Non-cash benefits less effective in reducing poverty

Non-cash benefits have less impact on poverty in Ireland than thought, claims a new Economic and Social Research Institute study.

The ESRI report said that when using the more accurate "consistent poverty" measure, as opposed to simply measuring poverty by income level, the impact of non-cash benefits or "free schemes" is significantly less.

The report, "Non-Cash Benefits on Poverty in Ireland", found non-cash benefits benefited the elderly, the sick and single-person households more than the unemployed, lone parents or large family households.

But the report, published today and commissioned by the Minister for Social, Community and Family Affairs, Mr Ahern, says: "The broad picture of poverty revealed by research to date which has itself gone beyond household income is not substantially altered by directly taking benefits from the free schemes into account in measuring poverty."

Previous studies had shown that when non-cash benefits, such as fuel allowances and medical cards, are considered, the percentage of impoverished households is reduced.

Dr Helen Russell, co-author of the report, told ireland.comthat when using the "consistent poverty" measure it was found non-cash benefits "didn't change the picture much".

She said: "The fall in poverty levels over the last 10 years has been mainly due to increased employment or a fall in unemployment."

Nevertheless the free schemes are well targeted and are reaching households in poverty."