Poverty among the elderly and people living with disabilities is expected to rise as a consequence of Budget 2025, after the Government opted to reduce temporary measures such as household energy credits and freeze other allowances, the Economic and Social Research Institute (ESRI) has indicated.
The child poverty rate, meanwhile, will likely remain unchanged but still at an elevated level despite the child benefit lump sums announced in Tuesday’s budget.
The State-funded research institute’s post-budget briefing in Dublin on Friday heard Tuesday’s announcement may have been a “missed opportunity” to lift thousands of children in the Republic out of poverty.
While the impact of the budget is expected to be “broadly progressive”, distributing more to those at the lower-end of the socio-economic scale, ESRI associate research professor Dr Claire Keane said the institute anticipates poverty to rise for people with disabilities and the elderly, two groups already among those most at risk of deprivation.
Budget 2025 main points: Energy credits, bonus welfare payments, higher minimum wage and tax changes
Budget 2025 calculator: How this year’s budget will affect your income
Does Sinn Féin’s two-candidate general election strategy lack ambition?
Budget likely to push more elderly and people with disabilities into poverty - ESRI
The Coalition opted to cut the household energy credit to €250 in Budget 2025, down from €450 last year while other allowances were left unchanged.
“We see that the reduction in energy credits and [freezing] like the fuel allowance and living alone allowance are affecting particularly those of retirement age and or people with disabilities, who often are part of the same group,” Dr Keane said. “We anticipate the poverty rates of these two groups to rise as a result of Budget 2025.”
Dr Keane said it was important to note that poverty rates would have increased “really, really substantially” without those interventions in the budget.
However, she said the Government is going to have to be careful as it begins to wind down certain temporary measures such as the energy credits scheme because of the uneven impact it will have on the incomes of certain at-risk cohorts while there is still a build-up of elevated consumer prices in the economy.
In a wider, historical context, poverty rates among the elderly have fallen significantly in recent decades, largely due to targeted action from policymakers and increases in the State pension.
Child poverty rates, meanwhile, remain elevated, the conference heard but are expected to remain unchanged at around 15 per cent following Budget 2025.
Alan Barrett, ESRI director, said the budget may have been a “missed opportunity” to lift thousands of children out of poverty. While measures including the double payment of child benefit in November and the €280 newborn baby grant will help families with children, the measures are not targeted specifically at those most in-need of intervention.
“I certainly think a targeted child related measure would have been much better, would have helped to decrease child poverty and hopefully have a knock-on effect on deprivation,” Dr Keane said. “The anticipation is that the double child benefit payment will be a once-off, and that won’t happen again or will be reduced.”
She said it was a “pity” to not see a more permanent policy measure aimed at reducing the number of children in poverty announced in the budget.
ESRI research published last month indicated that about 230,000 children are going without basic items and activities for a comfortable life in the State, up 14 per cent since 2022.
- Sign up for the Business Today newsletter and get the latest business news and commentary in your inbox every weekday morning
- Opt in to Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Join The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
