Survey on Income and Living Conditions (SILC) 2023

Introduction

In 2022, the Government announced a series of cost-of-living measures aimed at helping households meet higher costs. The annual average rate of inflation in 2022 was +7.8%. The largest price increases were recorded for Housing, Water, Electricity, Gas & Other Fuels at 20.6%. For further information see Consumer Price Index December 2022.

In this chapter, poverty rates are calculated ‘Excluding cost-of-living measures’ (what poverty rates would have been if cost-of-living measures were not implemented in 2022). ‘Excluding cost-of-living measures’ calculates the at risk of poverty rate (using the standard at risk of poverty threshold of €16,558).

The cost-of-living measures that were considered when calculating poverty rates ‘Excluding cost-of-living measures’ are listed below.

Between March and May 2022, the following cost-of-living measures, aimed at helping households pay higher energy bills were introduced:

• a universal €200 energy credit applied to domestic electricity customer accounts in the March/April 2022 billing cycle.
• a €125 lump sum Fuel Allowance paid in March 2022 to all households that were in receipt of the Fuel Allowance;
• a €100 lump sum Fuel Allowance paid in May 2022 to all households that were in receipt of the Fuel Allowance.

In July 2022, the rates of payments for the Back to School Clothing and Footwear Allowance scheme were increased by €100 for each eligible child.

Budget 2023 contained additional cost-of-living measures that were paid to individuals and households during the latter part of 2022. Budget cost-of-living measures that were paid/implemented in 2022 included:

• a double week payment for most people in receipt of a weekly social welfare payment (including all pensioners, carers and people on disability payments);
• a €400 lump sum Fuel Allowance payment to all households that were in receipt of the Fuel Allowance;
• a €200 cost-of-living lump sum payment for pensioners and people with a disability in receipt of the Living Alone Increase;
• a €500 cost-of-living lump sum payment to recipients of the Working Family Payment;
• a double Child Benefit payment;
• a €500 cost-of-living lump sum payment for people getting the Carer's Support Grant;
• a €500 cost-of-living lump sum for people in receipt of Disability Allowance, Invalidity Pension or Blind Pension;
• a universal €200 energy credit applied to domestic electricity customer accounts in the November/December 2022 billing cycle;
• a once-off extra maintenance payment (equivalent to one month’s maintenance grant payment at 2022 levels) to Student Universal Support Ireland (SUSI) maintenance grant recipients.

The income reference period of SILC in year T is the calendar year T-1, therefore 2023 poverty rates were calculated by using January to December 2022 income. The electricity credits that households received in 2022 are treated as income in the SILC survey.

Impact of Cost-of-Living Measures on National Poverty Rates

The 2023 national at risk of poverty rate was 10.6%, down from 12.5% in 2022. Excluding cost-of-living measures the at risk of poverty rate (using the standard at risk of poverty threshold of €16,558) would have been 13.0%. The 2023 consistent poverty rate was 3.6%. Without cost-of-living measures, the rate would have been almost one percentage point higher at 4.4%, closer to the 2022 rate of 4.9%. See figure 6.1, table 6.1 and table 5.1 in Poverty Chapter.

Impact of Cost-of-Living Measures on at Risk of Poverty Rates by Age Group

Although the national at risk of poverty rate went down by almost two percentage points from 12.5% in 2022 to 10.6% in 2023, analysis by age group does not show significant decreases in poverty rates except for people aged 65 and over. For example, the 2023 at risk of poverty rate for people aged 0-17 was 14.3%, almost unchanged from the 2022 rate of 14.7%. The at risk of poverty rate for people aged 65 and over was 20.1% in 2022 and decreased by almost 12 percentage points to 8.3% in 2023. See figure 6.2 and table 5.1 in chapter 5.

Analysis of the impact of the cost-of-living measures on reducing the at risk of poverty rates by age group shows that the largest impact was for people aged 65 years and older. Cost-of-living measures reduced the at risk of poverty rate for people in this age group from 16.9% to 8.3%. Cost-of-living measures had the least impact on reducing the poverty rates of those aged 18 to 34. Excluding cost-of-living measures, the at risk of poverty rate for people aged 18 to 34 would have been 9.2%. Including cost-of-living measures, their poverty rate was 8.6%. See figure 6.2 and table 6.1.

Analysis of equivalised disposable income, excluding cost-of-living measures, by age group shows that the proportion of people aged 65 and over with income that was relatively close to the standard at risk of poverty threshold (€16,558) was higher than that for other age groups. This is one reason why the cost-of-living measures had such a significant impact on reducing the at risk of poverty rate for this age group.

