Oireachtas Joint and Select Committees
Wednesday, 18 June 2025
Joint Committee on Social Protection, Rural and Community Development
Effect of Child-related Benefits on Child Poverty and Deprivation: ESRI
2:00 am
John Paul O'Shea (Cork North-West, Fine Gael)
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Witnesses and members are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable, or otherwise engage in speech that would be regarded as damaging to the good name of the person or entity. Therefore, if witnesses' statements are potentially defamatory in respect of an identified person or entity, they will be directed to discontinue their remarks. It is imperative that witnesses comply with any such direction I might make.
Members attending remotely are reminded of the constitutional requirement that to participate in a public meeting, they must be physically present within the confines of the Leinster House campus. This is due to the constitutional requirement that to participate in a public meeting, members must be physically present within the confines of the place where the Parliament has chosen to sit. In this regard, I ask any members participating remotely online via the MS Teams platform to confirm that they are on the grounds of the Leinster House campus if they wish to contribute to the meeting. I remind all in attendance to ensure their mobile telephones are switched off or in silent mode.
I welcome the witnesses from the Economic and Social Research Institute, ESRI: Dr. Karina Doorley, associate research professor; Mr. Bertrand MaÌtre, senior research officer; and Ms Simona Sándorová, research assistant. The committee welcomes the opportunity to engage with them on the ESRI’s output and publications on many areas relevant to its work. The issue we are addressing today is pressing and one that featured prominently at the National Economic Forum on Monday last. I now invite Dr. Doorley to make her opening remarks.
Dr. Karina Doorley:
I thank the Chair for the invitation to appear before the committee. I am joined by my colleagues Bertrand MaÌtre and Simona Sándorová. We are grateful for the opportunity to appear before the committee today to discuss our recent report, The Effect of Child-related Benefits on Child Poverty and Deprivation in Ireland.
Child poverty is of growing concern in Ireland and internationally due to the growing body of evidence on the detrimental effects of childhood socioeconomic disadvantage on children, both in the short term and the long term, through the loss of education, earnings and health. In Ireland and in many other countries over the past few years, the rate of child poverty has typically been higher than the rates of poverty among other age groups of the population, according to many poverty metrics. Our research aims to understand the effectiveness of current policies and explore potential reforms to further reduce child poverty.
Measuring child poverty is complex due to its multidimensional nature. Ireland’s current national poverty target, as defined in the Roadmap for Social Inclusion 2020-2025, is based on the concept of consistent poverty, which combines income poverty and material deprivation to identify the most vulnerable groups in society. Income poverty is measured using the at-risk-of-poverty, AROP, rate: individuals living in a household where the income is lower than 60% of the national median income, adjusted for household size and composition, are considered at risk of poverty. Material deprivation is measured by self-reported answers to survey questions about the household’s ability to afford essentials. People are considered to experience deprivation if they live in a household that cannot afford two or more of the 11 basic deprivation items. Those who are at risk of poverty and materially deprived are considered to be in consistent poverty.
The 2025 target consistent poverty rate for the population as a whole is 2% or less. There is currently no specific target for the child consistent poverty rate, though the national policy framework in Better Outcomes, Brighter Futures set a target to lift 70,000 children out of consistent poverty, with a deadline of 2020. The deadline has since been extended to 2025.
Using the SWITCH tax-benefit model, we investigated the impact of Ireland’s current system of child-related benefits on child poverty and deprivation. Our findings show that these benefits significantly reduce child poverty rates. Specifically, in-cash child-related benefits reduce the child AROP rate by 10 percentage points, while in-kind child-related benefits reduce the child AROP rate by 1.5 percentage points. Without child-related benefits, child poverty rates would be considerably higher. For instance, we estimate that, for 2025, the child AROP rate would increase from 13.9% to 27%, the child material deprivation rate would increase from 19.5% to 23.3%, and the child consistent poverty rate would rise from 5.6% to 13.6%. These benefits lift approximately 157,000 children out of income poverty, 45,000 out of material deprivation and 94,000 out of consistent poverty.
