Every year, the Department of Social Protection carries out a range of social impact assessments on the welfare measures contained in the Budget, using the Economic and Social Research Institute’s tax-benefit microsimulation model. Social Impact Assessment is an evidence-based methodology which estimates the likely distributive effects of policies on household incomes, families and poverty. This informs decision-making leading up to the Budget and ensures that the most vulnerable are protected.
Budget 2022 included a Social Welfare package worth €558 million, providing across-the-board increases of €5 to weekly payments to pensioners, people with disabilities, carers, lone parents and working age people, with proportionate increases for qualified adults. The package also included:
- Increases to qualified child dependant payment, with the weekly rate for children aged 12 and over increasing by €3 to €48 and the weekly rate for children up to age 12 increasing by €2 to €40.
- An increase in the income threshold in the Back to School Clothing and Footwear Allowance for single-parent households to bring it in line with two-parent households, along with a €10 increase in the payment for each qualifying child bringing it to €160 for children aged 4 to 11 years and €285 for children aged 12 years and older.
- An increase of €10 per week to the weekly income threshold for Working Family Payment regardless of family size.
- An increase in the weekly Fuel Allowance payment of €5, bringing it to €33 per week, along with a €20 increase in the weekly income threshold to €120 per week.
- The earnings limit for the weekly Disability Allowance payment will increase from €350 to €375.
- The weekly income disregard for Carer’s Allowance will increase to €350 per week for single carers and to €750 per week for carers with a spouse/partner, and the disregard when assessing Carer’s Allowance Capital/Savings will increase to from €20,000 to €50,000.
People who are living alone and are in receipt of a weekly welfare payment will benefit from the €5 per week increase to weekly payments, with those in receipt of the weekly Living Alone allowance also seeing that payment increase by €3 to €22 per week.
Details of the Budget 2022 social welfare package and examples of the impact of the different households can be found here: www.gov.ie/en/publication/318a9-budget-2022/#download-our-budget-fact-sheet.
The initial post budget-analysis of the Budget 2022 welfare package showed an estimated average increase in disposable household income of 0.4% (€2.70 per week), with above average gains of between 0.7% and 1.8% for lower-income households (income deciles 1-4). In general, social welfare measures primarily benefit the bottom deciles while tax changes tend to be more beneficial to middle to higher income groups. In terms of household type, the biggest estimated increases were for lone parents (0.7%/€4.50 per week), retired singles (1.5%/€5.90) and retired couples (0.7%/€7.20).
The full Social Impact Assessment of the welfare and income tax changes included in Budget 2022 is being prepared. It will include analysis of the impact of the budgetary changes on the income distribution; family type (single people with and without children; couples with and without children; retired singles and retired couples) and gender (male/female). It is envisaged that it will be published on www.gov.ie by January 2022 at the latest.