13/02/2013

New Data Highlights Importance Of Social Protection In Reducing Poverty

The Minister for Social Protection, Joan Burton TD, has welcomed the publication today 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.

(CD/GK)

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