THE BUDGET WILL do little to lift children out of poverty, the Economic and Social Research Institute (ESRI) has said.

In their analysis of the government’s spending plans, researchers found that increases in the Child Support Payment and Working Family Payment will likely not improve poverty rates.

The number of children in households falling below the poverty line – those with less than 60% of median real disposable income – rose to 200,000 in 2024.

It’s an increase of almost 30,000 children on 2021, the last year for which there is data.

While the ESRI said some measures in Budget 2027 are welcome – such as an increase to universal childcare subsidies for children up to senior infants – they will hold child poverty relatively constant, compared to a wage or price-indexed baseline.

The ESRI maintains that the best way to tackle child poverty is to introduce a second tier of Child Benefit.

In September, Taoiseach Micheál Martin said he was “working on that”.

He explained that the government wants to ensure that those on existing payments that are beneficial to children and vulnerable families don’t lose out if they get the new payment.

The ESRI also said that overall, the lowest-income households will make some gains from the budget, while better-off households will see little to no change in their financial health. 

Not targeted enough?

Overall, the last seven budgets have left households slightly worse off than if government supports and tax measures had risen in line with wages.

The ESRI found that households have seen an average of a 0.3% reduction in their disposable income since before the pandemic.

“This is as a result of direct tax and welfare measures and childcare supports,” it said in a press release.

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Lower-income households have seen some gains. Since 2020, the overall poverty rate was reduced by around two percentage points compared with what it would have been if budgets had simply kept pace with wages, the ESRI says.

In Tuesday’s budget, the government also cut the carbon tax on home heating oil and gas, and shelved planned increases for the rest of its term. 

The ESRI said the fact the cut is not targeted at those most vulnerable makes it an expensive measure that won’t encourage people to decarbonise.

Meanwhile, the new €500 Cost of Disability payment, which comes a year after the government discontinued the €400 Disability Support Grant, could support as many as 238,000 people with disabilities.

However, only those already in receipt of long-term disability payments can avail of it.

It also falls well below the actual extra costs disabled people are likely to incur, according to Claire Keane, an associate research professor at the ESRI.