Richard Bruton (Dublin North Central, Fine Gael)
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Question 400: To ask the Minister for Social and Family Affairs the measures used for estimating relative poverty levels and consistent poverty measures; and the way in which each of these has moved over the past five years. [20396/06]

Séamus Brennan (Dublin South, Fianna Fail)
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Persons are regarded as being in relative income poverty, or 'at risk of poverty', if their income falls below 60 per cent of median income for the population as a whole. The 'consistent poverty' measure, used in Ireland to ascertain those who are most deprived and vulnerable, is calculated by identifying from among those in the 'at risk of poverty' category persons who are also deprived of basic goods and services regarded as essential for living in Ireland today.

The EU Survey on Income and Living Conditions (EU-SILC), which commenced in Ireland in 2003, is an annual survey that provides information on poverty, deprivation and social exclusion. Conducted by the Central Statistics Office (CSO), it is a voluntary survey of private households and information is collected continuously throughout the year, with up to 130 households surveyed each week to give a total sample of 5,000 to 6,000 households in each year. In 2004 a total of 14,272 individuals in 5,477 households were interviewed. The most recent results, announced in December 2005, record continuing positive trends in relation to poverty and social exclusion, and show the impact being made by the greatly increased resources now devoted to social welfare and other social services.

Results from the first two years of EU-SILC show that there has been a slight decrease in the percentage of persons 'at risk of poverty', from 19.7 per cent in 2003 to 19.4 per cent in 2004. These figures represent a halting of the upward trend of previous years and suggest that the numbers in the broad category of 'at risk of poverty' may have peaked and are now beginning to decline. This reflects the impact of real improvements in employment and social provision over the past number of years. The significant shifts from unemployment into employment have been an important factor in moving persons away from the risk of poverty. Real increases in social welfare levels with the basic social welfare rates being increased by 55.5 per cent between 2001 and 2006, while the Consumer Price Index increased by just 16.4 per cent in the same period, have also been a major factor.

It should be noted that those below the 60 per cent of median income threshold are categorised as being "at risk of poverty", but many may not be in poverty, as generally understood. That 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. Another important outcome highlighted by the survey is the significant reduction in the consistent poverty rate from 8.8 per cent in 2003 to 6.8 per cent in 2004.

In making comparisons across years, it is necessary to refer to EU-SILC's predecessor, the Living in Ireland Survey (LIIS), which was conducted by the Economic and Social Research Institute (ESRI) between 1994 and 2001. Figures for the period 1994 to 2004 are presented in Annex 1. While it is possible to determine the trend for 'at risk of poverty' rates between the two surveys, it is not possible to determine the trend in relation to the consistent poverty measure.

The CSO and the ESRI have stated that the apparent increase in consistent poverty between 2001 and 2003 was actually due to methodological differences between the EU-SILC and LIIS surveys, and that it was not possible to draw any conclusions on how consistent poverty actually changed in this period. It is considered unlikely, however, that the situation regarding consistent poverty would have deteriorated during these years, as there were no policy changes that would have brought about such a reversal of the earlier downward trend. On the contrary, significant improvements in social welfare rates and in services had been made in the intervening period and the EU-SILC results for 2004 would suggest that the downward trend that was apparent in the LIIS continues.

It is important to note that, regardless of statistical differences, a key message which emerges from both the LIIS and EU-SILC surveys is that certain groups of people are at a higher risk of poverty. Both surveys support one another in that both point to the consistently poor as being a subset of those below relative income thresholds, and identify the same groups as being at above-average risk of poverty and deprivation, i.e., families with children, especially lone parents and large families on low incomes, people with disabilities, the long term unemployed and the elderly, especially those living alone.

Each set of indicators yields important information for the purposes of combating poverty and social exclusion. The objective of a poverty measure must be that it clearly identifies those who are most deprived and vulnerable in society. The recent ESRI report "Reconfiguring the Measurement of Deprivation and Consistent Poverty in Ireland", which I launched last month, is an important contribution to the debate on how best to measure, monitor and report on poverty in Ireland. The issues raised in this report are being addressed in the preparation of the next National Action Plan against Poverty and Social Exclusion, being coordinated by the Office for Social Inclusion in my Department, which is due to be finalised by September. The findings on poverty levels in the LIIS and EU-SILC surveys and the ESRI report will be of great assistance in devising appropriate policies to address poverty and social inclusion. Further details regarding poverty measurement and related matters can be found on the website of the Office for Social Inclusion, which is based in my Department, at www.socialinclusion.ie.