Ruth Coppinger (Dublin West, Socialist Party)
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42. To ask the Tánaiste and Minister for Social Protection the measures she has taken to reduce economic inequality for Social Protection recipients; and if she will make a statement on the matter. [1249/16]

Joan Burton (Dublin West, Labour)
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The most recent Eurostat data highlights 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 disproportionately impacted on the most vulnerable in society. Central to this significant social policy outcome has been 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 increases in the number of welfare recipients including, in particular, the ongoing rise in the number of pensioners.

The impact of social transfers (that is all welfare payments excluding pensions) on poverty and income inequality for the period 2008-2014 is set out in the tables appended to this reply using official EU indicators and data from Eurostat.

In 2014, social transfers reduced the at-risk-of-poverty rate from 37.2% to 15.3%; thereby lifting over a fifth of the population out of income poverty. This is equivalent to a poverty reduction effect of 58.9%. 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 four times more effective than the member states worst affected by the economic crisis.

With regard to income inequality, in 2014, Irish social transfers reduced the Gini coefficient from 45.6 to 30.7, an inequality reduction effect of 32.7% and the highest in the EU.

The data in the tables shows the impact of social transfers and income inequality excluding pensions. Equivalent Eurostat data including the impact of pensions (social security and occupational) show equally strong impacts for Ireland and can be viewed at

The key achievement of this Government has been to stabilise the nation’s finances, to increase employment and to achieve economic growth. This endeavour is well underway and we are already reaping the benefits of these policies, including, the ability to invest in the improvements I have announced over the last two years in welfare supports.

The recent Budget was designed to improve the lives and living standards of every person and every family in the country. The 2016 Budget package I introduced had four key aims, as follows:

- To increase supports for pensioners aged 66 and over;

- To strengthen supports for families with children;

- To increase the momentum to date in helping jobseekers back to work; and

- To provide targeted assistance for vulnerable groups.

In Budget 2015, I reintroduced a Christmas Bonus payable at 25% of the weekly rate. The Bonus had been abolished by the previous Government in 2009. In Budget 2016, I was pleased to be in a position to provide a 75% Christmas Bonus payment for all welfare recipients.

Weekly personal rates of payment for all those aged 66 and over increase by €3 per week from January with proportionate increases on qualified adult rates. In addition, all of those eligible for the Fuel Allowance, including jobseekers and lone parents, gain from the increase in January of €2.50 per week, from €20 to €22.50 per week over the fuel season.

Funding for the Free Travel scheme, which benefits a large number of persons with disabilities, carers and pensioners, is being increased by €3m, from €77m to €80m, to meet increased numbers eligible for the scheme and therefore fully protect entitlements under the scheme.

Families with children will benefit from the €5 increase in the monthly rate of Child Benefit while lower income working families will also benefit from increases in the Family Income Supplement thresholds. €3 million extra is also being provided for the School Means scheme.

The Respite Care Grant, now renamed the Carer’s Support Grant to better reflect the usage of the grant, is being increased by €325, from €1,375 to €1,700 per annum. Furthermore, payment of Carer’s Allowance will be extended by 6 weeks, from 6 weeks to 12 weeks, after the death of the care recipient.

These improvements show that we are on the right path. Our goal is an Ireland visibly better for all including those less well off. The last Budget was our fifth Budget. The first three were immensely difficult but they were necessary to restore our public finances to health, help sustain and create employment, and chart a course towards strong economic growth. And at all times, we sought to protect the most vulnerable in society to the greatest extent possible.

Last year – much quicker than most economists had expected in 2011 – we were able to introduce a Budget that began the process of raising living standards and reinvesting in our communities. We have kick-started the social recovery. We are continuing that process this year.

Table 1: EU at risk of poverty indicators before and after social transfers, 2014.

Source: Eurostat, EU-Survey on Income and Living Conditions, 2014. Extracted: 07.01.2016

Table 2: EU income inequality before and after social transfers, 2014.

Source: Eurostat, EU-Survey on Income and Living Conditions, 2014. Extracted: 07.01.2016

Notes:

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

2. PREST: is the poverty reduction effect of social transfers.

3. 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.