THERE HAS BEEN an increase in the rich-poor gap in Ireland as a result of taxation and welfare measures adopted in Budget 2022, according to a new analysis from the think tank Social Justice Ireland.
Social Justice Ireland said its latest briefing paper shows that government policy is “not yet focused on achieving the objectives of reducing poverty and promoting social inclusion”.
Economic and social analyst Colette Bennett said the rich-poor gap increased by €2.96 per week, or €154 per year, as a result of tax and welfare measures in the 2022 Budget.
“The overall rich-poor gap stood at €975 per week (€50,800 per annum) in 2022 and it has grown by a total of €30 per week (€1,550 per annum) over the period 2014-2022,” Bennett said.
“Our analysis also monitored what we call the “middle-poor gap”, that is the difference in the distributional impact of recent Budgets on households dependent on jobseekers payments (poor) and PAYE workers on €40,000 per year (middle). Overall, the middle-poor gap has grown by a total of €21 per week (€1,070 per annum) over the period 2014-2022.”
She said the cumulative middle-poor gap stood at €572 per week (€29,800 per annum) in 2022.
This gap has decreased by 16% following the budgetary policies of the current government, which Bennett said can be explained by the full payment of the Christmas Bonus to jobseekers in 2020/21 and no other changes to income taxation or welfare payments for these individuals.
Among households with jobs, the gains from the Budget range from 39 cent per week (for low income couples on €30,000) to €16.11 per week for couples with incomes over €80,000. Earners on the living wage gain more due to the increase in the level of that payment.
Among households dependent on welfare, the gains have ranged from €5 per week for single unemployed individuals to €24.65 per week for unemployed couples with two children over 12 years of age.
Suzanna Rogers, research and policy analyst, said the analysis highlights how low income families, those with incomes below the standard rate income tax threshold “gain least from the budget measures over the past two years”.
The households analysed are spread across all areas of society and include those with a job, families with children, those unemployed and pensioner households. This is a snapshot of Irish society. Within those households that have income from a job, we include workers on the minimum wage, on the living wage, workers on average earnings and earners with incomes ranging from €30,000 to €200,000.
CEO of Social Justice Ireland Dr Seán Healy said they are concerned that recent budgets have shifted away from a prioritisation of low income welfare dependent families “and regrettably expect that much of this recent progress will be reversed”.
“The fundamental test for every government is whether, when it leaves office, those with the least in our society are in a better position than when it entered office,” he said.
“The choices that Government has made in recent Budgets will see the number of people in poverty grow.”
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