Friday 21 July 2017

Revealed: Who did the best out of Budget 2017?

Most families gained something from the Budget, but unemployed people did best with gains of up to 2pc of income, according to a new report from the ESRI. Photo: Provision
Most families gained something from the Budget, but unemployed people did best with gains of up to 2pc of income, according to a new report from the ESRI. Photo: Provision
Donal O'Donovan

Donal O'Donovan

The poorest households in the State did best out of Budget 2017, especially when rent control measure and scrapping of water charges this year are factored in.

Most families gained something from the Budget, but unemployed people did best with gains of up to 2pc of income, according to a new report from the ESRI.

Gains for other households including those where one or two parents work or are headed by retired people are far lower - in many cases less than 0.5pc, and typically close to 0.25pc.

The ESRI's 'Distributional Impact of Tax and Welfare Policies: Budget 2017' report shows the overall impact of the Budget was relatively small, but the highest gains went to those in the bottom 10pc of households where a €5 rise in social welfare rates is a big factor.

The findings will be welcomed by anti-poverty campaigners who have favoured more progressive budgets that take least from those who can least afford it.

However, the data shows a household where one or more people are in work fared less well in the Budget, which is likely to support claims that a so-called squeezed middle, the working poor in particular, have been left behind in Budget 2017.

Older people did least well of all, the ESRI research shows, with a gain of just 0.1pc in the Budget, and a retired couple are actually left marginally worse off when other factors this year are also taken into account.

Factors

Single-earner couples with children will also be left slightly less well off on a year-on-year basis, despite a slight gain in the Budget, research shows.

As well as direct Budget measures, other factors looked at by the ESRI include the suspension of the water charges from end-March 2016, and the increase in the maximum rent limits for the Rent Supplement Scheme in July this year.

Both have a bigger effect on lower income households. However, the research did not factor in the impact of initiatives such as the Help to Buy scheme for first-time house-buyers. It's likely to benefit younger, relatively higher income households most, but is not factored into the calculations.

Overall, researchers at the ESRI said Budget 2017 left no family type worse off. In every case, household incomes either increased modestly or remained stable.

The largest gains, at about 2pc of income, are for non-earning couples and non-earning lone parents, a relatively small portion of the total population. More modest gains in income of less than 0.5pc are most common.

Irish Independent

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