The Central Statistics Office (CSO) has recently released figures on measuring poverty in Ireland. While there has been some reduction in overall poverty rates, there is much that needs to be done to realise significant reductions in poverty.The most direct policy tool to reduce inequality is redistribution through taxes and benefits
Measuring Ireland’s Progress 2013
The latest data on poverty appears in the CSO Report on Measuring Ireland’s Progress 2013
What are the measures used? First, there is the ‘risk of poverty rate’, which we will call the ‘poverty risk rate’. Ireland had the highest percentage of population in the EU in 2012 at risk of poverty, at 50.4%. But that is before pensions and social welfare payments are taken into account. When these transfers are included, the poverty risk rate in Ireland falls to 15.7%; lower than the average EU rate of 16.9%.The lowest poverty risk rate in the EU was in the Czech Republic at 9.6%, while the highest rate was 23.1% in Greece.
Put simply, the poverty risk rate represents the share of persons with a disposable income below 60% of the national average income. This takes account of the size and composition of households. Yes, it is complicated, but it is an international measure. With it, one can see how well a country is doing in reducing poverty over time, as well as doing cross-country comparisons of poverty in different countries.
Another measure is estimating the ‘proportion of population in consistent poverty’. Using this index, 8.2% of the population were in consistent poverty in Ireland, in 2013. This was an increase on the level recorded in 2012, when 7.7% of the population was living in consistent poverty. This measure shows the extent to which this group may be excluded and marginalised from participating in activities which are considered the norm for other people in society According to the measure, those in consistent poverty lack two or more items from a published index of 11 items. The index includes specified amounts of food, clothing and heating. According to the CSO, children are more affected than older people. Just under one in eight children (11.7%) were in consistent poverty in Ireland in 2013, while the rate for those aged 65 and over was 1.9%.
Government targets for reducing poverty
The Government has adopted a ‘national social target for poverty reduction’. Set in October 2012, the target is to reduce consistent poverty to 4 per cent by 2016 (interim target) and to 2 per cent or less by 2020. The 2013 level is 8.2%. Ireland’s commitment to the EU poverty target is to lift a minimum of 200,000 people out of the risk of poverty or exclusion, by 2020. There a few other targets set; a target for the reduction of child poverty (to reduce the differential in the rate of consistent poverty between children and adults) and a target for the reduction of poverty in jobless households (to reduce the concentration of the population in consistent poverty in these households). In order to monitor progress, two new indicators have been set :-
·‘vulnerable to consistent poverty’ (the population experiencing basic deprivation and having an income between 60 and 70 per cent of the median),and
·‘absolute poverty’ (individuals falling below the 60 per cent median at-risk-of-poverty threshold anchored at 2010 values).
On 18 February, the Tanaiste and Minister for Social Protection, Joan Burton T.D., stated that – “The best route out of poverty is through work”. She made this comment on the publication of the Social Welfare Miscellaneous Provisions) Bill 2015, following Cabinet approval. That Bill contains the Back to Work Family Dividend, announced in Budget 2015, which is an initiative for out of work parents with dependent children. Specifically, it will provide a financial incentive to jobseekers and recipients of the one-parent family payment to take-up employment increase the hours they work or become self-employed. The debate on childcare costs is very relevant to this initiative.
But not all those categorised as being in poverty are available for work. Those who are more vulnerable to poverty require support. It is also important to promote equality of opportunity, particularly by promoting access to quality education. Federico Cingano in a report for the OECD, in 2014, emphasised the importance of focussing on education – “…on families with children and youths – as this is when decisions about human capital accumulation are made — promoting employment for disadvantaged groups through active labour market policies, childcare supports and in-work benefits”. There is no doubt that focussing redistribution efforts on families with children can help reduce poverty, as this is where key decisions on future human capital investment are made.
Upcoming seminars at Public Affairs Ireland:
Certificate in Public Sector Financial Management- March 25th
Policy Development, Legislative Drafting , & the Legislative Process- April 16th & 30th