The GAP between the rich and poor continues to grow, according to a report published yesterday by the Economic and Social Research Institute.
The study shows that the proportion of people living below the poverty line of half the average income rose between 1994 and 1998, while the depth of poverty experienced intensified.
But while the report highlights widening relative income gaps, it also shows a marked decline in people experiencing basic deprivation.
The number of "consistently poor" households, defined as those with people living on below 60 per cent of average income and lacking certain basic necessities such as heating, electricity or a substantial meal, fell from 15 per cent in 1994 to 8 per cent in 1998.
One of the report's authors, Dr Richard Layte, said it found that fewer people were deprived, "but the inequalities in income are getting larger".
"What would be best is that as well as deprivation going down, inequality would remain the same or decrease. You really don't want to have the two things going in different directions with society in general getting better off, but the people at the bottom of income distribution getting further and further away from the top."
The report, Monitoring Poverty Trends and Exploring Poverty Dynamics in Ireland, charts trends between 1994 and 1998 when unemployment fell sharply and average household incomes rose rapidly.
Prices rose slowly and social welfare rates rose by more than prices, but less rapidly than other incomes. As a result, the numbers depending on social welfare fell, but the remaining social welfare recipients fell further behind the average.
One in five people was living on below half the average income in 1998, compared to 17.4 per cent in 1994, according to the report. The percentage of households living on below half average income also rose during this period, from 18.6 per cent in 1994 to 24.6 per cent in 1998.
The report also shows that those living in such relative poverty fell 50 per cent further below the half average income poverty line in 1998 than in 1994.
Households headed by the disabled or unemployed were more likely to live on below half average income than those headed by retired people or those in work.
The proportion of people aged 65 or over living below the half average income relative poverty line increased from one in 10 in 1994 to more than three in 10 in 1998.
While 8 per cent of households are in consistent poverty, the report shows this rises to about three in 10 for households headed by unemployed, ill or disabled people.
The report says the Government's key challenge in setting and monitoring future poverty targets is to "capture the reality of rising living standards and falling deprivation, but also to take into account the long-term consequences of lower incomes, and social security rates in particular, lagging behind the average".
Ms Helen Johnston, the incoming director of the Government-advisory body, the Combat Poverty Agency, said the widening income inequalities shown in the report were of concern.
"If something isn't done about that by redistributing income and improving the provision of public services, then if the economic boom was to slow down or crash we'd be back to square one or worse."
Ms Johnston said it would be useful for the Government to set targets in this year's revised National Anti-Poverty Strategy to reduce income inequality as well as consistent poverty. The 10-year strategy was launched in 1997 and is due to be revised in November.