Impact of poverty ‘costs Ireland €4.5bn annually’, report suggests

Dealing with the consequences of poverty costs the State an estimated €4.5 billion every year, according to a new report.

The Hidden Cost of Poverty document, commissioned by the Society of Saint Vincent de Paul (SVP), examined the financial consequences of poverty under six categories: healthcare; children and families; education and training; housing; gardaí, criminal justice and emergency services; and certain welfare supports.

The report estimated that spending to deal with poor health outcomes associated with poverty was estimated to be more than €1.2 billion, while €917.4 million was spent in the justice system dealing with the association of social and economic disadvantage and crime.

The report uses an annual income of €13,723 as being the poverty line for a single person, €22,780 for a couple with one child and €18,252 for a lone parent with one child.

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The poverty lines increase with each subsequent child: €27,309 being the poverty line for a couple with two children; and €22,780 for a lone parent with two children.

A “significant proportion” of State spending is allocated to support people in poverty unable to afford basics through social assistance (€592.7 million) and housing support (€912.5 million), the research found.

In education, €549.7 million is spent every year dealing with the legacy effects of early experiences of child poverty and on measures to prevent children now experiencing the longer- term effects of educational disadvantage.

While most of those living in poverty are of working age, the report says there are a large number of children living below the poverty line.

About 30 per cent of all those in poverty are aged 17 and under, averaging about 225,000 children each year. About 55,000 people aged 65 and over live on incomes below the poverty line, representing approximately 8 per cent of those living in poverty.

The costs presented throughout the report are based on available data from the Central Statistics Office, various government departments and agencies, answers to parliamentary questions and the published results of related studies both nationally and internationally.

Dr Micheál Collins, author of the report and an assistant professor at University College Dublin, said the purpose of the research is to highlight the additional public service costs society carries as a result of poverty.

What can be done?

“Year after year, poverty imposes substantial costs on all of Irish society. While these fall heaviest on those living on the lowest incomes in our society, this report highlights that there are substantial costs borne by all,” said Dr Collins.

“Consequently, there are benefits for all associated with a coherent national strategy to address and successfully reduce poverty and its consequences.”

Speaking at the publication of the report on Tuesday, SVP national president Kieran Stafford said living in poverty was a reality for some 700,000 people living in the State.

“The individual costs of living on an inadequate income are wide ranging. And the experience of ongoing disadvantage takes a physical, psychological and social toll on the lives of too many children and adults and the effects can be long-lasting,” he said.

He said in addition to the strong moral arguments for addressing poverty, the report provides “important evidence on the wider societal benefits” of tackling the problem.