In 2023, more than one in ten (11.7%) people aged 65 or over had equivalised disposable income (excluding cost-of-living measures) less than €2,000 below the at risk of poverty threshold. Of this age group, 7.9% had equivalised disposable income less than €1,000 below the threshold. The comparable rates for people aged 18-34 was 3.0% within €2,000 of the threshold and 1.4% within €1,000 of the threshold (See Figure 6.3). For information on how equivalised income is calculated, see At Risk of Poverty Indicators Explained (PDF 1,094KB) .

In 2022, older people were also more likely to have received some of the non-universal cost-of-living measures. Census 2022 results show that 13.8% of the population were aged 65 or over in April 2022, see PxStat F1015. Statistics published by the Department of Social Protection shows that out of 386,846 Fuel Allowance recipients in 2022, 145,610 (37.6%) were also in receipt of either the State Pension (Contributory) or the State Pension (Non-Contributory). 

The following worked example shows how the 2022 cost-of-living measures could move an elderly person’s equivalised disposable income over the at risk of poverty threshold.

In 2022, if an elderly SILC respondent living on their own, did not receive any market income, had a €0 net value for interhousehold transfers and received the following social welfare transfers:   

• non-contributory State Pension paid at the maximum personal rate including the Christmas bonus (annual total €12,826);
• weekly Living Alone Increase (annual total €1,166);
• the Household Benefit Package (annual total €580);
• the Fuel Allowance (annual total €924);

then this person’s equivalised disposable income in 2022 would have been €15,496, approximately €1,000 less than the at risk of poverty threshold of €16,558.

If, in addition to the above, this person received the following cost-of-living measures in 2022:

• two universal €200 energy credits (annual total €400);
• a double week Non-contributory State Pension payment with a Living Alone Increase (€264);
• three lump sum cost-of-living Fuel Allowance payments (annual total €625);
• a €200 cost-of-living lump sum payment for pensioners in receipt of the Living Alone Increase;

then the respondent’s equivalised disposable income including cost-of-living measures would have been €16,985, i.e. more than €400 higher than the 2023 at risk of poverty threshold. 2022 social welfare rates see can be viewed Table showing Rates of Main Weekly Social Welfare payments since 2016 to 2022 (PDF 498KB) .

As mentioned above, 8.3% of people aged 65 and over were at risk of poverty in 2023. Without cost-of-living measures the at risk of poverty rate for this age group (using the standard at risk of poverty threshold of €16,558) would have been 16.9%. Analysis of poverty rates using poverty thresholds +/- €1,000 of the 2023 threshold (i.e. €15,558 and €17,558) shows that without cost-of-living measure the at risk of poverty rate for people aged 65 and over would have been 8.9% with a threshold €1,000 lower than the 2023 threshold and 22.8% with a threshold €1,000 higher than the 2023 threshold.

The comparable at risk of poverty rates for €1,000 lower and €1,000 higher than the at risk of poverty threshold for equivalised disposable income including cost-of-living measures are 5.3% and 15.3% respectively. This shows the sensitivity of the at risk of poverty rate for people aged 65 and over to at risk of poverty thresholds +/- €1,000 of the 2023 threshold. See Figure 6.4.

Impact of Cost-of-Living Measures on at Risk of Poverty Rates by Household Composition

Analysis by household composition on the impact of cost-of-living measures in reducing poverty rates shows that the largest impact was on reducing the at risk of poverty rate in single-adult households composed of one adult aged 65 years and over. In 2022, 41.3% of people living in these households were at risk of poverty. This rate dropped to 15.4% in 2023. Excluding cost-of-living measures their 2023 at risk of poverty rate would have been 36.0% in 2023.

The impact of the cost-of-living measures paid at the household level on equivalised income is determined by household size and composition. For example, the €625 cost-of-living lump sum Fuel Allowance payments increased the equivalised income of a person living in a single-adult household by €625 (as the equivalised household size for a single adult household is 1). However, these payments increased the equivalised income of each person living in a three-adult household by €269 (as the equivalised household size of a household composed of three adults is 2.32). This may explain why the cost-of-living measures had a greater impact on reducing the poverty rates of persons aged 65 and over who live in single person households when compared with people in multi-person households where at least one person was 65 years or older.

For households with children, the largest impact in reducing at risk of poverty rates was for single-adult households with at least one child under 18 years. In 2022, more than one in four (27.0%) people living in these households were at risk of poverty. This rate decreased to less than one in five (19.2%) in 2023 and excluding cost-of-living measures the rate would have been one in four (24.7%). By comparison, 14.2% of people living in two adult households with one to three children were at risk of poverty in 2023, without cost-of-living measures the rate would have had been just one percentage point higher at 15.2%. See figure 6.5, table 6.1 and table 5.1 in Poverty Chapter.

