Poverty Insights - Income Reference Periods 2018 to 2020

Revisions to Poverty Insight - Income reference Period 2018 to 2020

SILC data 2020 to 2022 was revised on 07 Match 2024 due to changes made to weights, reflecting updated household population benchmarks, because of the availability of Census 2022 data.
The data in Poverty Insights - Income Reference Periods 2018 to 2020 was published on 17 December 2021 and does not reflect these revisions. For the most up to date SILC data please see or SILC PxStat.

With the release of SILC 2021 results on 06/05/2022, the results for SILC 2020 have been updated to better reflect the tenure distribution of households in Ireland. Subsequently, this Frontier publication ‘SILC 2019’ was updated at 11am on 09/06/2022 to reflect the changes made to SILC 2020. In this publication SILC 2020 forms the basis for the results relating to income reference years 2019 and 2020.

In SILC, weights are applied to the data to ensure the results are reflective of the population as a whole. The survey weights for SILC 2020 have been adjusted to better reflect the estimated household distribution within the rental sector. In the Poverty Insights publication this has not impacted the overall at risk of poverty rate for income reference year 2019 (unchanged at 13.2%) but it has resulted in a reduction in the at risk of poverty rate for income reference year 2020 (12.8% compared with the previously published rate of 13.2%).

Methodology

Results from the Poverty Insight Frontier Publication are from income reference periods 2018 to 2020. Official results based on 2019 calendar income applies the same methodology as the Survey on Income and Living Conditions (SILC) for 2020. See SILC 2020 Background Notes. Results based on 2020 and 2018 calendar income used an experimental methodology based primarily on access to administrative data sources and are aligned to the SILC 2020 methodology as closely as possible.

Experimental methods were used to estimate 2020 calendar income using 2020 SILC respondents and therefore the same sample was used for income reference years 2020 and 2019. Income was estimated by linking SILC 2020 respondents to administrative income data available for calendar year 2020. Due to extended tax return deadlines for the self-employed in Ireland, timely administrative data for self-employed income is not as readily available as other administrative sources. Therefore, a limited amount of administrative data was available for self-employed income in calendar year 2020. As a result, self-employed administrative income data from 2019 was adjusted to forecast self-employed income in 2020 using information based on NACE sectors and farm systems.

Results for 2018 calendar income were based on the sample from . Up until 2019 the SILC income reference period was the 12-month period immediately preceding the sample household's interview date. This resulted in a 24-month income reference period for each annual SILC survey. Changes in EU legislation have resulted in the SILC income reference period now being the previous calendar year. See Information Note on break in time series SILC 2020. Therefore, SILC 2020 is not directly comparable with previous iterations of the survey. In order to provide a comparable time series for SILC, SILC 2019 was linked to administrative income data for calendar year 2018.

This analysis is enabled by the linking of SILC data to administrative data sources by the CSO for statistical purposes using a Protected Identifier Key (PIK), in line with the Statistics Act, 1993 and the CSO Data Protocol.

Main sources of administrative income data

• Revenue PAYE Income
• Revenue Income Tax Form 11 returns
• Revenue Local Property Tax returns
• Revenue Temporary Wage Subsidy Scheme
• Revenue Employer Wage Subsidy Scheme
• Department of Social Protection (DSP) Social Welfare
• Department of Social Protection (DSP) Pandemic Unemployment Payment
• Department of Agriculture, Food and the Marine (DAFM) Basic Payment Scheme data
• Student Universal Support Ireland (SUSI)

Definitions of Income

Gross income 

Income details are collected at both a household and individual level in SILC.  In analysis, each individual’s income is summed up to household level and in turn added to household level income components to calculate gross household income.   

