Peter Burke (Longford-Westmeath, Fine Gael)
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The Minister for Social Protection has advised that the 2023 Survey on Income and Living Conditions (SILC), which is the official source of poverty statistics for Ireland, reported a reduction in consistent poverty, which is the national social target for poverty reduction, down from 4.9% in SILC 2022 to 3.6% in SILC 2023.

This is the lowest rate of consistent poverty recorded since the start of the SILC survey and puts Government on track to meeting the ambitious target set out in the Roadmap for Social Inclusion 2020-2025 of 2%.

The consistent poverty rate for employed people has also decreased from 2% in SILC 2022 to 1.5% in SILC 2023. This remains lower than the national rate, as well as for other cohorts, including unemployed people which was 9.4% in 2023.

Meanwhile the at-risk-of-poverty rate for those in employment was 5.8% in 2023, compared with an overall rate of 10.6%. Similarly, the at-risk-of-poverty rate for unemployed people was higher at 25.5%.

The survey confirms that Ireland continues to be one of the EU’s best performing countries for the poverty reduction effect of social transfers. The at-risk-of-poverty rate, which was 34.1% before social transfers, reduced to 10.6% after social transfers. This equated to a poverty reduction effect of 68.9% in 2023.

The significant role that social transfers play in reducing the at-risk-of-poverty rate in Ireland is part of a continuing trend, in 2022 the at-risk-of-poverty rate was 35.5% before social transfers reducing to 12.5% after transfers were included. While in 2021 the at-risk-of-poverty rate was 37.3% before social transfers and 11.8% after they were taken into account.

According to 2022 EU SILC data social transfers reduced income inequality in Ireland (as measured by the Gini Coefficient) from 38.5% (before social transfers) to 27.9% (after social transfers) which represents an income inequality reduction of 38%. This is the highest level of reducing income inequality in the EU-27 and was markedly higher than the EU-27 average of 17.9 per cent. .

The survey also confirms that Government’s cost of living measures were effective reducing the number of people at-risk-of-poverty.

Without these cost-of-living measures, the at-risk-of-poverty rate would have increased from 12.5% in SILC 2022 to 13% in SILC 2023 but instead fell to 10.6%. Meanwhile the at-risk-of-poverty rate for employed people decreased from 6.3% to 5.8% due to the cost-of-living measures.

It should also be remembered that the data relates to income from the calendar year 2022 and as such does not take account of any Budget 2023 measures paid in 2023 including the 2023 Cost of Living measures, or of course any Budget 2024 measures, which have been the largest social protection budgets in the history of the State.

Budget 2024 measures include a €54 increase to Working Family Payment thresholds for all family sizes, which follows an increase of €40 under Budget 2023.

As the Deputy will be aware, in 2021 the Low Pay Commission was asked to examine the Programme for Government commitment to progress to a living wage and provide recommendations on how best to achieve this commitment.

The Low Pay Commission’s recommendations were received and considered and in November 2022, Government agreed that a national living wage would be introduced and set at 60% of hourly median wages in line with the recommendations of the Low Pay Commission. The Government announced that it would be in place by 2026, at which point it would replace the National Minimum Wage.

The introduction of a living wage is an important step Government is taking towards eradicating low-wage employment for all workers.

The first step towards reaching a living wage was the 80 cent increase to the National Minimum Wage from 1 January 2023 to €11.30 per hour. This was followed with the significant 12.4% increase of €1.40 to the National Minimum Wage which came into force on 1 January 2024 and increased the minimum wage to €12.70 per hour.

The Low Pay Commission has estimated that the minimum wage in 2022 was 50.9% of the median hourly wage, increasing to 51.8% in 2023. The Commission estimates that the €1.40 increase in the 2024 National Minimum Wage will bring the minimum wage to 55.1% of median hourly wages.

The Low Pay Commission will continue to make annual recommendations on the appropriate rate of the National Minimum Wage, and the increases required so that by 2026 the minimum wage will reach the target of 60% of hourly median wages.

The progression to a living wage, and the significant budget measures I have outlined, show the Government’s commitment to protecting and improving the incomes of low-paid workers and those at risk of in-work-poverty.

Consistent Poverty: Persons are regarded as being in consistent poverty if their income is below 60 per cent of the median income (at-risk-of-poverty) and are deprived of at least 2 out of the 11 items on the basic deprivation list.

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