There are no magic solutions to the State’s poverty problems

The policy mix needed to deal with inequity is complex, not something easily fixed by changes to the welfare or tax systems

Those most likely to be consistently poor today are those who are unemployed, out of work due to sickness or disability, or lone parents. Photograph: iStock

Those most likely to be consistently poor today are those who are unemployed, out of work due to sickness or disability, or lone parents. Photograph: iStock

 

Up to the late 1960s the Republic had a fairly rudimentary welfare system. Those who were out of work were more likely to emigrate than to live here on welfare.

The 1970s began a significant expansion in the coverage of the welfare system with the introduction of new schemes such as invalidity pension, various schemes for lone parents and the introduction of supplementary welfare allowance.

Following the 1986 Report of the Commission on Social Welfare, there was an increased emphasis on raising payment rates towards the levels it had recommended. The period of expansion in the generosity of social welfare payments continued up to the onset of the 2008 recession. Even then the real value of core welfare payments was preserved over the crisis period.

The welfare system has played a crucial role in tackling poverty, as measured in terms of income and consumption

Today the State’s welfare payments are considerably more generous than their UK equivalents. Our contributory pension for under-80s is €248 a week, compared to £168.60 in the UK, equivalent to €188. Our jobseeker’s allowance is worth €203 a week, compared to around €81 a week at current exchange rates for the UK equivalent.

Ireland’s share of the population at risk of poverty is lower today than immediately before the financial crisis. The welfare system has played a crucial role in tackling poverty, as measured in terms of income and consumption.

However, we also need to employ a broader range of policy measures beyond social welfare if outstanding major challenges of disadvantage are to be overcome to achieve a more just society.

Labour market

People of working age who are outside the labour market are at highest risk of material poverty. Those most likely to be consistently poor today are those who are unemployed, out of work due to sickness or disability, or lone parents.

Promoting access to work has a key role to play in addressing and preventing poverty, alongside a decent welfare system for those unable to work.

Structural issues that militate against workforce participation such as poor levels of education, lack of access to affordable childcare and lack of disability-friendly workplaces are some of the issues that need to be tackled.

In the summer I wrote about inequality in life expectancy, which is strongly related to social class and limited education. A minority group with the most limited education and lowest social class has a life expectancy well below its peers, reflecting multiple problems in their lives. However, the policy mix needed to deal with this inequity is complex, not something that changes in the welfare or tax systems can easily fix.

While our anti-poverty strategies have had success in tackling problems around income and consumer living standards, until recently housing poverty did not receive the same policy attention, with consequences we see today.

The only long-term solution to the problem of housing poverty is to increase the supply of housing. At the moment a lot of policy measures effectively juggle the allocation of the existing limited supply. Some of these measures may even be counter-productive.

The problem with trying to increase housing supply is that there is no silver bullet, and the supply response in housing has always been very slow.

Financial distress

ESRI research has shown that quite a number of families with children, who would not be considered poor under the standard measures, were suffering significant financial distress after the crisis. Problem debt following the crisis is one of the causes. This reality requires a more complex policy menu than traditional interventions via tax or welfare.

Lone parents and their children are another key group in Irish society whose rates of poverty and deprivation have consistently been above average. Many of these households experience multiple disadvantages – low incomes, limited access to housing and greater difficulty in participating in society, in particular through employment.

There is no single magic solution, no one action that will succeed on its own

However, in the absence of affordable childcare many are locked into poverty. A key element in any solution lies in building a Scandinavian-type childcare system to allow them to participate in the workplace.

People with disabilities are only half as likely to have a job as others, although encouragingly Census 2016 showed a pick-up in their employment rates. The Government’s Comprehensive Employment Strategy for People with Disabilities sets out a range of actions designed to raise their employment and social inclusion.

The roots of poverty and inequality are complex, and require a multi-faceted policy intervention alongside a continuing commitment to a decent welfare system.

There is no single magic solution, no one action that will succeed on its own. All Government departments and agencies must contribute to finding solutions if we are to successfully rise to the challenge.

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