Poverty Insights - Income Reference Periods 2018 to 2020

SILC data 2020 to 2022 was revised on 07 March 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, which reflect revised population benchmarks from Census revisions, please see SILC 2023 or SILC PxStat. Results from this publication ‘Poverty Insights - Income Reference Periods 2018 to 2020’ were updated at 11am on 09/06/2022 due to changes made in SILC 2020 results. In SILC, weights are applied to the data to ensure the results are reflective of the population as a whole. The survey weights for 2020 SILC results have been adjusted to better reflect the estimated household distribution within the rental sector. While this has not impacted the overall at risk of poverty rate (unchanged at 13.2%) for income reference year 2019, it has resulted in a reduction in the at risk of poverty rate (12.8% compared with 13.2%) for income reference year 2020.  Please see Revision Information Note  which compares published and revised main results.

The at risk of poverty rate was 12.8% for calendar year income 2020, 13.2% for 2019, while for 2018 it was 13.4%. See table 2.1 & figure 2 .1.

Equivalisation is a method of attributing household income to individual household members. An individual is defined as being at risk of poverty if their equivalised disposable income is under the at risk of poverty threshold, i.e. 60% of the median equivalised disposable income. See At Risk of Poverty Indicators Explained (PDF 717KB)  

The consistent poverty measure is defined as people who are both at risk of poverty and experiencing enforced deprivation (experienced two or more of the eleven types of deprivation). The consistent poverty rate for the income reference year 2020 was 3.9%, compared to 4.7% in 2019 and 5.3% in 2018. See table 2.1 & figure 2.1.

This section uses experimental methods to analyse the impact COVID-19 income supports have had on poverty rates and income in the 2020 calendar income reference year for 2020 SILC respondents.

We first show at risk of poverty rates, both With and Without selected COVID-19 income supports, including the Pandemic Unemployment Payment (PUP), the Temporary Wage Subsidy Scheme (TWSS) and the Employment Wage Subsidy Scheme (EWSS), by the characteristics of the household and household reference person. This is followed by a breakdown of income into its components by decile and the year-on-year income changes across equivalised and household income deciles.

It must be noted 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. Thus, caution is advised when interpreting these results.

Analysis of the impact of COVID-19 income supports on poverty rates shows that Without these supports the at risk of poverty rate would have been 21.0%, over 8 percentage points higher than the 12.8% rate With supports.  Without the Pandemic Unemployment Payment (PUP), but including WSS, the at risk of poverty rate have would have been 16.8% and Without the Wage Subsidy Schemes (WSS), but including PUP, the rate would have been 15.7%. See table 2.4 & figure 2.5.  

The pandemic and the resulting COVID-19 supports impacted people and households differently across Irish society. Figure 2.6 illustrates how the COVID-19 income supports impacted the at risk of poverty rate in the various age groups. It is evident that younger age groups were more impacted by COVID-19 income supports than older groups in 2020. Those Aged 0-17 were the most effected as their risk of poverty would have been 25.3% Without supports, almost 11 percentage points higher than the rate of 14.4% With supports included.

Those Aged 18-34 were the next most supported age group, as the risk of poverty rate Without supports would have been 22.1%, almost 11 percentage points higher than the rate of 11.3% With supports included.

Those Aged 65 and over were least affected by COVID-19 income supports with their at risk of poverty rate decreasing from 11.8% Without supports to 11.3% With supports. 

With supports, the 50-64 age group was most likely to be at risk of poverty (15.8%), followed by children Aged 0-17 (14.4%). Without supports children Aged 0-17 would have been most likely to be at risk of poverty, with over one in four (25.3%) being at risk. See table 2.4 & figure 2.6.

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 economic status of individuals 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 in the first three months of 2020 and subsequently become unemployed and have received Pandemic Unemployment Payments in 2020. Also, as income is equivalised, income received from other household members is attributed to all members of the household irrespective of their PES. So, for example, a Student / pupil may have been allocated equivalised income from PUP but have not claimed the payment themselves. Their parent or another person in the same household may have received Pandemic Unemployment Payments, which is then, through equivalisation, allocated to all members of the household.

The at risk of poverty rate Without supports, for those who described their principal economic status as Employed, was more than double the rate With supports (15.6% compared with 6.5%). For those that described their principal economic status as Student, pupil the Without support rate was 26.5%, over 11 percentage points higher than the With support rate of 15.4%.

