One-parent families are better off working part-time than full-time for the minimum wage of €9.25 per hour, while two-parent families lose income if both parents work full-time for minimum wage, new research shows.
While households dependent on social welfare have seen an improvement in their income adequacy, welfare still does not provide a minimum essential income for the majority of households dependent on it, the research found.
The 2017 Minimum Essential Standard of Living (MESL) report, from the Vincentian Partnership for Social Justice, looks at the adequacy of welfare and minimum-wage incomes for 12 different household types, including families with one to four children, single adults and couples under 66, and single and couple pensioners, in both urban and rural locations.
It calculates income needs, as opposed to wants, for such basics as healthy food, clothing and heating.
Urban couple
It finds, for instance, an urban couple with an infant will need a basic net income of €420 per week, including €89.73 for food, €22.66 for clothing and €7.17 for bin charges.
An urban single adult living alone will need €237.80 per week, including €53.80 for food, €9.45 for clothing and €4.15 for bins, while an urban single parent with one child in primary school and one in secondary school will need €433.47 per week, including €114.48 for food, €23.48 for clothing and €7.17 for bin charges.
Rural households, says the study, have higher costs for transport and heating. Couples with an infant need €521.17 per week, a single adult needs €293.60 and a lone parent with two children – one in primary and one in secondary school – needs €497.57 per week.
“In the last year there have been decreases in certain categories of expenditure, such as food, clothing and electricity. However, increases in other areas have offset at least some of these,” including home-heating and private transport, says the study.
Childcare costs
Private rented housing and childcare costs have increased, by 8.6 per cent and 1.5 per cent respectively, in the year to March. The MESL has “increased significantly” for households paying for these.
Two-parent households with young children are best protected against poverty by social welfare, while households dependent on welfare with adolescents are least protected.
A child costs €49.19 per week at pre-school stage, climbing to €129.27 for a secondary school-age child. However, if full-time childcare for up to primary school age is included, “infancy is the most expensive stage at €301.91 per week.”
If both parents work full-time for minimum wage, they are worse off than if one parent does not work, due to the cost of childcare and the loss of most of their Family Income Supplement (FIS).
Similarly, a lone-parent household, working part-time for the minimum wage, has an adequate income as they continue to qualify for FIS. However, if they move to full-time work, they lose FIS, have childcare costs and are liable for USC and PAYE, and become worse off.
The full report can be accessed at budgeting.ie/publications/2017-mesl-update-report/
