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Social Welfare Schemes

Dáil Éireann Debate, Tuesday - 16 June 2015

Tuesday, 16 June 2015

Ceisteanna (194)

Joanna Tuffy

Ceist:

194. Deputy Joanna Tuffy asked the Tánaiste and Minister for Social Protection if she will provide an update on the impact of the various social protection measures on poverty and income inequality (details supplied), from 2008 to date in 2015; and if she will make a statement on the matter. [23383/15]

Amharc ar fhreagra

Freagraí scríofa

The impact of social transfers (that is all welfare payments excluding pensions) on poverty and income inequality for the period 2008-2013 is set out in the following tables, using official EU indicators and data from Eurostat.

In 2013, social transfers reduced the at-risk-of-poverty rate from 38.5% to 14.1%; thereby lifting almost a quarter of the population out of income poverty. This is equivalent to a poverty reduction effect of 63%. Ireland is the best performing EU member state in reducing poverty through social transfers, higher even than the Scandinavian countries such as Denmark, Finland and Sweden.

Furthermore, Irish social transfers are almost twice as effective in preventing poverty as the EU average and up to three and a half times more effective than the member states worst affected by the economic crisis, such as Greece, Italy, Portugal and Spain.

With regard to income inequality, in 2013, Irish social transfers reduced the Gini coefficient from 46 to 30, an inequality reduction effect of 35%. Ireland is the best performing EU member state, again ahead of the Scandinavian countries.

Social transfers in Ireland reduce income inequality by over twice the EU average and up to five times more than in the crisis countries of Italy, Greece and Cyprus.

Looking at the trends between 2008 and 2013, Ireland has improved the poverty reduction effect of social transfers from 54% to 63%. A similar improvement can be seen in regard to income inequality: 28% to 35%.

These data highlight the crucial role that Ireland’s social protection system has played in cushioning the effect of unemployment on household incomes and acting as an automatic stabiliser during the economic and fiscal crisis. It also belies the assertion that fiscal consolidation has impacted on the most vulnerable in society. Central to this significant social policy outcome is the Government’s commitment to maintain the value of the core welfare rates, while at the same time providing additional welfare funding to cater for an increase of 50% in the number of welfare recipients.

Annex

Comparative EU data for 2013

ARP before STs

(ex-pensions)

ARP after STs

PREST

Rank

EU (28 countries)

25.9%

16.6%

35.9%

Ireland

38.5%

14.1%

63.4%

1

Denmark

28.1%

12.3%

56.2%

2

Finland

26.4%

11.8%

55.3%

3

Netherlands

20.8%

10.4%

50.0%

4

Czech Republic

16.6%

8.6%

48.2%

5

United Kingdom

30.1%

15.9%

47.2%

6

Luxembourg

29.4%

15.9%

45.9%

7

Hungary

26.3%

14.3%

45.6%

8

Sweden

27.1%

14.8%

45.4%

9

Austria

25.9%

14.4%

44.4%

10

France

24.2%

13.7%

43.4%

11

Slovenia

25.3%

14.5%

42.7%

12

Belgium

26.3%

15.1%

42.6%

13

Cyprus

24.3%

15.3%

37.0%

14

Slovakia

20.1%

12.8%

36.3%

15

Croatia

29.7%

19.5%

34.3%

16

Germany

24.4%

16.1%

34.0%

17

Malta

23.3%

15.7%

32.6%

18

Lithuania

30.3%

20.6%

32.0%

19

Spain

30.0%

20.4%

32.0%

20

Estonia

25.4%

18.6%

26.8%

21

Portugal

25.5%

18.7%

26.7%

22

Latvia

26.0%

19.4%

25.4%

23

Poland

23.0%

17.3%

24.8%

24

Italy

24.6%

19.1%

22.4%

25

Bulgaria

26.7%

21.0%

21.3%

26

Romania

27.8%

22.4%

19.4%

27

Greece

28.0%

23.1%

17.5%

28

Source: Eurostat, EU-Survey on Income and Living Conditions, 2013. Extracted: 13.02.2015

Comparative EU data for 2013

Gini before STs

(ex-pensions)

Gini after STs

Income inequality reduction effect

Rank

EU (28 countries)

36.1

30.5

15.5%

Ireland

46.3

30.0

35.2%

1

Denmark

38.9

27.5

29.3%

2

Finland

33.6

25.4

24.4%

3

Sweden

32.9

24.9

24.3%

4

United Kingdom

39.8

30.2

24.1%

5

Belgium

34.0

25.9

23.8%

6

Slovenia

30.6

24.4

20.3%

7

Luxembourg

38.1

30.4

20.2%

8

Netherlands

31.4

25.1

20.1%

9

Hungary

34.8

28.0

19.5%

10

Austria

33.3

27.0

18.9%

11

Germany

36.2

29.7

18.0%

12

Croatia

37.3

30.9

17.2%

13

France

35.8

30.1

15.9%

14

Czech Republic

28.8

24.6

14.6%

15

Slovakia

28.3

24.2

14.5%

16

Malta

32.6

27.9

14.4%

17

Lithuania

40.2

34.6

13.9%

18

Spain

38.8

33.7

13.1%

19

Portugal

38.4

34.2

10.9%

20

Poland

33.9

30.7

9.4%

21

Estonia

36.3

32.9

9.4%

22

Cyprus

35.5

32.4

8.7%

23

Romania

37.0

34.0

8.1%

24

Latvia

38.3

35.2

8.1%

25

Bulgaria

38.1

35.4

7.1%

26

Greece

37.0

34.4

7.0%

27

Italy

34.8

32.5

6.6%

28

Source: Eurostat, EU-Survey on Income and Living Conditions, 2013. Extracted: 12.06.2015

Poverty reduction effect of social transfers (PREST), 2008 to 2013*

2008

2009

2010

2011

2012

2013

EU Average

34.4%

35.4%

36.9%

36.4%

34.6%

35.9%

IE

54.4%

60.0%

61.9%

61.6%

60.1%

63.4%

Source: Eurostat, EU-Survey on Income and Living Conditions, 2008-2013. Extracted: 12.06.2015

Income inequality reduction effect of social transfers, 2008 to 2013*

Gini coefficient

2008

2009

2010

2011

2012

2013

EU Average

14.2%

15.0%

15.8%

15.6%

15.3%

15.5%

IE

28.5%

33.6%

34.4%

35.8%

35.0%

35.2%

Source: Eurostat, EU-Survey on Income and Living Conditions, 2008-2013. Extracted: 12.06.2015

* Figures for 2008 and 2009 refer to the EU-27, while those for 2010 to 2013 relate to the EU-28.

Definitions

At-risk-of-poverty: Persons are regarded as being at-risk-of-poverty if their equivalised income is below 60% of the median income.

Gini coefficient: is the relationship between cumulative shares of the population arranged according to the level of income and the cumulative share of total income received by them. If there was perfect equality (i.e. each person receives the same income) the Gini coefficient would be 0%. A Gini coefficient of 100% would indicate there was total inequality and the entire national income was in the hands of one person.

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