Impact of Cost-of-Living Measures on at Risk of Poverty Rates by Tenure Status

Analysis of the impact of the cost-of living measures on reducing the at risk of poverty rates by tenure status shows that, in percentage point terms, the largest impact was for people living in rented accommodation. In 2023, almost one in four (19.7%) people living in rented accommodation were at risk of poverty. Without cost-of-living measures almost one in five (23.4%) people living in rented accommodation would have been at risk of poverty. For people living in owner-occupied accommodation, 6.5% were at risk of poverty in 2023. Without cost-of-living measures their at risk of poverty rate would have been 8.3%. See Figure 6.6 and Table 6.1.

Impact of Cost-of-Living Measures on Consistent Poverty Rates by Age Group

The consistent poverty measure is defined as the proportion of people who are both at risk of poverty and experiencing enforced deprivation, see At Risk of Poverty Indicators Explained (PDF 1,094KB) . In 2023, the enforced deprivation rate was 17.3% and the at risk of poverty rate was 10.6%. In 2022, the enforced deprivation rate was 16.6% and the at risk of poverty rate was 12.5%. Therefore, the enforced deprivation rate went up in 2023 and the at risk of poverty rate went down. At the national level, the 2023 consistent poverty rate was 3.6%, down from 4.9% in 2022. Without cost-of-living measures the rate would have been 4.4% in 2023.

Analysis by age group shows that the cost-of-living measures had the largest impact on decreasing the consistent poverty rate for people aged 65 years and older. Excluding cost-of-living measures, their consistent poverty rate would have been 3.4%, two percentage points higher than their 2023 consistent poverty rate (1.4%). Although the national enforced deprivation rate went up from 16.6% in 2022 to 17.3% in 2023, the enforced deprivation rate for people aged 65 and over actually went down from 12.7% in 2022 to 10.7% in 2023. This fall in the enforced deprivation rate combined with the significant decrease in their at risk of poverty rate resulted in a significant decrease in the consistent poverty rate of people aged 65 years and older. See figure 6.7, table 6.1 and table 5.1 in Poverty Chapter.

Impact of Cost-of-Living Measures on Consistent Poverty Rates by Household Composition

The consisted poverty rate for single-person households composed of one adult aged 65 and over was 10.5% in 2022. Excluding cost-of-living measures the consistent poverty rate for this type of household would have been relatively unchanged (10.0%) in 2023. Including cost-of-living measures the consistent poverty rate for single person households composed of a person aged 65 years or older was 3.2%. People living in single adult households with children under the age of 18 years also experienced a large decrease in their consistent poverty rate, decreasing from 15.5% in 2022 to 7.1% in 2023. Without cost-of-living measures, their consistent poverty rate would have been 9.3%. See figure 6.8, table 6.1. and table 5.1 in Poverty Chapter.

Impact of Cost-of-Living Measures on Consistent Poverty Rates by Tenure Status

As already mentioned in Chapter 5, people living in rented accommodation were three times more likely to be at risk of poverty than people living in owner-occupied accommodation (19.7% versus 6.5%). In 2023, renters were four times more likely to be living in enforced deprivation than those in owner-occupied homes, with more than one in three (36.5%) people living in rented or rent-free accommodation living in enforced deprivation, compared with less than one in ten (8.8%) people living in owner-occupied housing. The cost-of-living measures had a much greater impact on reducing the consistent poverty rate for people living in rented accommodation. Without cost-of-living measures, the consistent poverty rate for people living in rented accommodation would have been relatively unchanged in 2023, with 11.4% of renters living in consistent poverty in 2022 compared with 10.4% in 2023. Including cost-of-living measures, the consistent poverty rate for people living in rented accommodation was 8.5%. See figure 6.9, table 6.1. and table 5.1 in Poverty Chapter.

At Risk of Poverty Rate Anchored at a Moment in Time

For a given year, the “at risk of poverty rate anchored at a moment in time” is the share of the population whose income in a given year is below the at risk of poverty threshold calculated in the standard way for a previous base year and then adjusted for inflation.  The purpose of this indicator is to get some indication of the changes in ‘absolute poverty’ over time.  The deflator is derived from the monthly Consumer Price Index (CPI) and takes into account the rolling nature of the income data collected by SILC.

In 2020 the at risk of poverty rate was 12.8%. Adjusting the 2020 at risk of poverty threshold for inflation and using the adjusted 2020 threshold value to recalculate poverty rates in subsequent years shows a decrease in the 2021 at risk of poverty rate (8.5%), a further decrease in 2022 to 8.0% and an increase in 2023 to 9.1%. See figure 6.10 and table 6.12.

The 2023 at risk of poverty rate was 10.6% down from 12.5% in 2022. If the 2023 at risk of poverty rate was calculated by using the inflation adjusted 2022 threshold, then the at risk of poverty rate in 2023 would have been 13.6%. In other words, the 2023 at risk of poverty rate anchored at 2022 was 13.6% compared with the actual rate of 10.6%. See table 6.12.