John Gormley
Ceist:133 Mr. Gormley asked the Minister for Social and Family Affairs the factors that have caused a rise in relative poverty. [24297/03]
Written Answers. - Anti-Poverty Strategy.
Relative income poverty is defined by reference to an income threshold set at a particular percentage of average – mean or median – income, adjusted for family size and composition using equivalence scales. In Ireland, data on the levels of relative income poverty have been derived from analysis of the results of the Living in Ireland Survey undertaken by the Economic and Social Research Institute.
A wide range of factors influence the levels of income poverty at any given point in time. They include: earnings levels; patterns of household formation; the direction of tax and welfare policies; employment and unemployment levels; employment structures; and the level of recourse to welfare supports generally. These interact in a highly dynamic environment and the relative impacts will inevitably change at different points of the economic cycle.
Relative poverty has increased in Ireland in recent years, mainly because a majority have enjoyed substantial increases in their incomes resulting in a widening gap with the incomes of the less well off. The reasons for this include increased employment, an increase in the proportion of two income households, an increasing proportion of better quality, better paid jobs available to a more educated workforce, fewer dependants resulting from the decline in the birth rate and a tax system designed to provide incentives for economic development and remove obstacles to employment participation, which leaves people with more take home pay. This approach has helped to generate the high levels of economic growth that Ireland has enjoyed over the past decade and to sustain the economy during the current economic difficulties. This growth has generated the resources required to significantly improve our social protection system and social services generally and to work on closing the gap with other EU countries on physical infrastructure.
The substantial improvements made in social provision, however, have not kept pace with the increases in income of those in employment, especially with those in higher paid employment. Our flat rate social welfare system is very effective in making basic provision, especially for the less well off but not specifically at addressing rela tive poverty levels, especially during times of high economic growth. It is, however, a more secure and sustainable system especially during economic downturns and in the face of an ageing population.
The Government is committed to steadily improving the system by increasing payment related benefits in real terms under the revised National Anti-Poverty Strategy and the recent national action plan. My Department has also commissioned research from the Economic and Social Research Institute which will seek to define more closely the factors which impact on the levels of relative income poverty in Ireland, with a view to determining whether it could be addressed more effectively. It is envisaged that this research will be completed before the end of this year.