Dáil Éireann Debate, Thursday - 6 July 2023
113. Deputy Paul Murphy asked the Minister for Social Protection if all social welfare payments will be increased in line with inflation in the forthcoming budget; and if she will make a statement on the matter. [33170/23]
View answerI will ask the Minister a simple question. Does she agree that all social welfare payments should be increased at least in line with the rate of inflation in the forthcoming budget? The Government did not do this in the last budget and the result has been that the poorest people in our society got poorer as a consequence of the decisions the Government made. These consequences are that more people are in deprivation, at risk of poverty and using food banks.
I am acutely aware, as everyone is, of the pressures faced by households given increases in the cost of living. Thankfully, this Government's management of the Irish economy means that even in the face of challenging international conditions, we have the capacity to respond, and we have responded. Last September, I announced the largest social protection budget in the history of the State comprising measures worth almost €2.2 billion. This budget did not take the approach of simply increasing payment rates in line with inflation. Instead, it provided a combination of eight lump-sum payments and a €12 across-the-board increase in weekly rates, which was the largest such increase since the mid-2000s. In addition, it continued the practice adopted in recent years to provide targeted, above-inflation increases in key payments. As the Deputy will be aware, we have particularly focused in recent budgets on increasing qualified child payments, fuel allowance payments and living alone payments, as well as the income thresholds on working family and lone parent payments as these have been shown to have the greatest impact in reducing poverty.
Independent analysis by the Economic and Social Research Institute, ESRI, found that budget 2023, in following this approach, delivered for lower income households, which were found to be better off than if they had just received an inflation-indexed increase in basic rates. This analysis indicates that a simple, inflation-adjusted increase in rates is not necessarily the best approach and, in fact, that targeted measures can be more effective in alleviating poverty and addressing cost-of-living pressures. Accordingly, as Minister, I will continue to examine the evidence produced by organisations such as the Vincentian Partnership for Social Justice to inform how the social welfare budget package should be constructed. As the Deputy may be aware, the work of the Vincentian Partnership is funded by my Department.
The Deputy may also be aware that the Department runs a pre-budget forum every year at which stakeholders and advocacy groups, including the Society of St. Vincent de Paul, Barnardos and others, have an opportunity to meet me and present their proposals for measures they would like to see included in the budget. This year's forum is being held on 19 July. Decisions about budget 2024 will be made in the coming months and will take account of the analysis and recommendations put forward by these stakeholders. It goes without saying that, in working with my ministerial colleagues, I will seek to respond to changes in the cost of living. We have not been found wanting so far and we will not be found wanting in the future.
The Government has been found wanting. More people are at risk of poverty, using food banks and in deprivation. That is the consequence of the Government's decision to increase social welfare rates and so on by less than the rate of inflation, along with lots of other decisions it has made. The Minister referred to the increase of €12, or 5.7%, in the latest budget. Inflation last year was 8.1% and it was running at 6.6% to May this year. As the Minister will undoubtedly know, the real rate of inflation for the poorer sections of society is actually significantly higher than that because they spend a much higher proportion of their income on groceries for which the rate of inflation is higher. For example, the Vincentian Partnership for Social Justice estimates that the increase in the minimum essential standard of living in 2023 will be 10%. Those are the kinds of increases we need if we do not want to push people even further into poverty.
I think that any fair-minded person would agree that this Government has, since its formation in 2020, provided unprecedented supports to protect people and families, first through the pandemic and then with the cost of living.
I will just give Deputy Murphy an example. We can all get tied up in statistics but what I want to see is money in pockets. If we take a lone parent with a 12-year-old child, the once-off spring-summer payments came to a total of €525, whether that was the electricity credit or the lump-sum payment for those in receipt of the fuel allowance. In autumn, we had the double weekly payment, another €200 electricity credit, a lump-sum fuel allowance payment of €400, a double monthly payment of child benefit, a working family lump-sum payment of €500, and a 100% Christmas bonus. That adds up to €1,700. In spring, there was a €200 electricity credit in January, another one in March, a €200 lump-sum payment to primary recipients of the long-term social welfare payments, including the working family payment, a €100 child benefit that was paid last month and a €100 extra payment for each child for whom the back-to-school clothing and footwear allowance is to be paid in 2023. When we add all that up we get the equivalent of €59 per week. When we add to that another €12 increase in the one-parent family payment, which was across the board, and a €2 increase in the qualified child payment, it brings the rate to €50 for over 12s. I am talking about money in people's pockets and they needed every penny they got. I am under no illusions in that regard. What I want to do in the budget is to listen to the stakeholders and put a budget package together that targets those most in need.
The Government prioritised once-off payments. The vast majority of the payments the Minister listed are once-off but the price increases are permanent. They are not going to go down. Groceries are not going to decrease in price to where they were a couple of years ago. If inflation goes down, prices do not go down. It is just that the rate of increase is reduced. Unless the Minister actually matches social welfare payments to the inflation that people in the most deprived sections of our communities are feeling, the consequence will be that more and more people will be pushed into poverty.
The Minister says she wants to see money in people's pockets. That is great. I want to see money in people's pockets, but the best way to do that is to increase the money going into their pockets through social welfare payments. If we do not do that, we are just pushing people further and further into crisis.
This is real. The Barnardos survey at the end of last year shows that the number of parents using food banks doubled over the course of the year. One in ten parents used them. That is an horrific reality, and a very large proportion of those people are obviously reliant on entirely inadequate social welfare payments.
If we are going to compare statistics, analysis by the ESRI shows that, combined with the increase in the core social welfare payment rates, these lump sums effectively compensated lower income households for price increases and, in fact, were more effective than an index-linked increase in core rates. I reiterate that what I want to see is money in people's pockets when they need it to pay the bills and put food on the table.
Deputy Murphy mentioned food banks. People who cannot put food on the table should talk to their community welfare officer. That is what the additional needs payment is there for. It is the State's safety net and it is available to anybody who needs it. I encourage people to use it. If someone does not want to go to a community welfare officer, the service can be contacted online as well.
The money needed to fund these measures was available due to sound economic management by this Government, which has contributed to historically low levels of unemployment. The Government has already clearly stated that it is keeping the cost of living under review. It has acted as necessary time and again. I will be listening to all the stakeholders on 19 July and, as with every other year, I will work with my Government colleagues to put together a package to support people on social welfare payments that targets those most in need.
