Enduring cost-of-living pressures have forced most low-income households to make high-risk decisions to change how they live, with many going into arrears on loans, borrowing more or depleting savings, research shows.
The Economic and Social Research Institute’s (ESRI) behavioural research unit found that the decisions people felt they had to take to make ends meet had long-term effects on their lives, including on mental wellbeing.
Young children were more likely to suffer higher stress levels as a result of these actions, researchers found.
The ESRI study’s findings also revealed that a significant percentage of people on low incomes were unable to navigate the State’s supports system.
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Research was carried out among more than 1,600 low-income households. It found that while almost all who took part had reduced their spending on essentials such as food, clothes or energy, most also had to take further steps such as getting into arrears, borrowing more or using savings they had.
There was little evidence that high-risk changes were linked to individual psychological traits. Instead, these changes were predicted by life circumstances such as pre-existing financial difficulties.
A significant finding was that vulnerable households did not obtain all available state benefits during the cost-of-living crisis.
Only half of people on very low incomes had a medical or GP visit card, which make some health services free for qualifying individuals. The study also found that less than half of renters availed of the rent tax credit, rent supplement or housing assistance payment.
Just over a third of households used support services such as St Vincent de Paul, the Money Advice & Budgeting service or Citizens Information.
Asked why they had not obtained relevant benefits, many said they were unaware of what they could avail of or did not know what the application process involved.
The additional needs payment, carer’s benefit, energy hardship fund and one-parent family benefit were reported to be time-consuming and frustrating to access. Households reporting the greatest difficulty accessing benefits were those on very low incomes and those regularly unable to afford essentials.
Benefits that are not means-tested, like child benefit, were found to be least burdensome.
“These financial changes that households had to make are likely to have a lasting negative impact,” Dr Diarmaid Ó Ceallaigh, the report’s co-lead author, said. “The most deprived households and those with children would especially benefit from assistance beyond recent temporary measures.”
Co-lead author Dr Lucie Martin said the “complexity of the welfare system may have blunted its effectiveness during the crisis”.
“Simplifying the welfare system, for example through a single point of application or benefit calculators, might reduce the time, effort and frustration involved, helping more vulnerable households to get the support they need,” she said.
