Séamus Brennan (Dublin South, Fianna Fail)

The most recent statistics on poverty levels in Ireland are derived from the new 2003 EU Survey on Income and Living Conditions, EU-SILC, and were released earlier this year by the Central Statistics Office. This survey replaces the Living in Ireland Survey, which was conducted by the Economic and Social Research Institute until 2001 and which provided data on consistent and relative poverty up to that year.

The nature of poverty and its effects are multidimensional and no one measure can give a complete picture regarding deprivation, poverty and social inclusion.

The relative "at risk of poverty" indicator measures income alone. The EU-SILC results reported that 22.7% of persons were at risk of poverty in 2003 based on the proportion of the population below an income threshold of 60% of median income. The 2003 figures represent a slight increase on the 2001 figure of 21.9%.

When countries experience rapid economic growth, however, as in Ireland in the 1990s, relative poverty measures on their own may not provide a clear measure of actual poverty. For example, using the "at risk of poverty" measure, relative income poverty in Ireland rose from 15.6% to 20.9% between 1994 and 2000. If we use the same measure and timeframe and increase the poverty line only by consumer prices, the "anchored poverty line approach", the level of poverty falls by 55.9%.

The main reason, therefore, for the increase in the "at risk of poverty" rate is the increase in incomes generally on which this rate is in part measured. For example, a recent EUROSTAT study calculated the monetary value of the 60% threshold in terms of purchasing power standards terms in 2003 for a household of two adults and two children. The value of the threshold for Ireland is above the EU average and is ranked eighth highest overall in the EU 25. Many households in Ireland with incomes below the 60% threshold may have a better standard of living than similar households classified as not at risk of poverty in other member states.

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Furthermore, not all those below the 60% of median income threshold are regarded as being in poverty, even in an Irish context, as that also depends on other factors such as the extent to which their income is below the threshold, the length of time they have been living on a low income, the degree to which their assets will have run down while on a low income and the other resources they have at their disposal. This indicator measures income alone and does not take account, for example, of the high level of home ownership and entitlement to household allowances such as electricity, fuel, television licence and telephone rental, which are particularly important in Ireland in the case of the elderly.

The "consistent poverty" measure is used in this country to identify those experiencing basic deprivation. This is calculated by identifying from among those at risk of poverty with incomes below the 60% threshold those who are also deprived of basic goods and services regarded as essential for living in Ireland today. The EU-SILC survey reported that 10.2% of households experienced consistent poverty in 2003, up from 5.2% in 2001 under the earlier LIIS survey. However, both the CSO and the ESRI have made it clear that methodological differences between the two surveys mean the figures for 2001 and 2003 are not comparable and that it is therefore not possible to conclude from them whether the level of consistent poverty changed.

There is certainly no reason to believe there has been a worsening in poverty levels in recent years. Between 2001 and 2005 spending on social welfare payments has increased from €7.8 billion to €12.2 billion. During the same period the lowest social welfare rates have increased by 40% while the consumer price index has increased by just over 13%. As a result of budget 2005, welfare payments have increased by three times the expected rate of inflation.

Nevertheless, what is not in question from the survey results are the groups identified as being most at risk. These include families with children, mainly lone parents, or larger families, those who are unemployed or with disabilities, and older people, especially those living alone. EU-SILC confirms the findings of earlier analyses in this regard and provides information on the most vulnerable groups in society towards whom policy should be focussed.

While the EU-SILC results highlighted the difficulties in measuring poverty, the Cabinet Committee on Social Inclusion, prior to the release of these results, had approved a review of the method of poverty measurement in Ireland. This work is now being progressed as part of the NAPS data strategy, co-ordinated by the office for social inclusion based in my Department.

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