Survey on Income and Living Conditions (SILC) 2022

Introduction

This chapter analyses the impact COVID-19 income supports have had on poverty rates and income in the 2021 calendar income reference year for 2022 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).

Impact of COVID-19 income supports on the at risk of poverty rate

In SILC 2022, the at risk of poverty rate was 13.1%, up 1.5 percentage points from 11.6% in SILC 2021 and similar to the 2020 estimate of 13.2%. Without COVID-19 income supports the at risk of poverty rate would have been 19.9% in SILC 2021 and 20.5% in SILC 2022.

Without the PUP, but including the WSS, the at risk of poverty rate have would have been 16.7% in SILC 2022, compared to 16.5% in 2021. Without the WSS, but including PUP, the rate would have been 16.9% in SILC 2022 up from a rate of 15.0% in SILC 2021. See table 6.1 & figure 6.1. 

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 6.1 and figure 6.1.

In SILC 2022, when COVID-19 income supports are removed from income the at risk of poverty rate (using the standard at risk of poverty threshold of €15,754) would have been 20.5%, more than seven percentage points higher than the 13.1% rate with supports.  Without the PUP, but including the WSS, the at risk of poverty rate have would have been 16.7%; without the WSS, but including PUP, the rate would have been 16.9%. See table 6.1 & figure 6.2. 

Demographic analysis of poverty risk with and without COVID-19 income supports

The pandemic and the resulting COVID-19 income 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 6.3 it is evident that COVID-19 income supports had a greater impact on the risk of poverty of younger age groups in SILC 2022. Those aged 18-34 were the most affected as their poverty risk was reduced by over 9 percentage points, from 17.1% without supports to 7.8% when supports were included.

Those aged 0-17 were the next most supported age group, as the risk of poverty rate without supports would have been 24.2%, nine percentage points higher than the rate of 15.2% with supports included.

Those aged 65 and over were least affected by COVID-19 income supports in SILC 2022 with their risk of poverty rate decreasing from 20.0% without supports to 19.0% with supports.

With supports, the 65+ age group were most likely to be at risk of poverty (19.0%), followed by children aged 0-17 (15.2%). While those aged 18-34 were least likely to be at risk of poverty (7.8%). See table 6.1 & figure 6.3. 

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 (13.6% compared with 5.8%). For those that described their PES as student or pupil the without support rate was 23.0%, more than nine percentage points higher than with support rate of 13.7%.

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 2022 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 2022 and to have been unemployed and in receipt of PUP in 2021.

With supports, persons who were unemployed were most likely to be at risk of poverty (35.6%), followed by those who were unable to work due to long-standing health problems (35.2%). Without COVID-19 income supports they would have had at risk of poverty rates of 52.8% and 44.3%, respectively.

The PUP had the largest impact on unemployed individuals, whose risk of poverty would have been 43.6% without PUP, compared with 35.6% with supports. See table 6.1 & figure 6.4.

Analysing by household composition, without COVID-19 income supports, persons in single adult households under 65 years without children were the most likely to be at risk of poverty in SILC 2022 with a rate of 37.7%. When supports are included their rate falls 5.7 percentage points to 32.0%. With supports, single adult households over 65 years without children are most at risk of poverty with a rate of 33.6%.

By highest level of education, those individuals with an education level of primary or below were most at risk of poverty in SILC 2022 both with supports (29.7%) and without supports (33.5%). 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 11.1 percentage points from 24.8% to 13.7% when supports were included.  See table 6.1.

Impact of COVID-19 income supports on income

Composition of Net Household Disposable Income

Figure 6.5 looks at the breakdown of income components by decile for net household disposable income. 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 household disposable income in the 10th decile. 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 5.4% of income. Moving up through the deciles the proportion of income from social transfers decreases, with households in decile 10 receiving 3.7% 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 10^th decile where it accounted for 82.7% of household income.

COVID-19 income supports accounted for a similar proportion (between 5.9% and 9.7%) 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 2.8% of income coming from this source followed by the 10th decile with 3.0%.

The PUP accounted for between 1.1% (1^st and 10^th decile) and 5.9% (5th decile) of net disposable household income across the distribution. The WSS accounted for between 1.7% (1^st decile) and 4.9% (3^rd decile) of household income across the distribution. See table 6.2 and figure 6.5.

In SILC 2022, households in the first household disposable income decile received on average just under €355 in COVID-19 income supports compared to almost €4,536 by those households in the top decile. Deciles 5 to 10 all received an average payment of greater than €3,700 in SILC 2022 while decile 1 to 4 all received less than €2,400 in COVID-19 income supports. Deciles 6 to 10 all received over €900 less in COIVD-19 income supports in 2022 compared to what was received those deciles in SILC 2021. Decile 1 and 5 received more on average in COVID-19 income supports in SILC 2022 compared to SILC 2021.

In SILC 2022, the 5th 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 6.2 and figure 6.6.

Composition of Net Equivalised Disposable Income

Figure 6.7 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. 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 2022, social transfers excluding PUP accounted for 68.5% of equivalised disposable income for those in the 1st decile and employment income excluding WSS accounted for 21.2% of income in this decile. Moving up the deciles the proportion of income from social transfers excluding PUP decreases, with 3.6% 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 81% of income in the 9th and 10th deciles.

Other income is more relevant to the upper deciles, increasing from 1.5% of equivalised disposable income in the 1st decile, to 8.1% in the 9th decile and 13.8% in the 10^th 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 6.7% and 11.4% of equivalised disposable income in each decile from the 1st to the 7th decile. From the 7th decile and up, the proportion of income accounted for by COVID-19 supports decreased, with 0.9% of income coming from this source in the 10th decile.

