The Vincentian Partnership for Social Justice (VPSJ) developed a model of a minimum income standard (MIS). The MIS is defined by the VPSJ as “the gross income a household needs in order to reach their minimum essential standard of living”.
The VPSJ’s Minimum Essential Standard of Living 2017 (MESL) is derived from a negotiated consensus, based on focus groups with representative households, and discussions with policy-makers and experts. According to the VPSJ, it is a standard of living which meets an individual's / household's physical, psychological and social needs, calculated by identifying the goods and services required by different household types in order to meet these minimum needs. The costs incorporate factors such as food, clothing, personal care, health, household goods, household services, communications, social inclusion, education, fuel, transport, personal costs, insurance, savings and contingencies.
The model developed by the VPSJ produces a minimum income standard which is dependent on whether the household is, among other factors: (i) in a rural or urban location; (ii) composed of a single working age person, a couple, a single- or two-parent family, a single pensioner or a pensioner couple; and (iii) living in private rented accommodation, social housing or is an owner-occupier.
It should be noted that the MESL for welfare households assumes that households are eligible for a medical card, and as such, health and insurance costs are reduced accordingly, although the cost of over-the-counter medicines and prescription charges remain. While the model assumes that pensioners have the Free Travel pass and the Household Benefits package, it does not assume this for working age people. It should be noted that certain working age recipients of welfare payments do qualify for Free Travel – all recipients of Disability Allowance, Invalidity Pension, and Carer’s Allowance, for example.
The costing outlined below is based on the following assumptions: (i) The minimum income standards used for the costings are those for urban locations; (ii) Housing costs are not taken into account as these are provided for separately in the model and vary significantly depending on a household’s circumstances. It should be noted that weekly welfare payments do not vary depending on housing types or costs. A range of schemes, such as Rent Supplement, the Housing Assistance Payment, Rental Accommodation Scheme and the differential rent scheme are available to assist with certain types of housing costs.
The Minimum Income figures used in this costing are from the Minimum Essential Standard of Living 2017
(the latest publication available) and its Appendices. The costs are based on 2018 estimated recipient numbers.
Children
The cost of a child in 2017 varies depending on the child’s age, according to VPSJ research (Appendix 3A). The VPSJ research places the weekly cost of an infant at €81.09, a pre-school child at €49.19, a child in primary school at €81.77 and a child in secondary school at €129.27. These costs comprise of food, clothing, household goods, health, social inclusion, transport, education, etc. The costs do not include childcare.
For the purposes of this costing exercise, a weighted average increase was calculated (based on the CSO’s 2017 estimated population distribution by age, which is the most recent available). Taking into account the value of the qualified child increase (€31.80 per week from March 2018), child benefit (€140 per month) and Back to School Clothing and Footwear Allowance where appropriate (€125 or €250 per annum, depending on the age of the child), an average increase of €21.22 (rounded up to €21.30 per week) is required to the qualified child increase to bring the payment in line with the VSPJ’s direct cost of a child.
The cost of increasing the qualified child increase by €21.30 per week is €393.57 million in a full year. This includes the cost of increasing the Back to Work Family Dividend which is linked to the rate of the qualified child increase (€15.18 million).
Working Age
The VPSJ research finds that the minimum income standard (MIS) for a single working age adult with no children is €214.69 per week (Appendix 4A). For the costing, all weekly working age personal rates were increased to €214.70 per week. The monetary increase varies depending on the current weekly personal rate. It should be noted that the value of increases such as the Living Alone Allowance and supplementary payments, where relevant, such as the Household Benefits Package, Fuel Allowance, and Free Travel, have not been taken into account in this costing.
The MIS for a working age couple with no children is €327.96 (Appendix 4A), which is an increase of €113.27 from the single person’s rate. From March 2018, the general increase for a working age qualified adult is €131.40 per week. Accordingly, the qualified adult rate was not changed in this costing.
The cost of increasing all working age personal payments to €214.70 per week is €590.74 million in a full year. It should be noted that this cost also includes increasing the Jobseeker’s Allowance age-related reduced rates to €214.70 per week, at a total cost of €113.37 million in a full year.
Pensioners
The MIS for a single pensioner is €216.38 and for a pensioner couple is €261.73 (Appendix 6A). Accordingly, there are no welfare increases required to reach the MIS for pensioners as current welfare payments are in excess of the MIS for this group.