There are a number of ways that policy can tackle child poverty. One such way is increasing the earnings of families with children by reducing barriers to work. Another is the provision of more free services or in-kind child benefits. A third is to increase targeted welfare payments to low-income families with children. Our research focused on the latter channel and we considered several reforms to the tax benefit system that could further reduce child poverty. These include increases to child benefit, child support payments, CSPs, and the working families payment, as well as the introduction of a means-tested second tier of child benefit. Among these, we found the second tier of child benefit to be the most cost-effective reform. This reform would integrate CSPs with a modified working family payment, allowing all households with children to receive an amount determined by their means. For an annual cost of €773 million, it would reduce the child AROP rate by 4.6 percentage points, the child material deprivation rate by 0.7 percentage points and the child consistent poverty rate by 2.1 percentage points. Our analysis suggests any such reform should be designed carefully to avoid income losses for some households. The effects of a second tier of child benefit on work incentives should also be investigated to ensure they do not overly discourage employment.
I thank the members for their attention. We will be happy to answer any questions they have.
John Paul O'Shea (Cork North-West, Fine Gael)
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I thank Dr. Doorley. Several members have indicated they wish to contribute, the first being Deputy Aird.
William Aird (Laois, Fine Gael)
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I thank our guests for coming here today. I have put a few questions together that I would like them to endeavour to answer, if they can. How effective are existing child-related benefits at reducing poverty in Ireland? Which specific ones have the greatest impact?
Dr. Karina Doorley:
The research we did investigated the current system of child benefits, both in kind and in cash. We examined anything related to children, not the things specifically targeted at children but those that change depending on the presence and number of children. We investigated the system as a whole, distinguishing only between in-cash benefits and in-kind child benefits. We found that in-cash child benefits have the largest effect, having reduced the AROP rate by 10 percentage points. I am referring to the likes of child benefit, the one-parent family payment and the working family payment – all of those measures that represent an actual cash transfer to households. In-kind benefits, such as free school meals, free schoolbooks, GP visit cards and childcare subsidies, also have a measurable effect on child poverty, reducing the AROP rate by 1.5 percentage points.
William Aird (Laois, Fine Gael)
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That is grand. Does the report highlight any gaps in current supports, such as for children in one-parent families, migrants or low-income working households?
Dr. Karina Doorley:
It depends on what the Deputy means by a gap. What we identified is that the current system is doing a really good job. It is lifting a considerable proportion of children who would otherwise be poor above the poverty line, but there is still a problem with child poverty. It is not a problem that is specific to Ireland. There are many European and other OECD countries where child poverty rates are higher than the rates among the rest of the population.
William Aird (Laois, Fine Gael)
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That is lovely. What evidence does the ESRI provide on long-term impacts of increased child benefits and education and health outcomes?
William Aird (Laois, Fine Gael)
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That is grand. I just wanted to know the effect on young children.
How does Ireland compare with other EU countries on spending efficiency and child poverty reduction via social welfare protections?
William Aird (Laois, Fine Gael)
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What policy changes does the ESRI recommend based on its analysis and what are the fiscal implications of these changes?
Dr. Karina Doorley:
It all depends on policy objectives. If we are to use the welfare system to target child poverty, the most cost-effective way to do so is through a second-tier child benefit because it is targeted and reaches all children, regardless of whether their parents are receiving welfare or are at work. With regard to cost-effectiveness, that would be a recommendation. That is obviously not the only consideration.
Mark Wall (Kildare South, Labour)
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I thank the witnesses from the ESRI very much for coming in. Unfortunately, we have to use statistics and percentages even though we are talking about children, and obviously one child in poverty is one child too many. I know the witnesses would accept this point too. Regarding what was put before us today in respect of there being a cost of €773 million for a second tier of child benefit, that is to be means-tested, according to what the witnesses told us, so could they break down that means test for us? Where would it start and finish and how many people would that €773 million assist?
Turning to the statutory targets, and I am returning to the statistics, should we have statutory targets here like those that exist in Scotland and other countries? I know the witnesses said they are only looking at other countries now, but a lot of emphasis seems to be being placed on this aspect in other countries now. In Ireland, however, we do not seem to have statutory legislation on child poverty. I would like to get the witnesses' opinions on this point.
