Poverty levels in Ireland are about 25 per cent lower than previously estimated, according to a new study from the Economic and Social Research Institute.
The ESRI report shows that when non-cash benefits, such as fuel allowances and medical cards, are taken into account, the percentage of impoverished households is one-quarter less than calculated in the past.
The report - commissioned by the Minister for Social, Community and Family Affairs, Mr Ahern, and due to be published later this month - reveals that the biggest poverty reductions apply to the ill and disabled and to older people.
Previous poverty studies have looked only at the cash incomes of poor families. This report - "The Impact of Non-Cash Benefits on Poverty in Ireland" - takes into account free schemes, including free electricity and gas, free TV licences, free travel and the medical card.
The report, a draft which has been seen by The Irish Times, states that when all the benefits are taken into account, there is a reduction of between one-fifth and one-quarter in the number of households below relative income poverty levels.
For the ill or disabled, the poverty rate drops from almost 50 per cent to 30 per cent. The proportion of households headed by someone aged over 65 which are below the poverty line falls from 13 per cent to 7 per cent when non-cash benefits other than the medical card are taken into account.
The reduction is not as significant for large families with four or more children. Adding in non-cash benefits, including the medical card, poverty rates in this category are reduced by 4 per cent.
The household type most affected is the single adult house, where the poverty rate falls from 24 per cent to 9 per cent.
The study, undertaken by Mr Brian Nolan and Ms Helen Russell, shows that the poorest 30 per cent of households receive more than half of the State's non-cash pay-outs, whereas the richest 30 per cent receive only 5 per cent of non-cash benefits.
According to the report's authors, previous analysis measured poverty only on cash income and failed to take account of the range of free or subsidised services which affect living standards.
Focusing on cash income and not taking non-cash benefits into account has led to an under-estimation of the resources available to low-income households and an over-estimation of the extent of their poverty, the authors state.
The study concludes the failure to take seven types of benefits into account has seriously distorted attempts to measure the extent of poverty, those affected by it and the effectiveness of the social protection system.