Róisín Shortall (Dublin North West, Independent)
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170. To ask the Minister for Social Protection to set out the basis of the claim by her Department, in its publication on the social impact assessment of the main welfare and tax measures for 2015, that the most significant improvements between budget 2014 and budget 2015 were for the poorest and richest households, in view of the contradictory evidence published in its report. [5543/15]

Joan Burton (Dublin West, Labour)
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The Department recently published the social impact assessment of the main welfare and tax measures for 2015, including the new water charges package. Social impact assessment is an evidence-based methodology which estimates the likely effects of welfare and tax policies on households across income levels and social groups.

The assessment was prepared by the Department, which is responsible for the welfare component of the Budget. It is based on the tax/welfare micro simulation model SWITCH developed by the Economic and Social Research Institute. Responsibility for the analysis rests solely with the Department.

One aspect of the assessment examines the distributive impact of the composite budgetary package for 2015 compared with the 2014 measures. Overall, there is a marked difference in the overall distributive impact: an average gain of 0.7 per cent in 2015 compared to an average loss of 0.8 per cent in 2014.

The contrast in distributive impact between 2015 and 2014 is greatest at the top and bottom of the income distribution, on the basis that these two quintiles experienced the greatest losses in 2014, which were then transformed into gains in 2015. Thus, a loss of 1.1 per cent for the bottom quintile in 2014 is replaced by a gain of 0.3 per cent in 2015 (a difference of 1.4 percentage points). Similarly, the top quintile goes from a loss of 1.1 per cent in 2014 to a gain of 1 percent in 2015 (a difference of 2.1 percentage points). For middle income groups, the scale of the transformation is not as dramatic, given the smaller losses experienced in 2014. The report acknowledges that over the two years combined, many households will still show an overall loss in income.

It should be noted that certain items are not included in the assessment, for instance, additional expenditure on labour market initiatives (such as the back to work family dividend and the expansion of JobsPlus). In addition, the assessment also does not include non-welfare expenditure measures for 2015, such as healthcare, education, social housing, and the new housing assistance payments, which will remove the barrier to full-time work for long-term recipients of rent supplement. Work is ongoing to quantify these impacts as part of the ESRI SWITCH research programme.