The components of gross household income are: 

• Employment Income
• Other income
• Social Transfers
• COVID-19 income supports

Employment Income 

• Employee income
• Gross employee cash or near cash income
• Gross non-cash employee income
• Employer’s social insurance contributions
• Gross cash benefits from self-employment

Other income 

• Private and occupational pension income
• Pension from individual private plans
• Income from rental of property or land
• Regular inter-household cash transfers received
• Interests, dividends, profit from capital investments in unincorporated business
• Income received by people aged under 16

Social Transfers 

• Jobseekers related payments
• Old-age payments (note that this includes unemployment and survivor benefits paid to those aged 66 and over)
• Family/children related allowances:
• Maternity/paternity/adoptive benefit
• Child benefit
• One-parent family payment
• Carers’ payments
• Housing allowances:
• Rent supplement
• Household benefit package
• Exceptional needs payments
• Rental Accommodation Scheme
• Other Social transfers:
• Survivor's benefits
• Sickness benefits
• Disability benefits
• Education related allowances
• Social exclusion not elsewhere classified

 COVID-19 income supports 

• Pandemic Unemployment Payment
• Temporary Wage Subsidy Scheme
• Employment Wage Subsidy Scheme

Disposable income 

Tax and social insurance contributions are also summed to household level and subtracted from the gross household income to calculate the total disposable household income.  The components of disposable household income are gross household income less: 

• Employer’s social insurance contributions
• Regular inter-household cash transfer paid
• Tax (including USC) on income and social insurance contributions
• Tax deducted at source from individual private pension plans
• Pension contributions
• Local property tax

Equivalence scales 

Equivalence scales are used to calculate the equivalised household size in a household.  Although there are numerous scales, we focus on the national scale in this release.  The national scale attributes a weight of 1 to the first adult, 0.66 to each subsequent adult (aged 14+ living in the household) and 0.33 to each child aged less than 14.  The weights for each household are then summed to calculate the equivalised household size. 

Equivalised disposable household Income 

Disposable household income is divided by the equivalised household size to calculate equivalised disposable income for each person in each household, which essentially is an approximate measure of how much of the income can be attributed to each member of each household. This equivalised income is then applied to each member of the household. 

Data Sources and Linking

Before using personal administrative data for statistical purposes, the CSO removes all identifying personal information including the Personal Public Service Number (PPSN). All data sources are pseudonymised prior to linking. The PPSN is a unique number that enables individuals to access social welfare benefits, personal taxation and other public services in Ireland. The CSO converts the PPSN to a Protected Identifier Key (PIK). The PIK is an encrypted and randomised number used by the CSO to enable linking of records across data sources and over time which is internal to the CSO. Using the PIK enables the CSO to link and analyse data for statistical purposes, while protecting the security and confidentiality of the individual data. All records in the datasets are anonymised and the results are published in the form of statistical aggregates which do not identify any individuals.

Survey on Income and Living Conditions
The Survey on Income and Living Conditions (SILC) is a household survey which collects information on the income and living conditions of different types of households in Ireland, in order to derive indicators on poverty, deprivation and social exclusion. SILC 2019 respondents were used to estimate results, using experimental methods, for income reference year 2018, SILC 2020 respondents were used for Official SILC results for income reference year 2019 and SILC 2020 respondents were used to estimate results, using experimental methods, for income reference year 2020. Demographic characteristics from the SILC surveys were utilised in the analysis including personal characteristics such as age, education attainment etc. and household characteristics such as household composition and tenure status.

Administrative sources of personal and household income were used in the analysis to replicate the Official SILC 2020 (income reference year 2019) income components for the calendar years 2018 and 2020. Where no administrative data source for an income component were available for an individual or household in income reference year 2020, SILC 2020 (income reference period 2019) income data were used. Where no administrative data source for an income component were available in income reference year 2018, SILC 2019 (income reference period 2018-2019) income data were used.

Administrative sources of an income component do not provide as full coverage of the component as SILC survey responses supplemented by administrative. For this reason, results for calendar income year 2020 may have under coverage within income components as no survey data for this income reference year is available to supplement the administrative sources. This is more likely to impact the composition of income in the 1^st decile of the 2020 income distribution.

PAYE Payroll Data
The Revenue Commissioner’s PAYE Modernisation (PMOD) employer-employee payroll returns. PMOD has been operational in the State since 1 January 2019. This data provides information in ‘real-time’ and at payslip level on employee pay, deductions, pension contributions, tax liability, amongst other topics submitted by their employer.