Going back to the means test, if it was introduced, does the ESRI think there will be a significant reduction in child poverty? I ask this question given it was said that the rate would go from 13.9% to 27% without the existing child benefit. I am again using percentages, unfortunately, but this is what we must use. If the second tier of child benefit was introduced for a cost of €773 million, by what percentage does the ESRI think we could reduce child poverty?
Dr. Karina Doorley:
On the means test, we designed this proposed reform - and it is definitely not the only way it could be designed - by piggybacking on the working family payment. All this means is that we would remove the work requirement from the working family payment. It then becomes a means-tested payment for all families with children. The means-testing itself is exactly the same as what is done in the context of the working family payment. This means a family gets 60% of the difference between their weekly income and the income threshold, and that income threshold depends on how many children they have. That is how we do the means-testing. If a policy like this was introduced, we estimate it would reduce the child-at-risk-of-poverty rate by 4.6 percentage points. This is a fairly sizeable decrease and higher than what we estimate for any of the other proposed reforms that cost the same.
On whether we should have statutory targets for child poverty, we are not hitting our targets now. I do not know if having a statutory target in this area would make it more important to hit the target. I do not know what it would depend on, but perhaps Mr. MaÌtre would like to comment.
Mr. Bertrand MaÌtre:
The only target, as Dr. Doorley mentioned, is based on lifting a certain number of children out of poverty. I refer to lifting 70,000 children out of consistent poverty from the base that was designed in 2011. There were 111,000 children in that position at the time. This is the only target that exists, but it is not exactly the same as the one that has been designed for the total population, where the target is just to have a rate of consistent poverty of 2% or less by 2025. We have not, however, been going in this direction recently. The latest CSO figures show the rate of consistent poverty for children increased from 5% to 8%. More than 45,000 extra children were in consistent poverty, so we are not going in the required direction.
Mark Wall (Kildare South, Labour)
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In the context of the working family payment, it was mentioned – not by the ESRI – that a decision by a government to introduce a second tier of child benefit payment could impact people's ability or desire to go back to work. Has any work been done on this aspect and what the impact might be? I would also like the witnesses to comment on the not trying effect. Obviously, many people do want to get back to work. If a second tier of child benefit were to be introduced, then, how would it impact people's desire to get back to work?
Dr. Karina Doorley:
We have had a look at the work incentive impact of all these reforms. It is not published work but work in progress. I think this is the next step here. When designing a measure to reduce poverty or child poverty, we will always have a tension between providing a safety net that is adequate and incentivising people to work and to take themselves out of poverty. The policy mix chosen in this regard really depends on which is more important. If the overarching goal here is to reduce child poverty at all costs, then maybe we can live with the work incentive effects. These policies do damage work incentives, but there are ways in which you could try to mitigate those impacts, such as changing taper rates or allowing people to keep some of their benefits for a certain time after they go back to work, in the same way as is done for things like medical cards. There is never a perfect solution to something like this, so it is really all about the trade-offs.
Johnny Guirke (Meath West, Sinn Fein)
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I thank the witnesses for coming in. How many children in Ireland are in poverty now? How many children would a second tier of child benefit lift out of poverty? What are some examples of in-kind child benefits mentioned in the report and how do they contribute to reducing child poverty? Why do the authors suggest that tracking at-risk-of-poverty rates based on household income, including in-kind benefits, could be beneficial? What long-term effects are associated with childhood poverty, as highlighted by the ESRI?
Dr. Karina Doorley:
The in-kind benefits we looked at were free schoolbooks, free school meals, age-based GP visit cards, medical cards and means-tested GP visit cards, the national childcare scheme subsidies and the free preschool year. I think that is everything. The primary policy goal of those in-kind benefits is not to reduce poverty, but to improve school attendance or bring about better child outcomes or better child health. Those in-kind benefits, though, also have a measurable effect on living standards. This is why we suggested it might be worth keeping track of this aspect. In recent years, the Government has moved more towards the provision of these free services, so it is worth tracking them to see their impact. If we put a lot of money into this area, it is nice to see how it shows up in things like poverty statistics. We would suggest, therefore, that this is something that could be an alternative poverty measure. We already track after housing costs measures of poverty, so this would just be another sort of metric along those lines. I ask Mr. MaÌtre to comment on the number of children in poverty.
