Poverty Insights - Income Reference Periods 2018 to 2020

Government restrictions to prevent the spread of the COVID-19 virus, meant that large sections of the Irish economy were closed in 2020, necessitating the introduction of substantial State supports for workers and employers. The impact of these restrictions and subsequent supports on poverty rates and the income of individuals and households is key in understanding how Irish society has fared in 2020 compared to previous years.

This new report, ‘Poverty Insights - Income Reference Periods 2018 to 2020’, is a Frontier Series Publication from the Central Statistics Office (CSO). It provides insight into how poverty rates and income have evolved from 2018 to 2020 and analyses how the COVID-19 crisis has impacted these statistics. As this is a Frontier publication using experimental methods care must be taken when interpreting the statistics in this release. What is this?

Due to changes in EU legislation the Survey on Income and Living Conditions (SILC) 2020 is not directly comparable to previous iterations of the survey, see Information Note. By combining Official SILC 2020 statistics, based upon 2019 calendar year income, with experimental estimates of 2018 and 2020 calendar year income this publication provides insights on poverty indicators and income of individuals and households in Ireland between the income reference years 2018 to 2020. The experimental methods estimate 2018 calendar year income for 2019 SILC respondents and 2020 calendar year income for 2020 SILC respondents. The use of 2020 calendar year income also facilitated an analysis of COVID-19 income supports and the impact supports such as the Pandemic Unemployment Payment (PUP), Temporary Wage Subsidy Scheme (TWSS) and the Employment Wage Subsidy Scheme (EWSS) had on poverty rates and income.

Poverty Rates & Income 2018-2020

• For 2020 calendar year income, the at risk of poverty rate was 12.8%, compared to a rate of 13.2% for 2019 calendar year income.
• Without COVID-19 income supports the at risk of poverty rate would have been almost 21%, more than eight percentage points higher.
• Median household disposable income for calendar year 2020 was €44,549, compared with €43,915 in 2019 and €42,402 in 2018.
• Individuals who were Employed were least at risk of poverty in all three income reference years, where 6.5% were at risk of poverty for income reference year 2020, compared to 6.5% in 2019 and 6.6% in 2018.

Impact of COVID-19 Income Supports

• For income reference year 2020, the risk of poverty for those Aged 0-17 was 25.3% Without COVID-19 income supports compared with a With supports rate 14.4%.
• Those Aged 65 and over were least affected by COVID-19 income supports, where the at risk of poverty rate would have been 11.8% Without supports and was 11.3% With supports.
• The at risk of poverty rate for individuals that described their principal economic status as Employed more than doubled from 6.5% to 15.6% when COVID-19 income supports were not included for income reference year 2020.
• The Pandemic Unemployment Payment had the largest impact on reducing the likelihood of being at risk of poverty for Unemployed individuals, reducing their rate by 6.1 percentage points from 39.6% to 33.5%.
• Without COVID-19 income supports Single adult households aged under 65 years were the most likely to be at risk of poverty in 2020 with a rate of 37.2%. When supports are included their rate falls over 5 percentage points to 32.2%.
• Individuals in the highest equivalised disposable income decile received the least Pandemic Unemployment Payment average amount, while those in the lowest decile had the lowest annual average Wage Subsidy Schemes amount.
• Just over 11% of the income for households in the 6^th household disposable income decile came from COVID-19 income supports, compared with 2% of income of those in the 1^st decile and 3.8% of income for those in the top decile.
• Looking at the change in net disposable equivalised income by 2019 deciles from 2019 to 2020, average annual equivalised income increased by 20% for those in the first decile, without supports the annual growth would have been 3.2%.