Self-employed Income
The Revenue Commissioner’s Income Tax Form 11 returns. Income Tax Form 11 returns, the annual tax return of persons chargeable under self-assessment mainly self-employed persons, both farm and non-farm self-employed. Where self-employed income is not available self-employed income is trended forward from previous period based upon trends in income by NACE and by Farm System.

Social Transfers
Social transfers to persons and households from the Department of Social Protection’s payments file was utilised to estimate unemployment payments, public pension payments and other social transfer payments to persons.

COVID-19 income supports 

Temporary Wage Subsidy Scheme

Revenue’s Temporary Wage Subsidy Scheme (TWSS) enabled employees, whose employers are affected by the COVID-19 pandemic, to receive supports directly from their employer through the payroll system. The scheme operated in two phases. A transitional phase from 26 March to 3 May and an operational phase from 4 May to 31 August 2020. More detailed information relating to the TWSS can be accessed here: Revenue TWSS Index

Employer Wage Subsidy Scheme

Revenue’s Employment Wage Subsidy Scheme (EWSS) replaced the TWSS and became operational from 1 September 2020. The EWSS is an economy-wide enterprise support that focuses primarily on business eligibility. The scheme provides a flat-rate subsidy to qualifying employers based on the numbers of eligible employees on the employer’s payroll and gross pay to employees. More detailed information relating to the EWSS can be accessed here: Revenue EWSS Index

Pandemic Unemployment Payment

The COVID-19 Pandemic Unemployment Payment is available to employees and the self-employed who have lost their job on or after 13 March due to the COVID-19 pandemic. It is operated by the Department of Social Protection. Information on qualifying criteria, rates of payment and other information can be accessed here: COVID 19 Pandemic Unemployment Payment

Classifications 

Principal Economic Status 

From SILC 2020 onwards the question on Principal Economic Status was standardised under Regulation (EU) 2019/1700.  The categories are: 

• Employed
• Unemployed
• Retired
• Unable to work due to long-standing health problems
• Student, pupil
• Fulfilling domestic tasks

SILC 2020 survey respondents described their principal economic status (PES) when they were surveyed at some point in the first six months of 2020. This period overlapped with the onset of the COVID-19 pandemic, for this reason the principal economic status of individuals may not always seem in line with the types of income received as their status may have changed through the course of the year in which their income relates. For example, it is possible for individuals to have described their status as Employed in the first three months of 2020 and subsequently become unemployed and received Pandemic Unemployment Payments in 2020. Therefore, it is correct that the Employed category has Pandemic Unemployment Payment related income in 2020 as the Unemployed category will have Wage Subsidy Scheme income.

Highest Level of Education Completed 

From SILC 2020, the highest level of education achieved is mapped using the International Standard Classification of Education (ISCED 2011) coding system and categorised as follows: 

ISCED code	Highest Level of Education Classification
000 Less than primary education	Primary or below
100 Primary education
200 Lower secondary education	Lower secondary (including transition year)
300 Upper secondary education (not further specified)	Upper secondary
343 Level completion, without direct access to tertiary education
300 Upper secondary education (not further specified)
344 Level completion, with direct access to tertiary education
300 Upper secondary education (not further specified)
450 Vocational education	Post leaving certificate
400 Post-secondary non-tertiary education (not further specified)
500 Short cycle tertiary	Third level non-degree
600 Bachelor or equivalent	Third level degree or higher
700 Master or equivalent
800 Doctorate or equivalent

Household composition 

For the purposes of deriving household composition, a child was defined as any member of the household aged 17 or under. Households were analysed as a whole, regardless of the number of family units within the household. The categories of household composition are: 

• 1 adult aged 65+
• 1 adult aged <65
• 2 adults at least 1 aged 65+
• 2 adults, both aged <65
• 3 or more adults
• 1 adult, with children aged under 18
• 2 adults with 1-3 children aged under 18
• Other households with children aged under 18

Tenure status 

Tenure status refers to the nature of the accommodation in which the household resides. The status is provided by the respondent during the interview and responses are classified into the following two categories: 

• Owner-occupied
• Rented or rent free (includes Local Authority housing, rent-free lettings or rents agreed at below the market rate)

