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Impact of COVID-19 Income Supports on Poverty

One in four households consisting of one adult with children were in arrears on utility bills

CSO statistical publication, , 11am
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This chapter analyses the impact COVID-19 income supports have had on poverty rates and income in the 2020 calendar income reference year for 2021 SILC respondents. For the purposes of this report, COVID-19 income supports include the Pandemic Unemployment Payment (PUP), the Temporary Wage Subsidy Scheme (TWSS) and the Employment Wage Subsidy Scheme (EWSS). Hereafter, the TWSS and EWSS combined will be referred to as Wage Subsidy Schemes (WSS).

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When COVID-19 income supports are removed from income the at risk of poverty rate (using the standard at risk of poverty threshold of €15,158) would have been 19.9%, more than eight percentage points higher than the 11.6% rate with supports. Without the PUP, but including the WSS, the at risk of poverty rate have would have been 16.5%; and without the WSS, but including PUP, the rate would have been 15.0%. The consistent poverty rate in SILC 2021 was 4.0%, without COVID-19 supports it would have been 6.3%. Note that the counterfactual ‘without supports’ makes no attempt to estimate likely incomes from receipt of ‘traditional’ out-of-work supports, like Jobseeker's Allowance or Jobseeker's Benefit, that an individual may have been entitled to receive had COVID-19 income supports not been available. See table 4.1 & figure 4.1.

X-axis labelAt Risk of Poverty
With COVID-19 Supports11.6
Without WSS15
Without PUP16.5
Without COVID-19 Supports19.9
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The pandemic and the resulting COVID-19 supports impacted people and households differently across Irish society. When analysing the various demographic breakdowns, it should be noted that poverty rates and income statistics are based on the combined income of all household occupants.

From figure 4.2 it is evident that COVID-19 income supports had a greater impact on the risk of poverty of younger age groups. Those aged 0-17 were the most affected as their poverty risk was reduced by almost 11 percentage points from 24.2% without supports to 13.6% when supports were included.

Those aged 35-49 were the next most supported age group, as the risk of poverty rate without supports would have been 20.1%, double the rate of 10.0% with supports included.

Those aged 65 and over were least affected by COVID-19 income supports with their risk of poverty rate decreasing from 13.0% without supports to 11.9% with supports.

With supports, the 50-64 age group was most likely to be at risk of poverty (14.4%), followed by children aged 0-17 (13.6%). While those aged 18-34 were least likely to be at risk of poverty (8.7%). See table 4.1 & figure 4.2.

X-axis labelWith COVID-19 SupportsWithout WSSWithout PUPWithout COVID-19 Supports
0-1713.618.72024.2
18-348.712.513.918.2
35-491014.315.720.1
50-6414.416.219.121.2
65+11.912.312.413

The at risk of poverty rate without supports, for those who described their Principal Economic Status (PES) as employed, was more than double the rate with supports (11.7% compared with 4.4%). For those that described their PES as student or pupil the without support rate was 28.2%, more than 10 percentage points higher than the with support rate of 17.4%.

In SILC, PES is self-defined at the time of interview, whereas the income reference period is the calendar year T-1. Thus, in SILC 2021 the economic status of respondents may not always seem in line with the types of income received. For example, it is possible for individuals to have described their status as employed when interviewed in 2021 and to have been unemployed and in receipt of PUP in 2020. In SILC 2021, of unemployed persons, 56% had employment income in the 2020 calendar year; 16.2% received income through the WSS; and 38.4% received PUP in 2020.

With supports, persons who were unable to work due to long-standing health problems were most likely to be at risk of poverty (39.1%), followed by the unemployed (23.2%). Without COVID-19 income supports they would have had at risk of poverty rates of 46.3% and 44.1%, respectively.

The PUP had the largest impact on unemployed individuals, whose risk of poverty would have been 40.4% without PUP, compared with 23.2% with supports. See table 4.1 & figure 4.3.

X-axis labelWith COVID-19 SupportsWithout WSSWithout PUPWithout COVID-19 Supports
Employed4.47.78.211.7
Unemployed23.227.840.444.1
Retired11.811.912.212.5
Unable to work due to long-standing health problems39.139.744.746.3
Student, pupil17.421.823.128.2
Fulfilling domestic tasks19.524.32327.1

Analysing by household composition, without COVID-19 income supports, persons in one adult households with one or more children were the most likely to be at risk of poverty in SILC 2021 with a rate of 37.2%. When supports are included their rate falls almost 15 percentage points to 22.8%. With supports, single adult households under 65 years without children are most at risk of poverty with a rate of 28.8%.

By highest level of education, those individuals with a lower secondary education were most at risk of poverty in SILC 2021 without supports, while those with primary or below were most at risk of poverty with supports. COVID-19 income supports reduce the poverty risk the most for those with a highest level of education of post Leaving Certificate, reducing them by 12.3 percentage points when supports were included.  See table 4.1.

