Almost a quarter of households in arrears on bills

 

ALMOST A quarter of all households were in arrears on at least one bill or loan last year and 60 per cent said they had difficulty making ends meet, according to the annual survey on income and living standards by the Central Statistics Office.

Gross and disposable household incomes fell in 2009 as higher taxes and growing unemployment took their toll, the survey shows. However, poverty levels remained stable as social welfare payments increased during the period.

Children and lone parent households are the groups most vulnerable to poverty, according to the report, published yesterday.

The gross household income last year was €56,522, down 6.7 per cent; disposable income was almost €46,000, down 6.3 per cent.

Some 14.1 per cent of the population were at risk of poverty last year, compared to 14.4 per cent in 2008. The decline is not considered statistically significant.

The “at risk of poverty” rate for children was also unchanged, at 18.6 per cent, as was the worst affected group, lone-parent households, where 35.5 per cent were at risk of poverty.

The survey shows households are increasingly dependent on State payments.

Some 27 per cent of household income came from social transfers, such as unemployment benefit, disability benefit or children’s allowance, up from 22 per cent in 2008.

Not surprisingly, State payments loom larger in importance in poorer families. They account for 91 per cent of income in the lowest-earning 10 per cent of the population. However, even in the highest earning 10 per cent, they account for almost 10 per cent of income.

Older people also rely heavily on State payments. The poverty rate among over-65s was under 10 per cent, but when social transfers are excluded, this figure rises to 88 per cent.

Poverty is lowest among older people living alone (less than 10 per cent).

By region, it is highest in the Midlands (23.5 per cent) and lowest in Dublin (8.3 per cent). Rural poverty rates stood at 17.8 per cent, compared to 11.8 per cent in urban areas.

The richest 10 per cent saw almost 30 per cent of gross income go on tax and social insurance contributions, while the poorest 10 per cent contributed 1 per cent of their income in this way.

Just over 24 per cent of households were in arrears with mortgage payments, utility bills or other loans or bills; this compares to just 10 per cent in 2008. Among those at risk at poverty, the proportion of people in arrears rises to one-third, up from 20 per cent in 2008.

One in 10 households was behind on gas or electricity bills, and one in 20 was in arrears on the rent or mortgage. Only half of those surveyed said they would be able to meet an unexpected expense of about €1,000 without borrowing.

The CSO also measures deprivation, or the inability of people to afford basic goods.

The survey shows the deprivation rate rose to 17.3 per cent last year, up from 13.8 per cent in 2008. The two items people reported being most deprived of were the replacement of worn-out furniture and being able to afford to go out in the preceding fortnight.

Compared to other members of the EU, Ireland’s poverty rate is slightly below average. In 2008, the “at risk of poverty” rate in the EU was 16.5 per cent; the equivalent rate for Ireland was 15.5 per cent.

This ranked us 13th in the 27-member EU. Latvia recorded the highest rate, while the Czech Republic had the lowest.

The at risk of poverty rate is based on income and household composition and is calculated as the percentage of people with an income less than 60 per cent of the national median income.