The PUP accounted for between 0.4% (10th decile) and 5.6% (3^rd decile) of equivalised disposable income across the distribution. The WSS accounted for between 0.5% (10th decile) and 5.8% (3^rd decile) of income across the distribution. See table 6.3 & figure 6.7.

Looking at the mean equivalised value of COVID-19 income supports by net equivalised disposable income deciles, figure 6.8 shows that those in the 7th decile had the highest average COVID-19 support payments with an average equivalised payment of €2,244 in income reference year 2021, followed by the 3rd (€2,136) and 5th (€2,076) deciles. The 10th decile received the lowest amount in COVID-19 income supports with an average of €632. This is followed by 1st decile which received an average of €1,050 in COVID-19 supports. Deciles 3 to 8 all received an average equivalised payment of greater than €1,700 in SILC 2022. Decile 2 and deciles 4 to 10 received less on average in COVID-19 income supports in SILC 2022 compared to SILC 2021.

In SILC 2022, the 5th decile received the largest average amount from PUP (€1,066) while those in the 7th decile received the most from WSS (€1,335). Those individuals in the 10th decile received the least PUP amount (€264) and had the lowest average WSS amount of €368.  See table 6.3 and figure 6.8.

Income Change SILC 2020 to 2022

Net household disposable income increased by 3.4% from SILC 2020 to SILC 2021 and by 6.8% from SILC 2020 to SILC 2022, when COVID-19 Income supports are included. Without these supports equivalised income would have fallen by 3.9% from SILC 2020 to SILC 2021 and would have increased by 0.9% from SILC 2020 to SILC 2022. Thus, COVID-19 income supports increased annual growth by 7.3 percentage points for households in SILC 2021 and 5.9 percentage points in SILC 2022. The relative impact of these supports varied across the income distribution as illustrated in figure 6.9. The gap between the with supports and without supports for SILC 2021 and SILC 2022 demonstrates the scale of the mitigating effects of the COVID-19 income supports and the relative effect they had across the household income distribution.

Across the income distribution, the average net disposable household income, with COVID-19 income supports, increased in all deciles from SILC 2020 to SILC 2021 and increased by a greater amount from SILC 2020 to SILC 2022 in all deciles except decile 1. The further up the household income distribution the greater the gap between the growth rate to SILC 2021 and SILC 2022.

Without COVID-19 income supports, net disposable household income would have fallen in all deciles except decile 1 from SILC 2020 to SILC 2021. However, from SILC 2020 to SILC 2022, household income would have fallen in deciles 2 to 6 but would have increased in deciles 7 to 10. The gap between the household income growth rate to SILC 2021 and SILC 2022 increases the further up the net disposable household income distribution you go.

Further analysing the growth in net disposable household income from SILC 2020 to SILC2022 it is noticeable that the gap between the change in household income with supports and without supports was highest between the 3^rd and 7th deciles, where the gap ranged between 7.4 and 10.2 percentage points. Households in the 1st decile had the smallest gap between the income growth, with and without supports, with a 2.9 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 income growth, with and without supports, of 3.2 and 4.6 percentage points respectively. See table 6.4 and figure 6.9.

Net equivalised disposable income increased by 3.6% from SILC 2020 to SILC 2021 and by 8.0% from SILC 2020 to SILC 2022, when COVID-19 Income supports are included. Without these supports equivalised income would have fallen by 3.9% from SILC 2020 to SILC 2021 and would have increased by 1.9% from SILC 2020 to SILC 2022. Thus, COVID-19 income supports increased annual growth by 7.5 percentage points for individuals in SILC 2021 and 6.1 percentage points in SILC 2022. The relative impact of these supports varied across the income distribution as illustrated in figure 6.10. The gap between the with supports and without supports for SILC 2021 and SILC 2022 demonstrates the scale of the mitigating effects of the COVID-19 income supports and the relative effect they had across the equivalised income 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%.

Across the income distribution, the average net equivalised disposable income, with COVID-19 income supports, increased in all deciles, except decile 10, from SILC 2020 to SILC 2021 and increased by a greater amount from SILC 2020 to SILC 2022 in all deciles. The gap between the growth rate to SILC 2021 and SILC 2022 was relatively consistent across all deciles with the exception of decile 10.

Without COVID-19 income supports, net equivalised disposable income would have fallen in all deciles except decile 1 from SILC 2020 to SILC 2021. From SILC 2020 to SILC 2022, equivalised income would have fallen in deciles 1 to 3 but would have . The gap between the equivalised income growth rate to SILC 2021 and SILC 2022 widened the further up the equivalised income distribution you go.

Further analysing the growth in net equivalised disposable income from SILC 2020 to SILC2022 it is noticeable that the gap between the change in household income with supports and without supports was highest between the 1st and 5th deciles, where the gap ranged between 8.8 and 12.3 percentage points. The gap between the with and without supports growth rate to SILC 2022 narrowed from decile 6 to decile 10.

Households in the 10th decile had the smallest gap between the income growth, with and without supports, with a 0.9 percentage point gap. Households in the 9th and 8th deciles were next least impacted by the COVID-19 income supports with a gap between their income growth, with and without supports, of 4.0 and 5.7 percentage points respectively. See table 6.4 and figure 6.10.

Impact of COVID-19 Income Supports on Poverty Tables 6.1 to 6.4