Mr. Bertrand MaÌtre:
I have those numbers. Based on the latest CSO release, based on the SILC survey for 2024, the poverty rate for children in 2024 was 15%. This is the equivalent of 185,000 children in Ireland being below the poverty line. When we look at the measure of deprivation Dr. Doorley mentioned earlier, namely, a household lacking basic necessities, the deprivation rate for children is just above 21%. This represents 256,000 children in Ireland living in households unable to afford the basic necessities. In terms of consistent poverty - the overlap between being below the poverty line and experiencing basic deprivation - 8.5% of children are living in consistent poverty, or just over 100,000 children. Quite a large number of children are living in those conditions.
Also mentioned earlier was the increase between 2023 and 2024 in consistent poverty. The increase saw the total go from 58,000 children to more than 100,000 children. It was a very large increase. We do not know exactly what is behind the increase. We will have to wait to see with next year's survey if this was just a peak and it will have gone down. Additionally, very often there are some people living just above the poverty line who are deprived. If there is any change in their household income, then they fall into consistent poverty. Those households that were just above the poverty line and then fell into consistent poverty could be another aspect of the situation too.
Johnny Guirke (Meath West, Sinn Fein)
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Would the witnesses like to see a situation in the context of child benefit where there was a certain budget that could go a lot further? I refer to a situation where child benefit was means-tested and an awful lot more being available for the people who need it the most. What is the witnesses' opinion in this regard?
Dr. Karina Doorley:
On the subject of universal child benefit, there is a case for it. All means-tested benefits have a take-up issue. This means that if the rules of a particular benefit are opaque or something like that, then there will not be full take up. Not everyone eligible will actually apply for it.
Sometimes there is as stigma associated with means-tested benefits as well. Households feel like it is not for them or do not want to be claiming that. There is an issue when you means-test something, where not everybody who is entitled to a benefit will take it up. Sometimes the households that do not take it up might be those that are the most vulnerable because the administrative burden for them to apply is quite high and they do not have the capacity. There is still a case for a universal child benefit. One of the things that came out of some research we did over the financial crisis was the fact child benefit is systematically paid to the mother actually reduced the gender discrepancy in how policy affected men and women over time because that child benefit acted as a buffer to women's income. There are a number of reasons why we might want to keep a universal payment and add a means-tested payment.
Anne Rabbitte (Fianna Fail)
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I really welcome this Economic and Social Research Institute report. A bespoke piece of work like this gives us a great understanding and a wider context. At the end of the day, it helps us form policy and a direction when it talks about €773 million, because the budget last year for social protection was about €2.5 billion. I was doing a bit of research to see if there is money in the pot, and that is what has been consistently in the pot. When we look at how the report has been done, income poverty and material deprivation are used as the two measures or the two tools. When we look at the income poverty aspect, the witnesses touched on that relating to the single parent and also talked about the female. In our previous contributions we were talking about widows' pensions. If a widow is receiving a widow's pension they cannot get sick because they cannot have illness benefit or they cannot have a second contribution, that means that family is severely impacted. That heightens our conversations around that. In situations where a parent is disabled, and the associated poverty within that family, how does that impact on the children? One can only guess. Have witnesses broken down the categories that makes up the low-income families?
Mr. Bertrand MaÌtre:
Every time we look at the profile of the households who are more likely to experience income poverty or deprivation, we find is always lone parents or households where someone has a disability. For example, as the Senator just mentioned, we can see children living in a household where someone has a disability are much more likely to be at risk of poverty and to experience material deprivation. There is a cost associated with disability which means people might have a certain level of income, but they cannot translate that into a decent standard of living because of that cost of disability. Very often, as the Senator mentioned, it is lone parents, or, for example, people with a disability or people with a lower level of education. Those are really strong predictor factors for experiencing poverty and deprivation.
Anne Rabbitte (Fianna Fail)
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I want to tease that out a little bit further. There is the figure of 195,000 children, and then there is a figure of 100,000 children in consistent poverty. Have the witnesses the data behind that research to say it is X number of families of lone parents that fall into that category? Or, it is X number of families that are in receipt of the disability allowance, for example. The disability allowance is means-tested as well. Do witnesses have those statistics?
