Household welfare income up by 50% since 2004

Social Protection Minister Joan Burton - launched report

The share of household income from welfare payments has risen by 50% since 2004, according to a new report from the ESRI, which emphasises the importance of social welfare in reducing poverty.

The increase - equivalent to about €100 per family - is largely down to unemployment and salary cuts.

The research report, entitled Social Transfers and Poverty Alleviation in Ireland examines the impact of social transfers – including both State and occupational pensions, other social welfare payments and child benefit – in alleviating income poverty in Ireland.

The report finds that the share of total household income from social transfers increased very rapidly after the start of the recession – from 20% in 2004 to 30% by 2011.

This was largely due to the rise in unemployment, leading to more people receiving unemployment-related payments, and to the fall in market incomes (from work, interest/ dividends and rents).

In 2011, 87% of households received some social transfer income, up slightly from 85% in 2004.

“The report highlights the crucial role of the welfare system in alleviating poverty, ensuring those who need it most are protected and helping individuals and their families to overcome the severe difficulties caused by the crisis," Minister for Social Protection Joan Burton said.

"The figures demonstrate that the system is extraordinarily effective in terms of income redistribution and poverty alleviation.

"The challenge now is to ensure those who are vulnerable – children and the long-term unemployed, in particular – are not left behind as the economic recovery takes hold."

Herwig Immervoll of the OECD says maintaining welfare payments will play a key role in preventing people being left behind in the recovery.

"The poverty reduction capacity of the social protection system has been large before the crisis and has remained intact - that's very important because during the recovery, there are people left behind" he said.

"Maintaining the incomes when times are toughest for them is very important; not only now, but also for the future" he added.

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