THE GOVERNMENT should give greater priority to increasing welfare payments for the unemployed and lone parents rather than pensioners to reduce the number of people at risk of poverty, according to a report by the ESRI.
In a report published today, the institute suggests introducing a uniform payment of up to €230 per week for all welfare recipients.
This would "close the gap" between relatively generous pension payments and forms of welfare such as unemployment benefit and the lone parents' allowance.
It suggests that the package - which could cost up to €1.8 billion - could be financed mainly by reducing the amount of tax relief available for contributions to private pensions.
It says the proposed welfare increases could halve the number of people at risk of poverty in high-risk groups, such as the disabled and unemployed, from 40 per cent to close to 20 per cent.
The findings are in a new report by the ESRI, Tackling Low Income and Deprivation: Developing effective Policies, which draws on the experience of other countries in tackling poverty.
Tim Callan of the ESRI said the report was not a set of policy prescriptions for dealing with the current economic difficulties. Instead, it was a longer-term policy exploring what might be achievable in 10 to 12 years.
The report notes that the Government has pledged to increase the pension to €300 per week by 2012, while there will be more modest targets for welfare payment rates for other groups such as persons with a disability, lone parents and the unemployed.
Analysis by the ESRI suggests that a policy that would give greater priority to payment rates to groups currently at the highest risk of poverty could yield much greater reductions in poverty.
Such a policy would only reach its poverty-reduction potential if it is complemented by further "welfare-to-work" measures for unemployed persons, lone parents and people with a disabilities.
The report also shows that countries with the best record on the reduction of child poverty also tend to have the lowest rates of overall poverty. This suggests there are benefits from focusing on policy developments in countries in Scandinavia rather than policy developments in English-speaking countries, where rates of child poverty tend to be higher.
The report also notes that while there has been a rapid fall in the Irish unemployment rate, there has been a marked growth in the numbers of "working poor".
On the issue of paying for welfare increases, one option it suggests is standardising tax reliefs for superannuation contributions. It estimates that net revenue from standardisation would be €1.5 billion. Standard rate taxpayers would be unaffected by the change, although top-rate taxpayers would see their tax liabilities rise. Reacting to the report, Age Action Ireland warned that the reduction in the number of older people at risk of poverty should not be a reason to switch the focus away from the sector.
