Budget benefits poor, agency claims

from The Irish Times

Families living in poverty benefited financially in this year's budget, according to a leading poverty group.

Analysing Budget 2007, Combat Poverty Agency found it delivered gains of up to three times the average for low-income groups.

Director Helen Johnston said the main driver for the rise was increases in social welfare payments — of €20 per week — and in child income support payments, including child dependant allowance, family income support, and clothing and footwear allowance.

She said the positive state of the public finances enabled an increased in the tax and welfare package of €2,748 million, up €362 million on the previous year.

However, with inflation raising annually households across Ireland are still struggling to meet basic needs. Around 7 per cent of the population are currently living in poverty, surviving on incomes of just €10,000 a year, while a further 18 per cent of low-income families live in constant risk of being in deprivation.

"Our key point is that the budget was favourable towards low income households," said Ms Johnston. "The average gain for all households was a 1.5 per cent — around €9.40 a week — but for lower income families that increase was 4-5 per cent.

"But one factor we haven't analysed is the increase in welfare payments against the increases in the cost of living. "Rises in energy, fuel and food prices can all take away from the benefit increases. "People living on the lowest levels of income can't afford essential necessities like being able to put food on the table every day, shoes, overcoats."

Ms Johnston said households need to be protected against fuel increases by being supported to properly insulate their homes to conserve energy. More also needs to be done to tackle poverty by focusing on health, education, childcare service and employment opportunities, she said. Combat Poverty is a state advisory agency developing and promoting evidence-based proposals and measures to combat poverty in Ireland. It said tax and welfare policy has a key role to play in redistributing resources and reducing relative income poverty.

"Budget 2007 has a positive effect on relative income poverty, especially at the lowest threshold," added Ms Johnston. "The engine of poverty reduction is the big increases in welfare rates, augmented by a targeted allocation on child income support.