The Minister for Social Protection, Joan Burton TD, has welcomed the publication today (13th February, 2013) of the Survey on Income and Living Conditions 2011 by the Central Statistics Office.
Minister Burton said: “The new data reveals the continuing impact of the economic crisis on household income and living standards in 2011, but also underlines the crucial importance of social welfare in protecting the most vulnerable.”
The Minister welcomed the clarification by the CSO of the 2010 data on income inequality in Ireland, which shows that the impact of the crisis has not worsened income inequality. The key indicators of income inequality – which measure the gap in income between the most well-off and least well-off in society – are exactly the same in 2011 as in 2007, before the crisis.
The Minister noted in particular the 2011 rate of consistent poverty of 6.9%, which is the basis for the national social target for poverty reduction. “Last year, the Government re-affirmed its commitment to reduce consistent poverty from 6.3 per cent in 2010 to 4 per cent by 2016 and 2 per cent or less by 2020. Today’s figures show the importance of the target, the need to address the heavy burden of poverty carried by certain social groups and the challenge for Government and society in meeting the target.”
The Minister said a positive finding from the report is the key role of social transfers in reducing the at-risk-of poverty rate from 51 per cent (before social transfers) to 16 per cent after social transfers. This represents a poverty reduction effect of 60 per cent. Compared to other EU countries, Ireland’s system of social transfers is the most effective in reducing poverty and is far superior to that of other countries most affected by the crisis (Estonia, Greece, Portugal, Spain and Britain). In 2011, the average poverty reduction effect of social transfers in these countries was 29 per cent, just half the Irish performance.
Minister Burton said: “I have been very conscious of how crucial our welfare expenditure has been in protecting the most vulnerable and minimising poverty during the economic crisis. This is precisely why I protected weekly welfare payment rates in Budgets 2012 and 2013.
“The high rate of unemployment is clearly having a negative impact on poverty. Last year, my Department published a new ESRI study which showed that Ireland has a particularly severe structural problem of jobless households, which account for 23 per cent of the population aged 0 to 59 years. This problem dates back to before the crisis began, and was made worse with the rise in unemployment. To address this structural problem, we are going to set a new sub-target for reducing poverty in jobless households.”
The Government is strongly pursuing active labour market policies through the establishment of Intreo – the one-stop shop employment support service for jobseekers - and the increased provision of training and childcare places in Budget 2013.
Minister Burton said: “My Department is spending €20.257 billion in 2013 accounting for almost 39% per cent of current Government expenditure. The services provided by my Department impact on the lives of almost every person in the State. Some 1.35 million people each week receive a social welfare payment and, when qualified adults and children are included, almost 1.54 million people in all benefit from weekly payments. In addition, we pay Child Benefit to some 609,000 families in respect of over 1.16 million children each month.”
Minister Burton concluded: “The Government is committed to ensuring that the least well off in society are protected from the social impact of the crisis and are enabled to benefit from the economic recovery and new employment opportunities. It is clear that the welfare system continues to be very effective in bolstering low incomes and reducing the risk of poverty.”
Note to Editors:
The Survey on Income and Living Conditions (SILC) is an annual survey carried out by the Central Statistics Office (CSO) of a representative sample of more than 4,000 households or 11,000 individuals in Ireland. The survey collects information on the income and living conditions of different households in Ireland, in order to derive indicators on poverty, deprivation and social exclusion. It is carried out in every EU country under EU legislation and commenced in Ireland in June 2003. The preliminary findings for 2011 can be found at: http://www.cso.ie/en/index.html
Consistent poverty is the measure used to set the national social target for poverty reduction. It is the overlap of at-risk-of poverty (below 60 per cent of median income) and basic deprivation (enforced lack of two or more basic necessities). The latest official figures show that the consistent poverty rate was 6.9 per cent in 2011.
The policy briefing and related documents on the national social target for poverty reduction are available at www.welfare.ie and www.socialinculsion.ie.
Income inequality is measured in two ways. The Gini coefficient is the relationship between cumulative shares of the population arranged according to the level of income and the cumulative share of total income received by them. If there was perfect equality (i.e. each person receives the same income) the Gini coefficient would be 0%. A Gini coefficient of 100% would indicate there was total inequality and the entire national income was in the hands of one person. The second measure is the quintile share ratio which is the ratio of the average equivalised income received by the 20% of persons with the highest income (top quintile) to that received by the 20% of persons with the lowest income (lowest quintile).