Mr. Bertrand MaÌtre:
I do not have those numbers but we can extract them. It is possible to do that. To look at the set in terms of composition and the exact profile of family type but also, what kind of income they are in receipt of and so on. It is something that can be done. I do not have any numbers here to provide the Senator with.
Dr. Karina Doorley:
The last piece of work we did on profiling people in poverty found half of children in poverty were either the children of people with a disability or of lone parents. That is the ballpark.
Anne Rabbitte (Fianna Fail)
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Straight away that is an identification as to where we should be, at a very minimum, raising the bar. That is very important and I thank the witnesses for their contributions.
Catherine Ardagh (Dublin South Central, Fianna Fail)
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The statistics and the research the ESRI has done show how important the in-cash child benefit model is. This is a position paper, a research paper. How quickly do witnesses think this can be introduced? Is there draft legislation? I know they have to work with the Minister, but it seems like something we have to prioritise as a matter of urgency.
Catherine Ardagh (Dublin South Central, Fianna Fail)
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People are watching. When we hear discussions in the media around child benefit, people think some of it is going to be taken away from some people. Obviously, there is anxiety around that given the history of the child benefit payment in Ireland. To be clear, the proposition is that the universal child benefit will remain. This is a second, top-up child benefit to those families who really need it.
Catherine Ardagh (Dublin South Central, Fianna Fail)
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I am following on from my colleague's question about the profile of recipients. Does the research take into account the urban and rural divide, the age of the children, whether they are lone parents, or if someone in the family or that child has a disability when assessing who is eligible for the second tier?
Louise O'Reilly (Dublin Fingal West, Sinn Fein)
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I apologise for not being here at the beginning. I was speaking in the Chamber, but I did read the submission. There is some very interesting information in it. It references the need to reduce the barriers to work. I am sure I am not the only person grossly offended by Simon Harris telling people to just get off their backside and get a job and that will get them out of poverty, which, of course, we know it will not because the rates of in-work poverty are actually increasing. When the report refers to barriers, is it talking about the cliff edge or are there other barriers that we, as a committee, should be aware of?
Dr. Karina Doorley:
There are lots of things we could consider a barrier to work. The ones that we have worked on in the past, and we have evidence they really do hinder peoples' ability to work, are the provision of affordable, available, good-quality childcare and the same for elder care. There are lots of people who are either caring for children or caring for an elderly person or a relative. That is a barrier to them working if they want to do so. Things like joint taxation provides a disincentive for secondary earners to work, meaning, the household's lower earner's potential to work. They typically tends to be women. There are other aspects in the tax and welfare system that could be considered cliff edges and disincentives to work. Those would be a little bit more specific They could be things like the four and seven rule for social welfare payments, and things like that. Things that are fairly straightforward to address and other things that are quite complicated to address.
Louise O'Reilly (Dublin Fingal West, Sinn Fein)
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There is a range of issues there. The one around childcare is really important because that is a big consideration for people who need to go to work. There is no variability. If you are on a low income or you are a multimillionaire, you are likely paying the same for childcare. There is absolutely no distinction made there. In terms of assessing the at risk of poverty and the levels of poverty, there is an important piece of work. It is not being missed by the witnesses but it is being missed in general, namely, the difference between young children and teenagers. We know the households most at risk of poverty are lone parents with teenagers in the family. How can we isolate that?
Would it become overly complicated to have a tiered form of additional means-tested child benefit, gradated first? It is an issue everywhere. It is an issue with the school meals programme. Clearly a four-year-old does not eat the same amount as a 16-year-old but they all get the same allowance. I understand that it might be complicated. On the one hand, we have a hungry child but on the other hand we have food waste and there has to be some way to balance that out. Would be possible or would the complications actually turn people off applying? I am aware that people can sometimes get anxious about having to fill out large forms and provide massive amounts of information. It is also right to say that there is a stigma surrounding means-tested benefits in particular. Is it possible or would it just be overly complicated to try to do something like that?
