The widening gap between Ireland's rich and poor will require a radical rethink of social security services, according to the Combat Poverty Agency.
Ireland has one of the lowest levels of social welfare in Europe, despite improvements in the economy, according to a report released by the state-sponsored agency today.
It shows that social security transfers fell from 14.2 per cent of GDP in 1989 to 9.6 per cent in 1999.
The director of Combat Poverty, Ms Helen Johnston, said the organisation was aiming to discover what measures were needed to reduce and eventually eliminate poverty in the Republic.
"Consistent poverty has declined in Ireland and we welcome that," she said this morning. "But if we look at levels of income right across the income distribution, we can see that Ireland still has a relatively high proportion of the population living on relatively low incomes compared with our other European neighbours."
Ms Johnston also said the Government must invest directly in its social services to avoid forcing people into debt to pay for their health and education.
"We still have relatively high levels of economic growth and the question we have to ask ourselves now is how do we want to invest that growth?" she asked. "We may have to take some short-term cuts and so on, or adjustments. But in the longer term, are we investing in our education system, and in our health services? That is not without reform."
However, the Minister for Social and Family Affairs, Ms Mary Coughlan, countered the arguments by saying low expenditure was down to a number of factors.
Ireland's population of over-65s is a third lower than the EU average requiring much lower expenditure on pensions and health care, the Minister said. Ireland's spend on pensions is just 25 per cent of total social welfare expenditure compared to the EU average of 46 per cent, and 63 per cent for Italy, a country with a high proportion of elderly people.
She also noted that social insurance was only extended to the full working population in recent decades, meaning that a high proportion of current pensioners still only qualify for pensions under social assistance.
Ireland also has among the lowest levels of unemployment in the EU.