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Budget 2017 provided greatest gains to those on lowest incomes - ESRI

The family types with the largest gains are “non-earning lone parents and unemployed couples” according to the ESRI

Image: Shutterstock/Markus Mainka

BUDGET 2017 PROVIDED small gains to all income groups – but the greatest gains went to those on lowest incomes.

That’s according to data released today from Government-backed think-tank the ESRI.

The findings are based on the ESRI’s SWITCH model, which uses data from almost 8,000 households.

The Budget for 2017 was announced back in October, with some changes (like hikes to cigarette prices) kicking in immediately.

USC cuts announced by the Government will come into effect on 1 January, while the €5 boost to social welfare payments, including pensions, will come in in the spring.

The ESRI has measured the impact of Budget policy against what it calls a ‘distributionally neutral benchmark’ which would see incomes rise at the same rate for all income groups.

According to the think-tank:

The overall impact of Budget 2017 when compared with this neutral benchmark is a small rise in average income – no more than one quarter of 1%.
The greatest gains are focused on the lowest income groups. Average gains for the one-tenth of households with the lowest incomes are close to 1%, while for most income groups gains are closer to one quarter of 1%.

The majority of family units will also have small gains of between a quarter and half of 1%.

The family types with the largest gains from Budget 2017 are “non-earning lone parents and unemployed couples”, according to the ESRI, “for whom the budgetary changes are set to lead to a rise of approximately 2% of income”.

These family types represent just 3% of the population.

The ESRI’s Professor Tim Callan said:

“Higher welfare payments helped to ensure that incomes for those relying on social welfare benefits rose in line with general incomes.

Changes to Rent Supplement in advance of the budget, and the suspension of water charges mean that percentage gains in income were highest for the lowest income group.

The nearly 8,000 households analysed by the ESRI’s SWITCH model are from the CSO’s nationally representative Survey on Income and Living Conditions.

Read: ‘Rent pressure zones’ to be introduced with immediate effect in Dublin and Cork >

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