Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I thank the Deputies for submitting the subject of poverty as a Topical Issue debate. Tackling poverty continues to be a priority for the Government. It is important to point out the figures mentioned by the Deputies are from the survey on income and living conditions for 2014 and are neither new nor recent, although the report by Social Justice Ireland was published today. They relate to the number of people who are "at risk of poverty", meaning they are living in households whose income is below 60% of the median income for all households. Measured in this way, the "at risk of poverty" rate, as a percentage of the population, was 16.3% in 2014. Being "at risk of poverty" does not mean the same as living in poverty or living below the poverty line. Deputies might use the analogy of being at risk of losing one's seat being different from losing one's seat.

Relying on a relative measure during periods of rapid economic change can be misleading and may misrepresent the scale and nature of the challenges facing us. Put simply, when the median income is increasing, this can result in more people being "at risk of poverty", although their real income and living standards have not deteriorated. This was the case in 2014, when there was rise in real median disposable income of 3.5%, driven mainly by higher rates of employment and some pay increases. The Government's poverty targets have been set in terms of "consistent poverty", where a household is both "at risk of poverty" and lacking in two or more of 11 basic necessities. This official measure is designed to identify the population with the greatest needs both in terms of low income and lack of resources.

The "consistent poverty" rate as a percentage of population was 8% in 2014. This was a small decrease compared with 2013, the first such fall since the recession. The consistent poverty rate among children was 11.2% in 2014, down from 11.7% in the previous year. We expect those positive trends will have continued in 2015 but we do not yet have those statistics. The full impact of the strong economic recovery was not fully reflected in the 2014 figures. The unemployment rate was 11.3% in 2014 on average but has since fallen to 7.8%. As unemployment is strongly linked to poverty, we can expect further decreases in poverty as the figures for 2015 and 2016 become available.

The updated national action plan for social inclusion identifies a wide range of targeted actions and interventions to achieve the overall objective of reducing poverty. The social welfare system has proven crucial for poverty alleviation and reducing income inequalities. This policy is effective. Using data from EUROSTAT for 2014, Ireland’s performance in reducing poverty through the tax and transfer system, at 58.1%, was far in excess of the EU average of 34.1%. Ireland was the best-performing EU member state in reducing poverty through social transfers.

Income support is only one aspect of the policy response required to reduce poverty. The other components are inclusive labour markets and access to quality services. Growing employment and providing access to work is important for tackling poverty, particularly in welfare-dependent households, where often no person is working. The new Pathways to Work 2016 - 2020 strategy focuses on ensuring jobseekers can access good quality work, training and education opportunities. It continues to prioritise the activation of the long-term and young unemployed people, with supports provided through the network of Intreo offices. Welfare payments cannot and should not substitute for the salary or wages from a good well paid job.

Services are also important. Affordable health care, education and child care reduce poverty by reducing the cost of living and making work more attractive. More broadly, the updated national action plan for social inclusion reflects the multidimensional nature of poverty. The policy goals include a focus on early childhood development, youth exclusion, access to the labour market, including measures for people with disabilities, migrant integration, social housing and affordable energy.

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