Urban/rural location 

From 2020 onwards, areas are now classified as Urban or Rural based on the following area populations derived from Census of Population 2016: 

Urban 

• Population >100,000
• Population 50,000 – 99,999
• Population 20,000 – 49,999
• Population 10,000 – 19,999
• Population 5,000 – 9,999
• Population 1,500 – 4,999

Rural 

• Population 199 – 1,499
• Rural areas in counties

Regions 

The regional classifications in this release are based on the NUTS (Nomenclature of Territorial Units) classification used by Eurostat. The NUTS boundaries were amended on 21^st November 2016 under Regulation (EC) No.2066/2016 and took effect from 1^st January 2018. Results are presented at NUTS 2 level.  See Information Note for Data Users: revision to the Irish NUTS 2 and NUTS 3 Regions. 

Indicators 

At risk of poverty rate  

This is the share of persons with an equivalised income below a given percentage (usually 60%) of the national median income.  It is also calculated at 40%, 50% and 70% for comparison.  The rate is calculated by ranking persons by equivalised income from smallest to largest and then extracting the median or middle value.  Anyone with an equivalised income of less than 60% of the median is considered at risk of poverty at a 60% level. 

Deprivation rate 

Households that are excluded and marginalised from consuming goods and services which are considered the norm for other people in society, due to an inability to afford them, are considered to be deprived. The identification of the marginalised or deprived is currently achieved on the basis of a set of eleven basic deprivation indicators: 

1. Two pairs of strong shoes
2. A warm waterproof overcoat
3. Buy new (not second-hand) clothes
4. Eat meal with meat, chicken, fish (or vegetarian equivalent) every second day
5. Have a roast joint or its equivalent once a week
6. Had to go without heating during the last year through lack of money
7. Keep the home adequately warm
8. Buy presents for family or friends at least once a year
9. Replace any worn out furniture
10. Have family or friends for a drink or meal once a month
11. Have a morning, afternoon or evening out in the last fortnight for entertainment

Individuals who experience two or more of the eleven listed items are considered to be experiencing enforced deprivation. This is the basis for calculating the deprivation rate. 

Consistent poverty 

The consistent poverty measure looks at those persons who are defined as being at risk of poverty and experiencing enforced deprivation (experiencing two or more types of deprivation). 

An individual is defined as being in ‘consistent poverty’ if they are 

• Identified as being at risk of poverty and
• Living in a household deprived of two or more of the eleven basic deprivation items listed above 

Comparisons to other outputs

In February 2021 the CSO published a Frontier publication entitled the Impact of COVID-19 on the Debt Sustainability of Irish Households Q3 2020, in which the impact of COVID-19 income supports on household income and debt was estimated for Q2 and Q3 2020. These estimates were based upon the Household Finance and Consumption Survey supplemented with administrative data. The methodology used and the published outputs differ from the content of this Poverty Insights publication in a number of ways outlined below:

1) In the 'Debt Sustainability' publication, income analysis was by Gross Income, whereas the 'Poverty Insights' income analysis is by Disposable Income after tax and social contributions.

2) The ‘Debt Sustainability’ publication examined year-on-year change in gross household income, with and without COVID-19 income supports from Q1, Q2 and Q3 2019 to the relevant quarter in 2020. 'Poverty Insights' examines year-on-year change in total 2019 calendar year disposable income with 2020 calendar year disposable income. In Debt Sustainability ' there were large differences in year-on-year change for each of the 3 quarters especially for income without supports. These quarterly fluctuations would not be evident when using 2020 calendar year income with 2019 calendar year income.

3) In the ‘Poverty Insights’ publication the income evolution of disposable income was analysed by 2019 income deciles, where the mean disposable income of each decile in 2019 was compared with the mean disposable income of the same individuals in 2020, with and without COVID-19 income supports. This is different to the approach taken in the ‘Debt Sustainability’ publication where changes in income by percentiles (e.g. 10^th, 20^th, 30^th, …. 90^th) as calculated for each reference periods. Where, for example, the year-on-year change was calculated from the 20^th percentile in Q2 2019 to the 20^th percentile in Q2 2020.

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