The Government has been warned it will be abandoning Ireland’s poorest people if it fails to increase welfare rates by at least €34 over the next two budgets.
Social Justice Ireland (SJI) said welfare payment rates are already well short of where they ought to be, under the standard previously set to benchmark them against wages.
The think-tank said welfare rates should be increased by €20 this year, and by at least €14 next year, to protect families of low incomes from experiencing poverty.
SJI chief executive Dr Seán Healy said the Government must use Tuesday’s Budget to eliminate this threat.
And he said SJI’s proposed €14 increase for next year may need to be revised upwards if inflation continues on its current path — but a minimum €34 increase over two years is essential, as people on lower incomes spend a higher portion of funds on basic essentials.
“If we don’t get an increase of €20 per week this year, it shows Ireland is absolutely abandoning its poorest people,” he told the Sunday Independent.
“Poorer people spend a greater proportion of their income on essentials, compared to better-off households. They are more exposed to price increases. They also spend a greater proportion of their income on food and energy.
“Increasing core social welfare rates is a key policy tool for Government to support these households.
“The standard of living that social-welfare payments can provide is dramatically reduced when the cost of living rises.”
The Consumer Price Index compiled by the Central Statistics Office shows annual inflation hit 8.7pc last month — but in real terms it is likely to be much higher among poorer households with less disposable income, who typically spend a greater portion of their money on food and energy.
Food price inflation hit 9.2pc in the past 12 months. Meanwhile, gas and electricity prices increased 56pc and 38pc respectively.
Dr Healy said the welfare increases would need to benefit the unemployed, anyone with a long-term illness or disability, and people living alone, and single parents.
It had been suggested some welfare payments could see a €10 top-up in Tuesday’s Budget announcement.
But Dr Healy said such a figure would not match wage growth seen over the past 15 years.
A standard was set in 2007 which benchmarked social-welfare rates to 27.5pc of average weekly earnings.
“The Government should go back to that target now over a two-year period,” Dr Healy said.
“Given the level of inflation this year, given there was no increase to core welfare rates in two of the last three years — and in the third year, last year, it was only an increase of €5, which was nowhere near matching inflation — it’s important to have front loading.
“We think there needs to be a €20 increase this year, and €14 next year — but that may need to be higher, depending on how the next 12 months pan out.”
He said one-off payments and measures that are not specifically targeted at families dependent on fixed incomes and welfare payments would do little to protect against rising poverty this winter.
“There needs to be a targeted way of doing it, to put money into the pockets of the poorest and help them go some way towards dealing with the sudden rise in the cost of living.
“Many are in a position where they will have to choose between eating food or heating the house.
“The sheer scale of the numbers of people living in poverty in Ireland is worrying. We have more than 580,000 people living in poverty, of which around 164,000 are children.
“That is a disgrace in a country with Ireland’s income levels.
“We are one of the wealthier nations in the world. There is no reason why we should not eliminate poverty in Ireland.”