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| Source: CSO |
The average Irish disposable household income increased by 2.2% in 2008 while social welfare and other State benefits accounted for more than 22% of household income, according to the CSO's Survey on Income and Living Conditions 2008. For the 10% of households in the lowest income bracket, State benefits accounted for 88% of the gross household income while they accounted for just seven per cent of income for the 10% of households with the highest earnings. The survey also found that more than 20% of households were in arrears on payments such as bank accounts, mortgages, rent, credit cards and utility bills. Almost eight per cent of households had arrears of two or more types.
Key Findings
Disposable household income increases 2.2% in 2008
Average gross household income was €60,581 per year in 2008, an increase of 1.3% since 2007. When tax and social insurance contributions were deducted, average disposable household income in 2008 was €49,043 per year or €940 per week, an increase of 2.2% from 2007.
A breakdown of income by source showed that social transfers comprised 22.3% of household income in 2008 with the average household level of social transfers increasing by 11% between 2007 and 2008 (from €233.90 per week in 2007 to €258.50 per week in 2008). Direct income made up 77.7% of household income (€902.50 per week), the average direct income had fallen by 1.1% between 2007 and 2008. However the impact of social transfers on income differed significantly across the income distribution. For the 10% of households in the lowest income decile, social transfers comprised 88% of gross household income, this falling to 7% for the 10% of households in the top income decile.
The change in household income for different groups over the year reflected the relative reliance of those groups on social transfers or direct income as their primary source of income, i.e. groups whose primary source of income was social transfers saw relatively larger increases in income, while groups with direct income as their primary source in general saw income levels relatively unchanged between 2007 and 2008. However, those with a greater dependence on social transfers continued to be the households with lower income levels overall.
Households where the head of household was unemployed had an increase of a quarter (25.2%) in their average disposable income. However they continued to have significantly lower income than households where the head of household was at work (€35,208 compared with €60,977) although this gap did narrow between 2007 and 2008.
Older people living alone and people in lone parent households have lowest equivalised income
Equivalisation of income distributes household income to the individuals in the household by adjusting (equivalising) household income to take account of household composition. The equivalised income produced is used to compare income and poverty levels for different groups of individuals.
At an individual level average equivalised disposable income was €24,380 per year or €467.24 per week, an increase of 3.3% over the year. As with household income the greatest increases over the year were recorded for individuals with lower incomes.
By household type people living in lone parent households and people aged 65 or over living alone had the lowest equivalised income at €17,908 and €17,858 respectively. The highest equivalised income was recorded for households with 2 adults aged under 65 with no children (€30,460). The highest increase over the year was recorded for people in lone parent households with an average increase in equivalised income of 22.0% for this group.
Minor improvement in income equality recorded in 2008
The CSO said measures of income equality showed some movement towards a more equal income distribution in 2008. The Gini coefficient fell from 31.7 in 2007 to 30.7 in 2008. The income quintile share ratio fell from 4.9 to 4.6. Both these indicators refer to the distribution of income and lower results indicate more equal distributions.
One fifth of all households report arrears
In 2008 a range of questions on household indebtedness were included in the SILC survey. Households were asked whether they had arrears of a number of different types and the level of arrears of the household.
Overall, 20.3% of households were in arrears on at least one of the types of arrears and 7.7% of households had arrears of two or more types. Clear variation could be seen in the types and levels of arrears reported by households across the income distribution and in looking at poverty rates. Specifically it could be seen that households on lower incomes were more likely to report arrears on mortgage, rent or utility bills while those on higher incomes were more likely to have arrears on credit cards and overdrafts.
More than half of households where people were in consistent poverty (52.6%) reported at least one type of arrears and more than 28% of these households had two or more types of arrears. Over one fifth of households in consistent poverty had mortgage or rent arrears and more than two fifths had utility bill arrears.
By contrast households who were not in consistent poverty were more likely to report credit card arrears (9.4% compared with 4.3% of households in consistent poverty).
One in seven people at risk of poverty in 2008, down from one in six in 2007
Individuals are considered to be at risk of poverty if their equivalised income is less than 60% of median equivalised income. In 2008, 60% of median income was €12,455 and this is known as the at risk of poverty threshold.
