Written answers

Tuesday, 16 June 2015

Department of Social Protection

Social Welfare Schemes

Photo of Joanna TuffyJoanna Tuffy (Dublin Mid West, Labour)
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194. To ask the Minister for Social Protection if she will provide an update on the impact of the various social protection measures on poverty and income inequality (details supplied), from 2008 to date in 2015; and if she will make a statement on the matter. [23383/15]

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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The impact of social transfers (that is all welfare payments excluding pensions) on poverty and income inequality for the period 2008-2013 is set out in the accompanying tables, using official EU indicators and data from Eurostat.

In 2013, social transfers reduced the at-risk-of-poverty rate from 38.5% to 14.1%; thereby lifting almost a quarter of the population out of income poverty. This is equivalent to a poverty reduction effect of 63%. Ireland is the best performing EU member state in reducing poverty through social transfers, higher even than the Scandinavian countries such as Denmark, Finland and Sweden.

Furthermore, Irish social transfers are almost twice as effective in preventing poverty as the EU average and up to three and a half times more effective than the member states worst affected by the economic crisis, such as Greece, Italy, Portugal and Spain.

With regard to income inequality, in 2013, Irish social transfers reduced the Gini coefficient from 46 to 30, an inequality reduction effect of 35%. Ireland is the best performing EU member state, again ahead of the Scandinavian countries.

Social transfers in Ireland reduce income inequality by over twice the EU average and up to five times more than in the crisis countries of Italy, Greece and Cyprus.

Looking at the trends between 2008 and 2013, Ireland has improved the poverty reduction effect of social transfers from 54% to 63%. A similar improvement can be seen in regard to income inequality: 28% to 35%.

These data highlight the crucial role that Ireland’s social protection system has played in cushioning the effect of unemployment on household incomes and acting as an automatic stabiliser during the economic and fiscal crisis. It also belies the assertion that fiscal consolidation has impacted on the most vulnerable in society. Central to this significant social policy outcome is the Government’s commitment to maintain the value of the core welfare rates, while at the same time providing additional welfare funding to cater for an increase of 50% in the number of welfare recipients.

Annex

Comparative EU data for 2013ARP before STs

(ex-pensions)
ARP after STsPRESTRank
EU (28 countries)25.9%16.6%35.9%
Ireland38.5%14.1%63.4%1
Denmark28.1%12.3%56.2%2
Finland26.4%11.8%55.3%3
Netherlands20.8%10.4%50.0%4
Czech Republic16.6%8.6%48.2%5
United Kingdom30.1%15.9%47.2%6
Luxembourg29.4%15.9%45.9%7
Hungary26.3%14.3%45.6%8
Sweden27.1%14.8%45.4%9
Austria25.9%14.4%44.4%10
France24.2%13.7%43.4%11
Slovenia25.3%14.5%42.7%12
Belgium26.3%15.1%42.6%13
Cyprus24.3%15.3%37.0%14
Slovakia20.1%12.8%36.3%15
Croatia29.7%19.5%34.3%16
Germany24.4%16.1%34.0%17
Malta23.3%15.7%32.6%18
Lithuania30.3%20.6%32.0%19
Spain30.0%20.4%32.0%20
Estonia25.4%18.6%26.8%21
Portugal25.5%18.7%26.7%22
Latvia26.0%19.4%25.4%23
Poland23.0%17.3%24.8%24
Italy24.6%19.1%22.4%25
Bulgaria26.7%21.0%21.3%26
Romania27.8%22.4%19.4%27
Greece28.0%23.1%17.5%28

Source: Eurostat, EU-Survey on Income and Living Conditions, 2013. Extracted: 13.02.2015

Comparative EU data for 2013Gini before STs

(ex-pensions)
Gini after STsIncome inequality reduction effectRank
EU (28 countries)36.130.515.5%
Ireland46.330.035.2%1
Denmark38.927.529.3%2
Finland33.625.424.4%3
Sweden32.924.924.3%4
United Kingdom39.830.224.1%5
Belgium34.025.923.8%6
Slovenia30.624.420.3%7
Luxembourg38.130.420.2%8
Netherlands31.425.120.1%9
Hungary34.828.019.5%10
Austria33.327.018.9%11
Germany36.229.718.0%12
Croatia37.330.917.2%13
France35.830.115.9%14
Czech Republic28.824.614.6%15
Slovakia28.324.214.5%16
Malta32.627.914.4%17
Lithuania40.234.613.9%18
Spain38.833.713.1%19
Portugal38.434.210.9%20
Poland33.930.79.4%21
Estonia36.332.99.4%22
Cyprus35.532.48.7%23
Romania37.034.08.1%24
Latvia38.335.28.1%25
Bulgaria38.135.47.1%26
Greece37.034.47.0%27
Italy34.832.56.6%28

Source: Eurostat, EU-Survey on Income and Living Conditions, 2013. Extracted: 12.06.2015

Poverty reduction effect of social transfers (PREST), 2008 to 2013*

200820092010201120122013
EU Average34.4%35.4%36.9%36.4%34.6%35.9%
IE54.4%60.0%61.9%61.6%60.1%63.4%

Source: Eurostat, EU-Survey on Income and Living Conditions, 2008-2013. Extracted: 12.06.2015

Income inequality reduction effect of social transfers, 2008 to 2013*

Gini coefficient200820092010201120122013
EU Average14.2%15.0%15.8%15.6%15.3%15.5%
IE28.5%33.6%34.4%35.8%35.0%35.2%

Source: Eurostat, EU-Survey on Income and Living Conditions, 2008-2013. Extracted: 12.06.2015

* Figures for 2008 and 2009 refer to the EU-27, while those for 2010 to 2013 relate to the EU-28.

Definitions

At-risk-of-poverty: Persons are regarded as being at-risk-of-poverty if their equivalised income is below 60% of the median income.

Gini coefficient: is the relationship between cumulative shares of the population arranged according to the level of income and the cumulative share of total income received by them. If there was perfect equality (i.e. each person receives the same income) the Gini coefficient would be 0%. A Gini coefficient of 100% would indicate there was total inequality and the entire national income was in the hands of one person.

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