Louise O'Reilly (Dublin Fingal West, Sinn Fein)
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Does Dr. Doorley think that would be worth doing or is it not as significant a factor? I know the at-risk-of-poverty rates are higher for one-parent households that have teenagers in them but is the difference not enough to warrant the complexity that might be created or would it be worth exploring?
Louise O'Reilly (Dublin Fingal West, Sinn Fein)
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I am conscious that anything that requires a ten-page brochure is not really going to do it at the end of the day. I have read the ESRI report and I have read plenty of others and understand people are in poverty because they do not have enough money and in-cash transfers are really the only way. It is as basic and as simple as that. It is a question for us, as a committee, to consider how best we can achieve that goal.
My last question relates to the Government's child poverty strategy. The date on it has been pushed out. We were due to have results by 2020 but the date on it has been pushed out again. On the current track, if nothing changes and we just have Government policy exactly as it is now, are the rates of children in consistent poverty likely to stay the same, get worse or get better? We all envisage and hope that there will be a change in the budget, specifically to tackle child poverty which is something that this and the previous Government have shown themselves not to be massively interested in. If nothing changes, what are we looking at in terms of rates of consistent child poverty?
Mr. Bertrand MaÌtre:
We are definitely not going to reach the targets anyway so I presume the Government and the Department of Social Protection are thinking of setting out new targets. The framework, as the Deputy said, was for between 2020 and 2025. We will be at the end of that in six months so I presume the Department is trying to set out a new target for children. We have one for the total population but we are not going in the right direction.
Louise O'Reilly (Dublin Fingal West, Sinn Fein)
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We are not going in the right direction.
John Paul O'Shea (Cork North-West, Fine Gael)
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On my own behalf, I very much welcome the report that was published last week demonstrating that cash in kind benefits significantly reduce child income poverty and deprivation. I am interested in core welfare payments and the need to look at everything in the round, including the hot school meals programme, the free books scheme, free GP care for children under eight, the medical card scheme, the increased funding for a national childcare scheme and so on. How does the ESRI measure the impact of all of those broader programmes on child poverty?
John Paul O'Shea (Cork North-West, Fine Gael)
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Was that included?
Dr. Karina Doorley:
We do not tend to include the medical card because there are so many ways to measure the value of a medical card. There is the cost to the State versus the value to the individual. Those are two very different things so we tend to not include that because depending on the option one chooses, it can have vastly different effects.
John Paul O'Shea (Cork North-West, Fine Gael)
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Obviously without a medical card, the costs are quite high for a family.
Dr. Karina Doorley:
Yes, the value to a family can be very different from the cost to the State, depending on things like age and the amount of healthcare they actually need. It depends on how we measure it. Whether it is based on cost or value can drastically change the profile so we tend to not put that in as standard. However, the Department of Health does have access to that model and can run its own analysis using that. We tend to put in in-kind benefits that we are confident we are measuring robustly and that make sense in terms of how we value them. Valuing in-kind benefits is complicated but once we are sure that we are doing a good job of valuing them, we do that. Last year we did a five-year profile of the effect of the last five budgets compared with a scenario in which everything had to have kept pace with wage inflation. The free schoolbooks and school meals actually stood out there. They were turning everything from very negative to slightly positive for the lowest income groups and then negative throughout. It is worth measuring and keeping track of that.
John Paul O'Shea (Cork North-West, Fine Gael)
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One thing that has come back to us regarding the hot school meals programme is the cost savings for a family. The free book scheme has allowed families to have that extra bit of income too.
In terms of data from the CSO, often there is a time lag. A lot of the figures released by the CSO did not take into account items introduced in budget 2024, for example, or budget 2025. How does the ESRI take that into account as part of its report?
Dr. Karina Doorley:
Our analysis is based on a simulation for the current year, 2025. We are using the same data that the CSO has but when we put it through our model, it accounts for updates to the tax and welfare systems since then. That is why our simulated poverty rates are different from the most recent ones from the CSO. They are for 2025 rather than 2024 and are simulated rather than being based on actual data. We are simulating the tax and welfare system. The report that we have been discussing is based on a simulation of 2025.