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Composition of Net Equivalised Disposable Income

Figure 4.4 looks at the breakdown of income components by decile of net equivalised disposable income. Net equivalised disposable income accounts for the size and composition of households and thus has a different distribution to net household disposable income which is analysed later in the chapter. Respondents are split into 10 groups (deciles) based upon their income, with the 10% of individuals with the lowest net equivalised income in the 1st decile and the 10% of individuals with the highest net equivalised income in the 10th decile.

In SILC 2021, social transfers excluding PUP accounted for 65.9% of equivalised disposable income for those in the 1st decile and employment income excluding WSS accounted for 25.3% of income in this decile. Moving up the deciles the proportion of income from social transfers decreases, with 4.0% of equivalised disposable income coming from this source in the 10th decile.

Employment income excluding WSS accounts for a greater proportion of equivalised disposable income moving up the income distribution, accounting for approximately 80.0% of income in the 9th and 10th deciles.

Other income is more relevant to the upper deciles, increasing from 1.8% of equivalised disposable income in the 1st decile, to 9.1% in the 9th decile and 15.0% in the 10th decile. Here, other income includes occupational pensions, rental income, interest or dividend income from savings and investment and differs from the ‘other income’ previously discussed in the Income chapter.

COVID-19 income supports accounted for between 7.0% and 12.4% of equivalised disposable income in each decile from the 1st to the 8th decile. From the 7th decile and up the proportion of income accounted for by COVID-19 supports decreased, with 2.2% of income coming from this source in the 10th decile.

The PUP accounted for between 0.8% (10th decile) and 6.8% (4th decile) of equivalised disposable income across the distribution. The WSS accounted for between 1.4% (10th decile) and 5.5% (4th decile) of income across the distribution. See table 4.2 & figure 4.4.

X-axis labelEmployment Income excluding WSSWage Subsidy SchemesPandemic Unemployment PaymentSocial Transfers excluding PUPOther Income
Decile 125.32.44.665.91.8
Decile 2294.16.259.31.4
Decile 341.35.16.543.73.5
Decile 452.75.56.831.23.8
Decile 557.24.45.426.46.6
Decile 666.64.65.815.67.3
Decile 773.94.1411.36.7
Decile 877.43.73.28.57.2
Decile 9803.11.76.19.1
Decile 1078.81.40.8415
State66.13.53.718.78.1

Looking at the mean equivalised value of COVID-19 income supports by net equivalised disposable income deciles, figure 4.5 shows that those in the 6th decile had the highest average COVID-19 support payments with an average equivalised payment of €2,816 in income reference year 2020, followed by the 4th (€2,610) and 7th (€2,463) deciles. The 1st decile received the lowest amount in COVID-19 income supports with an average of €823. This is followed by 10th decile which received an average of €1,434 in COVID-19 supports. Deciles 4 to 8 all received an average equivalised payment of greater than €2,300 in income reference year 2020.

The 6th decile received the largest average amount from PUP (€1,567) while those in the 8th decile received the most from WSS (€1,289). Those individuals in the 10th decile received the least PUP amount (€537) while the 1st decile had the lowest average WSS amount of €281.  See table 4.2 and figure 4.5.

X-axis labelPandemic Unemployment PaymentWage Subsidy Schemes
Decile 1542281
Decile 2991648
Decile 31182928
Decile 414451165
Decile 513031052
Decile 615671249
Decile 712161247
Decile 811111289
Decile 96961246
Decile 10537897
State10591000
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Figure 4.6 looks at the breakdown of income components by decile for net household disposable income. The average household size in each decile increases moving up the income distribution, as households with more people tend to have greater income. For households in the 1st decile more than 90% of household disposable income was received through social transfers excluding PUP, while employment income excluding WSS accounted for 7.1% of income. Moving up through the deciles the proportion of income from social transfers decreases, with households in decile 10 receiving 4.0% of their income from this source. Employment income excluding WSS accounts for a greater proportion of net household disposable income as you move up the income distribution up to the 9th and 10th deciles where it accounted for 81% of household income.

COVID-19 income supports accounted for a similar proportion (between 7.4% and 10.8%) of total net household disposable income in each decile from the 2nd to the 8th decile. The 1st decile had the smallest proportion of income accounted for by supports with just 0.6% of income coming from this source followed by the 10th decile with 4.1%.

The PUP accounted for between 0.5% (1st decile) and 5.7% (6th decile) of net disposable household income across the distribution. The WSS accounted for between 0.2% (1st decile) and 5.1% (6th decile) of household income across the distribution. See figure 4.6.

