Michael Moynihan
Ceist:27 Mr. Moynihan asked the Minister for Social Welfare if he will outline the extent to which low-paid employment is a factor in the prevalence of poverty; and if he will make a statement on the matter.
Written Answers. - Low Paid Employment.
The Economic and Social Research Institute, in their research on poverty, have emphasised that there is no single "poverty line" dividing those in poverty from those who are not. Rather, the institute favour the use of a number of thresholds such as 40 per cent, 50 per cent or 60 per cent of average income. Similarly, there is no universally agreed definition of "low pay"— a number of different low pay thresholds can be used.
The ESRI have studied the relationship between low pay and poverty, using a range of thresholds and income data collected in a nation-wide survey. The institute's researchers concluded that the overlap between low pay and poverty is very limited. Very few of the low paid, less than 4 per cent, were found to be in households below the 40 per cent threshold line, fewer than one in ten were in households below the 50 per cent line, and about 20 per cent were in households below the 60 per cent line.
The main reason for this finding is that the majority of the poorest households do not contain an employee, but are composed of people dependent on social welfare payments. Other reasons include the fact that many of the low paid are in households which are above the poverty line because there is more than one income in the household.
The risk of poverty is greatest if the low-paid employee is the only earner in the household, and if the family has children; low-paid employees who do not have any dependants are less likely to be found to be in poverty.
This limited overlap between low pay and poverty is not specifically an Irish phenomenon; similar findings have emerged from studies in other countries.
Although the overlap between low pay and poverty is limited, the Government are committed to helping those on low earnings. This year's budget contained a number of measures aimed at helping those on low pay and at risk of poverty. We have increased the tax exemption limit for low-paid workers to £3,250 for a single person and £6,500 for a married couple. The special child addition introduced last year is being increased to £300 per child. We have provided an additional £1 million to increase family income supplement payments. And in order to help those on very low earnings we have introduced an exemption from employee PRSI contributions for workers earning £60 a week or less.
We will continue to take the measures necessary to address this problem.