POVERTY LEVELS will increase significantly in coming years, particularly for those vulnerable groups dependent on social welfare, a leading think tank has warned.
A report by the Economic and Social Research Institute published yesterday says Ireland faces a “very challenging situation” and the most vulnerable groups will face “a greater risk of consistent poverty and social exclusion”.
It singles out the long-term unemployed, lone parents and those unable to work due to disability or illness as the groups most at risk of becoming caught in a deepening poverty trap. It says Government policy is critical to “poverty-proof” the most vulnerable groups and warns benefits have already been cut due to the worsening economic climate.
“The onset of the economic recession in the second half of 2008, contracting GDP, fiscal crisis and rising unemployment figures are likely to have serious implications for the income and living conditions of many of the population which are not picked up in the 2007 data or indeed in the 2008 figures,” says the report.
The report Monitoring Poverty Trends in Ireland 2004-2007 shows the proportion of people “at risk of poverty” fell during the economic boom, from 19 per cent in 2004 to 16 per cent in 2007.
The “at risk of poverty” indicator identifies all those (households or people) who fall below an income threshold set at 60 per cent of median income, which in 2006 was €202.49 per week.
The percentage of children at risk fell to 20 per cent in 2007, down from 23 per cent in 2004.
Among the working age group, poverty levels fell to 15 per cent in 2007, down from 17 per cent in 2004. Those aged over 65 years saw the largest decline, with the number of people at risk of poverty falling to 16 per cent in 2007, from 27 per cent in 2004.
“Improvements in the levels of contributory and non-contributory pensions contributed significantly to the reduction in poverty,” concludes the report.
Older people living alone were almost twice as likely to experience income poverty (24 per cent) as those aged over 65 years who are living with a partner (13 per cent).
The number of people living in “consistent poverty” also declined during the economic boom, from 7 per cent in 2004 to 5 per cent in 2007. Consistent poverty measures those deprived of basic goods or services as well as income.
The reductions in poverty levels between 2004-2007 do not meet the targets set by the Government in Building an Inclusive Society, a policy launched by then taoiseach Bertie Ahern in 2002. This set a goal of reducing consistent poverty to 2 per cent by 2007.
Minister for Community Affairs Pat Carey said he welcomed the reduction in poverty levels achieved through increased social transfers between 2004-2007.
But he warned that further cuts in benefits were on the table ahead of December’s budget, including the old age pension.
“Everything is being discussed but a decision will not be taken until close to the budget,” he said.
The report identifies the decision to phase out the one-parent family payment for children over 13 years of age as a particular challenge. “The strong contraction in employment and rising demand for training places mean that moving lone parents into education and training, or to secure employment that could lift their households out of poverty, is increasingly difficult,” it says.
It also notes a strong link between rising unemployment and poverty levels. “The magnitude of this effect will however depend in part upon how many of those who lose their jobs become trapped in long-term unemployment and the extent to which unemployment is concentrated within households,” it adds.