X-axis labelEmployment Income excluding WSSWage Subsidy SchemesPandemic Unemployment PaymentSocial Transfers excluding PUPOther Income
Decile 17.10.20.591.31
Decile 217.52.25.264.310.8
Decile 325.14.44.853.312.4
Decile 442.83.94.437.910.9
Decile 548.14.25.431.111.2
Decile 659.95.15.719.89.4
Decile 765.34.44.916.58.8
Decile 873.343.511.87.5
Decile 981.13.337.45.1
Decile 1080.72.12411.3
State64.43.43.619.49.1

In SILC 2021, households in the first household disposable income decile received on average just under €80 in COVID-19 income supports compared to almost €5,780 by those households in the top decile. Deciles 6 to 10 all received an average payment of greater than €5,000 in income reference year 2020, while decile 1 to 5 all received less than €4,020 in COVID-19 income supports.

The 7th decile received the largest amount from PUP while the 10th decile received the most from WSS. The 1st decile received the least average amount in both PUP and WSS. See table 4.3 and figure 4.7.

X-axis labelPandemic Unemployment PaymentWage Subsidy Schemes
Decile 15921
Decile 21008439
Decile 313481233
Decile 415601374
Decile 522481769
Decile 628842598
Decile 729572625
Decile 824332784
Decile 925872905
Decile 1027882993
State19881875
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Median net equivalised disposable income increased by 5.2% from SILC 2020 to 2021, but would have fallen by 3.7% without COVID-19 income supports.

Mean net equivalised disposable income increased by 3.6% from SILC 2020 to SILC 2021, when COVID-19 Income supports are included. Without these supports equivalised income would have fallen by 3.9%. Thus, COVID-19 income supports increased annual growth by 7.5 percentage points for individuals. The relative impact these supports varied across the income distribution as illustrated in figure 4.8 where the orange line shows the change in income without COVID-19 income supports, the green line with supports. The gap between the lines demonstrates the scale of the mitigating effects of the COVID-19 income supports and the relative effect they had across the distribution.

Individuals in the 1st decile had the largest annual income growth in net equivalised disposable income including COVID-19 income supports where income increased by 7.9% in the year, without supports the annual growth would have been 0.3%.

The 4th decile had the largest gap between with and without supports income growth of the ten deciles, having a 13.2 percentage gap between the with (6.2%) and without (-7.0%) supports income growth.

All deciles from decile 2 to decile 10 would have seen a fall in their equivalised disposable income between SILC 2020 and 2021 without COVID-19 income supports. When supports are included average income increased year-on-year in all deciles, apart from the 10th decile. Equivalised income of individuals in the 10th decile fell by 1.5% with COVID-19 income supports from 2020 to 2021 and would have fallen by 3.7% without COVID-19 income supports. This gap of 2.2 percentage points represents the smallest gap between the with and without supports income growth of the ten deciles.  See table 4.4 & figure 4.8.

X-axis labelWith COVID-19 Income SupportsWithout COVID-19 Income Supports
Decile 17.90.3
Decile 27.4-3.6
Decile 35.1-7
Decile 46.2-7
Decile 56-4.4
Decile 65.9-5.2
Decile 75.4-3.1
Decile 83-4.1
Decile 93.6-1.3
Decile 10-1.5-3.7

Median disposable household income increased by 5.8% from SILC 2020 to 2021 but would have fallen by 6.2% without supports.

The year-on-year change in mean net disposable household income would have fallen by 3.9% and in all deciles, apart from the 1st decile, in the year to SILC 2021 without supports. When supports are included average income increased year-on-year by 3.4% and in all deciles across the distribution. See figure 4.9.

Further analysing the annual growth in household income by decile, it is notable that the effects of COVID-19 income supports were more evenly spread across the household income distribution when compared to the equivalised income distribution in figure 4.8. The gap between the year-on-year change in household income with supports and without supports was relatively consistent between the 2nd and 8th deciles, where the gap ranged between 7.4 and 11.4 percentage points.

Households in the 1st decile had the smallest gap between the annual income growth, with and without supports, with a 0.6 percentage point gap. Households in the 10th and 9th deciles were next least impacted by the COVID-19 income supports with a gap between their annual income growth, with and without supports, of 4.1 and 6.6 percentage points respectively.

X-axis labelWith COVID-19 Income SupportsWithout COVID-19 Income Supports
Decile 14.33.7
Decile 20.4-7
Decile 33.8-5.8
Decile 44-4.7
Decile 53.6-6.3
Decile 65.4-6
Decile 74.6-5.2
Decile 84.8-3
Decile 94.9-1.7
Decile 100.7-3.4
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Table 4.1 Impact of COVID-19 supports on at risk of poverty and consistent poverty rates by demographic characteristics, 2021

Table 4.2 Composition of net equivalised disposable income by decile, 2021

Table 4.3 Composition of net household disposable income by decile, 2021

Table 4.4 Year-on-year % change in net equivalised and household disposable income, with and without COVID-19 income supports, by deciles, 2020 to 2021

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