John Paul O'Shea (Cork North-West, Fine Gael)
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Finally, on the proposal for a second child benefit scheme, the ordinary child benefit payment is €140 per month, which is €1,600 per year. Added to that is the child support payment, which is €50 for children under 12 and more than €60 for children over 12. How does the ESRI envisage a second tier child benefit payment would fit in with all of those schemes? I refer not just to child benefit itself but the child support payment, working family payment and so on. How would a second payment fit in with those schemes?
Dr. Karina Doorley:
It is complicated because of the number of schemes. If we take things like the carer's allowance and disability allowance, there are different means disregards for those two payments. Adding on another means-tested payment for two families on those two different payments does make things a bit complicated. In some cases, families would lose out.
John Paul O'Shea (Cork North-West, Fine Gael)
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Is it too complicated? As Deputy O'Reilly and others have mentioned, if things are too complicated, people will not apply. Often, it is the people who really need to apply who find it too complicated and just do not bother.
Dr. Karina Doorley:
I completely understand that. We estimate that the working family payment at the moment has a take-up rate of just over 50%, which is not great if we are trying to use that as an anti-poverty tool for the working poor. It is complicated to fit something else into the system which is why we piggybacked on something else that was already there. Rather than introducing another payment and trying to fit it in, we just modified an existing payment. We also took out the CSPs when we were modelling this because our idea was that all children should get the same payment, rather than children of families on social welfare getting one thing and children of families in work getting another thing. That is the way we have modelled it but there are, of course, other ways to model it. There are other ways to take into account policy objectives, whether they be really maintaining incentives to work, in which case we might want to keep that distinction between social welfare and work, or something else.
John Paul O'Shea (Cork North-West, Fine Gael)
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In terms of the cost, it is estimated to be in excess of €700 million. How did the ESRI come up with that costing? Where does it see the means test sitting? Does the ESRI have a figure in mind for the means test, such as, let us say, anyone with more than €50,000 does not qualify? What is the ESRI suggesting in that regard?
Dr. Karina Doorley:
For the costing our switch model is for the whole population. It is based on representative survey data.
That allows you to simulate the income distribution, like how many children are in poverty at the moment. Then you can change the rules of the tax-benefit system and apply those changes to the same population and see how things change. That automatically spits out a costing. You have a certain number of families getting a certain percentage more, and grossing that up to the population level gives you the costing €773 million. We did the same for the other policy reforms we modelled.
There was a second question about the means-testing. Because it is the same as the working family payment means-testing, there probably is a specific income limit beyond which you would get nothing, but it depends on the number of children you have. For example, a family with eight children has its own income limit in the working family payment means-testing.
John Paul O'Shea (Cork North-West, Fine Gael)
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It is good to see that the programme for Government commits to examining this and it is important that this committee would flesh that out in more detail.
Do any other members have any comments or questions?
Sarah O'Reilly (Aontú)
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On the point of the poverty rate, or the target, it is set by the Irish Government, in the Department. Is there a European target, or how do we compare? Has the ESRI done comparisons with other countries?
Sarah O'Reilly (Aontú)
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I am interested in the tax-benefit system. Has the ESRI done any work on looking at the potential of tackling tax individualisation? The system penalises one-income families.
Sarah O'Reilly (Aontú)
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Has the ESRI engaged with Mary Reader's work? She has published in the Journal of Health Economics. She found that a small child benefit sum paid to mothers during pregnancy resulted in infant health gains. The cost-of-living survey also made interesting points about this and how a drop in income during pregnancy can impact the child poverty rate of other children. Has the ESRI looked into that or done any research on it?
Sarah O'Reilly (Aontú)
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I had a question about the means test as well and how the witnesses would implement that, but they have answered it.
John Paul O'Shea (Cork North-West, Fine Gael)
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I call Senator Rabbitte.
Anne Rabbitte (Fianna Fail)
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Thank you, a Chathaoirligh, for letting me in for just a quick question. Going back to the figure of 100,000 children, is the €770 million cost solely for the 100,000 children? Is it the cost for the 195,000 children? I am just trying to work out that figure of €770 million. What does it equate to in the number of children?
Anne Rabbitte (Fianna Fail)
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It would cost €770 million. That is an important one for us to know, Chair, as to what we have to benchmark against when we are looking at making submissions to the Minister. That €770 million is to take 25,000 children out of consistent poverty.
