Business Personal Finance

Thursday 23 November 2017

Household income fell by a fifth in economic collapse

Picture posed. Thinkstock
Picture posed. Thinkstock

Charlie Weston, Personal Finance Editor

Households have seen their income collapse by almost a fifth during the economic meltdown, according to the latest figures from the Central Statistics Office (CSO).

The figures also reveal a simultaneous rise in the number of people who are now in poverty.

The average household's income was €40,500 in 2012 after paying income taxes and pay related social insurance, meaning the average disposable income has fallen by €8,500 to just €40,500 since 2008. This is a fall of 17.4pc in a four-year period marked by wage cuts, job losses and hikes in income tax and other charges.

Gross income (before tax) of the average household has dived from €60,580 in 2008 to €52,265 in 2012, according to the CSO's Survey on Income and Living Conditions.

The numbers of people in poverty have also increased, according to the study, which is based on interviews with 4,600 households.

Almost a third of us have experienced two or more types of deprivation – defined as being either unable to afford basics like a warm coat, or a meat-based meal every second day – and/or being unable to adequately heat a home.

Minister for Social Protection Joan Burton said that the new figures "reveal the continuing impact of the economic crisis on household income and living standards in 2012".

DEPRIVATION

But she said that the report demonstrated "the critical importance" of social transfers, such as jobseeker payments, child benefit and pensions' adding that these state payments were instrumental in protecting people against poverty.

However, the Unite trade union said the figures showed that 1.2 million people, including 375,000 children, were living in deprivation.

Unite regional secretary Jimmy Kelly said that the figures showed that deprivation rates had more than doubled since 2007.

He said this represented an indictment of the austerity policies pursued since 2009.

Mr Kelly said the figures should spur the Government to change course in the next Budget and to combine an investment-led strategy with a reversal of recent cuts.

Separate research commissioned by a leading credit union representative body shows that 1.7 million households have just €100 left at the end of the month after paying their bills.

But the latest "what's left tracker" from the Irish League of Credit Unions found that 32,000 fewer were left with €100 or less at the end of the month after paying key bills.

The tracker found a slight rise in the net disposable income of households to an average of €2,710 a month.

League chief executive Kieron Brennan said: "Over the past 12 months we have begun to see the first signs of possible economic recovery.

"Since April 2013, the tracker has shown disposable income increasing slightly with each round of research."

He said those struggling to pay their bills on time every month were becoming savvier, shopping around for the best deals or switching providers in an effort to keep costs down.

Irish Independent

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