Mr. John McGeady:

This is something for which Social Justice Ireland has been advocating for years. It is a really basic principle of social justice that the best way to ensure that we lift people out of poverty is through indexing social welfare rates. We have seen that social welfare transfers make a huge difference in reducing the poverty rate. We know it works from that perspective. It is crucial in terms of providing people with stability and certainty. It also provides stability to our public finances.

We have argued very strongly that indexation or benchmarking should begin with a rate of 27.5% of average earnings. We would say that a key thing to linking it to average earnings is that it does not allow income gaps to grow between those who rely on social protection and social transfers and those who are in gainful employment. There are two aspects to this. First, it embeds adequacy into the system. Second, it also mitigates against growing income inequality in our system.