In 2008, one in seven or 14.4% of people were at risk of poverty, a decrease of 2.1 percentage points from 2007 and a decrease of 4.1 percentage points from 2005. By age group, children (0-17) continued to have the highest at risk with just under one in five children (18.0%) being at risk of poverty although this had fallen by 1.9 percentage points since 2007. Persons aged 75 and over had the lowest at risk of poverty rate of any age group at 9.9%.
The economic status of people in the household clearly had a strong relationship to the at risk of poverty rates recorded for different groups. Where no person in the household worked the at risk of poverty rate in 2008 was 32.7%, a fall from 44.1% in 2007. Where one person in the household worked the rate was 15.7%, falling to 5.1% where two people worked and 4.2% where 3 or more people worked.
By household type, in line with low equivalised income levels, the at risk of poverty rate was highest among people in lone parent households (36.4%). The next highest rate was recorded for individuals aged under 65 living alone (25.7%). Among other household types the at risk of poverty rate was 16.0% or less with the lowest rate recorded for people living in households with 3 or more adults and no children (8.7%).
Children most likely to experience deprivation
The CSO says deprivation refers to the inability to afford basic goods and services. For national purposes eleven items of enforced deprivation have been identified as being of most relevance in analysing the experience of deprivation in Ireland. Specifically where an individual is at risk of poverty and experiences two or more forms of deprivation they are considered to be in consistent poverty.
One quarter of individuals experienced some form of enforced deprivation in 2008. One in nine people (11.1%) experienced one deprivation item, almost 5% experienced two items and almost 9% experienced three or more items.
As would be expected the experience of deprivation was strongly linked to the level of income of individuals. Those with the lowest income were most likely to experience deprivation with nearly half of individuals in the lowest two income deciles experiencing some form of deprivation and over one quarter experiencing two or more forms of deprivation.
Among people who were at risk of poverty 46.5% had experienced at least one form of deprivation and 17.2% had experienced three or more. However, the deprivation rates reported among people at risk of poverty have been steadily declining in recent years.
Children remained the age group most likely to experience deprivation. Over 30% of children had experienced at least one form of deprivation and 11.1% had experienced three or more forms. By comparison less than 20% of people in the age groups 65-74 and 75 or over had experienced any deprivation.
Consistent poverty rate falls to 4.2% in 2008
The consistent poverty rate represents the proportion of people who are both at risk of poverty and experience two or more of the eleven forms of deprivation. In 2008 4.2% of individuals were in consistent poverty, this was a decrease of 0.9 percentage points since 2007 and 2.8 percentage points since 2005.
Children remain the most exposed age group with a consistent poverty rate of 6.3% compared with a rate of 1.0% among persons aged 75 and over.
Today's report said three quarters of all individuals who were in consistent poverty (75.3%) lived in a household with children whereas this group represented 57.3% of the population. This relative over-representation was driven by lone parent households rather than other households with children. People in lone parent households had a consistent poverty rate of 17.8% in 2008, down from 20.1% in 2007. By household type people in lone parent households made up the largest part of the group of people in consistent poverty at over 29% while they represented only 6.1% of the population as a whole.
Ireland's at risk of poverty rate above EU average in 2007
In 2007, the average at risk of poverty rate for the EU was 16%, with Latvia reporting the highest rate at 21% and Ireland reporting a rate above the EU average at 18%. The Netherlands and the Czech Republic recorded the lowest at risk of poverty rates in the EU in 2007 at 10%.
Table A Summary of main results
|
2005 |
2006 |
2007 |
2008 |
% change |
|
2007-2008 |
| Annual average income |
€ |
€ |
€ |
€ |
% |
| Gross household income (per household) |
51,078 |
55,075 |
59,820 |
60,581 |
+1.3 |
| Disposable household income (per household) |
40,497 |
43,646 |
47,988 |
49,043 |
+2.2 |
| Equivaliseddisposable income (per individual) |
19,768 |
21,229 |
23,610 |
24,380 |
+3.3 |
| At risk of poverty threshold (60% of median income) |
10,057 |
10,566 |
11,890 |
12,455 |
+4.8 |
| Poverty & deprivation rates |
% |
% |
% |
% |
|
| At risk of poverty rate |
18.5 |
17 |
16.5 |
14.4 |
|
| Consistent poverty rate |
7.0 |
6.5 |
5.1 |
4.2 |
|
| |
| Deprivation rate (experienced 2+ deprivation items) |
14.9 |
13.8 |
11.8 |
13.8 |
