addition, I expect that the issue will be considered at my Department's Pre-Budget Forum in July.  The Pre-Budget Forum includes representatives from the Community and Voluntary Sector, ICTU and IBEC among others.  I would also welcome views from all political parties who are interested in this area and submissions should be made to my office.  

Any change to the current process of setting social welfare rates of payment would require Government approval and would have to be considered in the overall policy and budgetary context.  This would include taking account of stakeholder views, as well as considerations of cost, work incentives, poverty alleviation, policy alignment and the administration of any proposed system.