Ms Michelle Murphy:

From the perspective of Social Justice Ireland, income adequacy and building energy efficiency must be addressed in tandem if we are tackle the number of people and households in energy poverty and poverty in general. We know that the cost of energy was one of the main drivers of inflation up to March 2023. It accounted for a quarter of the annual change in the consumer price index. Looking at the five-year period since 2018, the price of electricity, gas and other fuels for home heating has increased by 102%. Absorbing such a price increase has an impact on every household. However, that impact is most acute for households on the lowest incomes, particularly those in the bottom 20% of the income distribution. This is because these households spend a greater proportion of their income. The also spend a greater proportion of this income on energy and food so they are most exposed to these price increases.

There is a significant concentration of individuals who are unemployed, long term ill or disabled, living alone and single parents in these bottom two deciles. Targeted measures to support these welfare dependent households will be an essential part of a policy response to energy poverty.

To look briefly at arrears, the most recent data from the CSO show that one in ten households are in arrears on a utility bill, with 7% missing two or more payments. However, if we look at households in deprivation, one in three are in arrears on a utility bill.

Regarding health status, one in five households with a person who is severely limited in daily activity - from a long-term illness or disability - failed to pay a utility bill on time at least once last year. These trends give an indication of the impact of high energy prices and energy poverty on low-income households. It is clear that adequate levels of social welfare are essential to address poverty and energy poverty. While the Government has introduced a number of very welcome packages, including budgetary measures to mitigate the impact of rising costs, they have failed to address the core issue of income adequacy as many of the measures have been one-offs.

We have consistently called for the benchmarking of core social welfare rates to 27.5% of average weekly earnings and a system of indexation to be introduced to ensure security and certainty for people on fixed incomes. In budget 2024, we are calling on the Government to increase core social welfare rates by a minimum of €25, to commit to a benchmark equivalent to 27.5% of average weekly earnings and to develop a pathway to index core social welfare rates to the minimum essential budget standard over a five to seven-year period.

Energy efficiency is the second pillar of addressing energy poverty. However, barriers persist for low-income houses in accessing grants. While we welcomed the announcement of the national retrofitting programme, particularly the free energy upgrade for households in receipt of social welfare payments, we are concerned that the upfront costs associated with the one-stop shop service and individual energy upgrade grant schemes remain a barrier to many low income households. Too often, subsidies are only taken up by those who can afford to make the necessary investments and end up functioning as a wealth transfer to households on higher incomes who can afford that investment, while the costs are regressively socialised among all users. There is a need to look at the barriers that are present for low-income households and how these can be addressed.

Many of the households experiencing energy poverty are in the rental sector and consequently cannot avail of some of the available schemes. For those renting in local authority housing, the Government must invest in a State programme of retrofitting to ensure those homes are fully retrofitted to the highest possible energy standard. In the case of the private rented sector, we agree with the recommendation of Friends of the Earth that the warmer homes scheme be expanded to include properties, if the tenant is in receipt of the housing assistance payment, HAP. However, eligibility should be contingent on the landlord providing a long-term lease to the tenant.

In addition, we call on the Government to integrate a building renovation passport scheme into the national retrofit plan. This should be fully aligned with existing BER systems and existing retrofitting finance.

However, it would facilitate a more step-by-step approach to retrofitting which could be more financially appealing and manageable for many households.

In summary, for Social Justice Ireland, the issues of income adequacy and building energy efficiency must be addressed in tandem to reduce the number of people and households in energy poverty.