A further analysis by socio-demographic characteristics showed that those most at risk of poverty in 2020 calendar year were those individuals who were Unable to work due to long-standing health problems, with a rate, With supports, of 34.0%, followed by individuals who were Unemployed (33.5%). Without COVID-19 income supports those who were Unemployed would have been most at risk of poverty with a rate of 43.3%, an increase of 9.8 percentage points.

The PUP 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. The groups next most impacted by PUP were Students or pupils and Employed whose risk of poverty rates reduced by 5.7 and 4.3 percentage points respectively.

The WSS had the largest impact on reducing the likelihood of being at risk of poverty for Students or pupils, reducing their rate by 3.7 percentage points. The groups next most impacted by WSS were Unemployed and Employed whose risk of poverty rates reduced by 3.3 percentage points. See table 2.4 & figure 2.7.

Without supports Single adult households with one or more children had an at risk of poverty rate in 2020 of 36.0%. When supports are included their rate falls over 11 percentage points to 24.4%. With supports Single adult households under 65 years without children are most at risk of poverty with a rate of 32.2%.

Those individuals with a highest level of education of Lower secondary are most at risk of poverty in 2020 Without supports (rate of 26.3%) while those with No formal or primary education are most at risk of poverty in With supports (rate of 19.4%). COVID-19 income supports reduce the at risk of poverty rate of those with a highest level of education of Higher secondary or Post leaving certificate, reducing them by 9.7 percentage points when supports were included. See table 2.4.

Figure 2.8 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 below. All individuals are split into 10 groups (deciles) based upon their income, with the 10% of individuals with the lowest net equivalised income in the 1^st decile and the 10% of individuals with the highest net equivalised income in the 10^th decile.

In 2020 Social transfers excluding PUP accounted for 69.6% of net equivalised disposable income for those in the 1^st decile and Employment income excluding WSS accounted for 18.0% of income in this decile. As you move up the deciles the proportion of income from social transfers decreases, with 4.5% of net equivalised disposable income coming from this source in the 10^th decile. Employment income accounts for a greater proportion of net equivalised disposable income as you move up the income distribution, up to the 9^th decile, where it accounted for 79.8% of income. In the 10^th decile the Employment income proportion fell to 77.7%, while other income increased to 16.0%, up from 9.2% in the 9^th decile and 1.6% in the 2^nd decile. 

COVID-19 income supports accounted for between 8.1% and 14.0% of total net equivalised disposable income in each decile from the 1^st to the 7^th decile. From the 7^th decile and up the proportion of income accounted for by COVID-19 supports decreased, with just 1.8% of income coming from this source in the 10^th decile.

The PUP accounted for between 0.7% (10^th decile) and 7.9% (5^th decile) of net equivalised disposable income across the distribution. The WSS accounted for between 1.1% (10^th decile) and 6.7% (4^th decile) of income across the distribution. See table 2.5 & figure 2.8.

Looking at the mean equivalised value of COVID-19 income supports by net equivalised disposable income deciles, figure 2.9 shows that those in the 5^th decile had the highest average COVID-19 support payments with an average payment of €3,028 in 2020, followed by the 6^th (€2,785) and 4^th (€2,739) deciles. The 1^st decile received the lowest amount in COVID-19 income supports with an average of €1,070. This is followed by 10^th decile which received an average of €1,178 in COVID-19 supports. Deciles 4 to 7 all received an average payment of greater than €2,700 in income reference year 2020.

The 5^th decile received the largest average amount from PUP (€1,855) while those in the 7^th decile received the most from WSS (€1,592). Those individuals in the 10^th decile received the least PUP amount (€470) while the 1^st decile had the lowest average WSS amount of €305. See table 2.5 & figure 2.9.

Figure 2.10 looks at the breakdown of income components by decile for net household disposable income. The average household size in each decile increases as you move up the income distribution as households with more people tend to have greater income. For households in the 1^st decile almost 90% of household disposable income was received through social transfers excluding PUP, while employment income excluding WSS accounted for 5.8% of income. Moving up through the deciles the proportion of income from social transfers decreases, with households in decile 10 receiving 4.7% of their income from this source. Employment income accounts for a greater proportion of net household disposable income as you move up the income distribution up to the 9^th and 10^th deciles where it accounted for 78.4% of household income. In the 10^th decile other income (which includes occupational pensions, rental income dividends etc.) accounted for 13.1% of household income, up from 13.1% in the 4^th decile and 2.4% in the 1^st decile.

