Gap between rich and poor widens

Mon, Jan 31, 2011, 00:00

New research published today shows the gap between rich and poor has widened significantly since 1987.

The research, which was compiled by campaign group Social Justice Ireland, reveals that the top 10 per cent of Irish households receive almost a quarter of total disposable income, up 1.3 per cent since 1987.

In comparison, the bottom 10 per cent of households receive just 2.2 per cent of all disposable income, almost 11 times less than that of those in the richest households.

The research indicates that 620,000 people, equivalent to 14.1 per cent of the population, are at risk of poverty and says this figure would be much higher if it wasn't for social welfare payments.

The group claims that without the welfare system, Ireland's poverty rate in 2009 would have been 46.2 per cent.

The figures show that during the past decade, over 213,000 people have been lifted out of poverty. Furthermore, over the period from 2004 to 2008, when there were significant increases in social welfare payments, over 170,000 people escaped poverty.

Over 140,000 people are now long-term unemployed - the highest since the late 1980s. The risk of poverty in rural Ireland is 6 per cent higher than in urban Ireland, the study shows. In Dublin, about a tenth of the population in poverty. The figures rise to twice this rate in the midwest, southeast and the midlands.

Disposable income is the amount of money households have to spend after they have received employment/pension income, paid all their taxes and received any welfare entitlements.

The minimum disposable income required to avoid poverty in 2001, according to Social Justice Ireland, is €228.18 per week for a household with just one adult, equivalent to €11,585 on an annual basis. For a household containing two adults and two children the minimum disposable income needed is €515.46 per week, equivalent to €26,877 annually.

The lobby group says cuts announced in the last Budget will put additional pressure on households and likely lead to a rise in the poverty rate.

"Recent policies have begun to target the poorest in our society and their implementation will drive poverty up." the organisation said. "It cannot be acceptable that Ireland's poorest be condemned to even deeper poverty in the year ahead."

The group has outlined a number of steps that must be taken in order to reduce poverty rates. These include benchmarking of social welfare payments, refundable tax credits, a cost of disability payment, and a reversal of the cut in the minimum wage.