John Paul O'Shea (Cork North-West, Fine Gael)
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And 50,000 out of income poverty.
Anne Rabbitte (Fianna Fail)
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That income poverty could also be looked at on the means side of things or on disregards because it puts more money, on whatever basis, back into the parents' pockets.
John Paul O'Shea (Cork North-West, Fine Gael)
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I have a supplementary question. Has the ESRI done any research on the child support payment or the follow-up on that? Has there been a take-up on that? For example, it was mentioned that the 50% take-up on the working family payment is quite low. Has the ESRI done any research on the child support payment? I know many people might not be aware that there is an additional payment on top of the child benefit payment that could be available to them.
John Paul O'Shea (Cork North-West, Fine Gael)
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We might research that ourselves and take it on board on the committee.
Are there any other questions or queries?
William Aird (Laois, Fine Gael)
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May I just ask one simple question? It is a follow-up. I thank the witnesses for answering the questions earlier. When there is no take-up, is there a reason for that? Has the ESRI ever fleshed out the reason?
Dr. Karina Doorley:
There is a lot of literature on this because if money is on the table, you would assume people would apply for it. Stigma is a big reason. Some people do not apply for welfare because they feel like they should not or that welfare is not for them. They do not want to be tarnished by that welfare stigma. It might be complicated. The rules might be complicated. For example, I think the means test for the medical card is different from a lot of other things because you can deduct a lot of your expenses in order to qualify. You can deduct childcare expenses, housing expenses and things like that, and then that is the income that is assessed for eligibility for a medical card. Many people just do not know that so they do not know they are eligible. Finally, the process itself may be arduous. With the old family income supplement, I think you used to have to get a signature from your employer to validate your claim. Maybe some people did not want to go to an employer for a signature or that made it overly complicated. There are a number of reasons. I do not think we have separated out how much of it is due to which reason. We have done some work-----
William Aird (Laois, Fine Gael)
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On the question then, we will go back to the employer. What is Dr. Doorley's opinion on that? Should they have to do that? Should they have to go and personally talk to their employer about what they are doing? I ask for Dr. Doorley's answer on that.
William Aird (Laois, Fine Gael)
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That is grand. That answers my question.
John Paul O'Shea (Cork North-West, Fine Gael)
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If today proves anything, it is that a lot more research is needed to try to see if we can address the issue of child poverty. Certainly, from a social welfare or a social protection point of view, a lot of discussion needs to happen as to how we try to improve these situations. We have the example Deputy Aird just gave of the family income supplement, which is now the working family payment. There is a stigma associated with applying for a lot of these.
Sarah O'Reilly (Aontú)
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It is a matter of information as well, Chair. You mentioned a payment there. What payment were you talking about, may I ask?
John Paul O'Shea (Cork North-West, Fine Gael)
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It is the child support payment. It was the qualifying child payment before. Now it is the child support payment, which is, I think, €50 for under-12s and €62 for over-12s. That is in addition to your child benefit, but that is per week.
Anne Rabbitte (Fianna Fail)
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That is only for a person who is in receipt of the widow's or widower's pension.
John Paul O'Shea (Cork North-West, Fine Gael)
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Or a number of other-----
John Paul O'Shea (Cork North-West, Fine Gael)
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Yes, but I suppose-----
Sarah O'Reilly (Aontú)
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More information about that needs to be-----
John Paul O'Shea (Cork North-West, Fine Gael)
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To be fair to the witnesses-----
John Paul O'Shea (Cork North-West, Fine Gael)
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-----there is an awful lot of detail involved in the social protection system. It is good to have the research from them but it is also good to see the continued research.
I thank you for your time and your interest in this matter because it is something on which this committee is very anxious to follow up over the coming years to try to make the system more public-friendly, child-friendly and family-friendly. Thank you to Dr. Doorley, Mr. MaÌtre and Ms Sándorová for their contributions today and for providing the various briefing materials in advance for the committee's deliberations. I thank you all. I know you have another commitment at 12 o'clock so I thank you for coming in and taking up our invitation at such short notice last week.