COVID-19 income supports accounted for a similar proportion (between 7.4% and 11.5%) of total net household disposable income in each decile from the 3^rd to the 9^th decile. The 1^st decile had the smallest proportion of income accounted for by supports with just 2.1% of income coming from this source followed by the 10^th decile with 3.8%.

The PUP accounted for between 1.8% (1^st decile) and 6.3% (6^th decile) of net disposable household income across the distribution. The WSS accounted for between 0.3% (1^st decile) and 5.2% (6^th decile) of household income across the distribution. See table 2.6 & figure 2.10.

During 2020, households in the first household disposable income decile received on average just over €200 in COVID-19 income supports compared to almost €5,500 by those households in the top decile. Households in the 9^th decile received the highest amount of COVID-19 income support with an average payment of €6,427 in 2020 while households in the 1^st decile received the lowest amount in COVID-19 income supports with an average of €226. 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 €3,500 in COVID-19 income supports.

The 6^th decile received the largest amount from PUP while the 9^th decile received the most from WSS. The 1^st decile received the least average amount in both PUP and WSS. See table 2.6 & figure 2.11.

Individuals were divided into ten equal sized groups (deciles) based on their 2019 net equivalised disposable income, with the lowest 10% in the first decile and the top 10% in the 10^th decile. The mean equivalised disposable income in each decile in 2019 was compared with the mean equivalised disposable income of the same individuals in 2020, With and Without COVID-19 income supports. This is illustrated in figure 2.12, the orange line shows the change in income Without COVID-19 income supports, the blue line With supports.

Individuals in the 1^st 2019 decile had the largest annual income growth in net equivalised disposable income including COVID-19 income supports where income increased by 20.0% in the year, Without supports the annual growth would have been 3.2%. Thus, COVID-19 income supports increased annual growth by 16.8 percentage points for individuals in the 1^st 2019 decile, representing the largest gap between With and Without supports income growth of the ten deciles. Those individuals in all other 2019 deciles from decile 2 to decile 10 would have seen a fall in their equivalised disposable income between 2019 and 2020 Without COVID-19 income supports. When supports are included average income increased year-on-year in all deciles, apart from the 9^th and 10^th deciles. Equivalised income of individuals in the 10^th decile fell by 7.3% With COVID-19 income supports from 2019 to 2020, and would have fallen by 9.2% Without COVID-19 income supports. This gap of 1.9 percentage points represents the smallest gap between the With and Without supports income growth of the ten deciles.

The gap between the orange and blue lines (those With and Without supports respectively), in figure 2.12 below, illustrates the scale of the mitigating effects of the COVID-19 income supports and the relative effect they had across the distribution. Those in the lower half of the income distribution (first five decile groups) benefited most from the supports, relative to their pre-COVID-19 income. The relative benefits from COVID-19 income supports diminish from the 6^th decile to the 10^th decile, as the gap between the With and Without supports lines reduce and converge.

Individuals with higher equivalised income in 2019 benefited from COVID-19 supports as well as those with lower incomes. For example, in the top half of the distribution, the gap between equivalised income growth With and Without supports ranged from 1.9 (10^th decile) to 9.4 (6^th decile) percentage points. The gap in the bottom half of the distribution was between 10.5 (2^nd decile) and 16.8 (1^st decile) percentage points. See table 2.7 & figure 2.12.

The year-on-year change in net disposable household income would have fallen in all 2019 deciles, apart from the 1^st decile in the year to 2020 Without Supports.  When supports are included average income increased year-on-year in all deciles, apart from the 10^th decile, as illustrated in figure 2.13.

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 2.12. The gap between the year-on-year change in household income With supports (blue line) and Without supports (orange line) was relatively consistent between the 2^nd and 8^th deciles, where the gap ranged between 8.0 and 10.7 percentage points. Households in the 1^st decile had the smallest gap between the annual income growth, With and Without supports, with a 3.5 percentage point gap. Households in the 10^th and 9^th deciles were next least impacted by the COVID-19 income supports with a gap between their annual income growth, With and Without support, of 4.3 and 6.5 percentage points respectively.