October 08th, 2001: CORI Justice Commission comments on the Report of Social Welfare Benchmarking and Indexation Working Group

The CORI Justice Commission has commented on the Report of the Social Welfare Benchmarking and Indexation Working Group. The main points made by the Commission were:

• The CORI Justice Commission warmly welcomes the recommendation of the Working Group that the lowest social welfare rates should be benchmarked.
• The Commission also welcomes the recommendations that
  • this benchmark should be index-linked to society's standard of living as it grows and that
  • the benchmark should be reached by a definite date.

These recommendations mark "a major breakthrough in the struggle to tackle poverty and social exclusion in Ireland".

These recommendations were made by a majority of the Social Welfare Benchmarking and Indexation Working Group established as part of the Programme for Prosperity and Fairness (PPF).

The working group's final report has just been submitted to Government and awaits Government decision in the context of the forthcoming Budget and the review of the National Anti-Poverty Strategy (NAPS) which is due to conclude next month.

CORI Justice Commission strongly urges Government to accept the recommendation to establish a benchmark for the lowest social welfare payments that would be reached by 2007.

The Commission also strongly recommends that Government set the benchmark at 30% of Gross Average Industrial Earnings. To do this would have a dramatic impact on reducing income poverty in Ireland and would go a long way towards removing the most fundamental cause of social exclusion.

The index to underpin social welfare payments that the working group chose was Gross Average Industrial Earnings (GAIE).

A majority of the working group agreed that the benchmark for social welfare payments by 2007 should be 27% of GAIE. In 2001 terms this would mean that the lowest social welfare payment (currently at £84 a week) should be £101.

The Community and Voluntary Pillar and the Trade Union Pillar of Social Partners both argued, and continue to argue, that the benchmark should be set at 30% of GAIE. In 2001 terms this would bring the lowest payment for a single person to £117 a week.

The working group also agreed that the benchmark be reviewed every two years and within that process it was accepted that the proposal to set the benchmark at 30% of GAIE could be revisited.

All members of the working group agreed that basic child income support (i.e. Child Benefit and Child Dependant Allowances combined) should be set at 33-35% of the minimum adult payment rate. The C+V Pillar representatives offered qualified support to this position, citing concerns that the minimum adult rate must be set at an adequate level if the proposal is to be meaningful, and pointing to the need for renewed research on the costs of rearing children in order to inform the development of policy in this area.

If the lowest social welfare payments were benchmarked at 27% of GAIE this would mean that by 2007 the basic child income support would be in the range of £47 to £50 per week.

If the recommendations were implemented it would mean that the lowest social welfare payment would rise dramatically. It would also mean that the proposed benchmark for the lowest social welfare payments would be reached within a definite timeframe, and social welfare payments would continue to rise in line with the improving standard of living in the wider society." The only previous benchmark was the Commission on Social Welfare's target that was linked to a specific amount of money and was up-rated only by inflation.

The CORI Justice Commission believes that Government should decide that the benchmark to be reached in 2007 would be 30% of GAIE. This would have a dramatic impact and mark real progress.

The majority of the working group who agreed to the recommendations included the Department of Social, Family and Community Affairs, the Community and Voluntary Pillar, the Trade Union Pillar and the Farming Pillar ( i.e. three of the four pillars of social partners).

The minority who dissented was the Department of Finance, the Department of Enterprise, Trade and Employment and IBEC (representing the employers' pillar of social partners).

This working group was established as part of implementing the Programme for Prosperity and Fairness. Its report is available from the Department of Social, Community and Family Affairs. It can be accessed on the web at: http://www.dscfa.ie/dept/reports/index.htm

Main recommendations of the PPF Benchmarking and Indexation Working Group

• There should be a benchmark for the lowest social welfare payment.
• This benchmark should be based on an independent index linked in some way to the standard of living that grows over time.
• The benchmark should be reached by a definite date-the Budget for 2007.
• The benchmark recommended by the majority was 27% of Gross Average Industrial Earnings. This would be the equivalent of £101 for a single person in 2001.
• The working group accepted that the recommendation of the C+V Pillar and the Trade Union Pillar that the benchmark should be 30% could be looked at in the context of the review of the benchmark. This 30% benchmark would bring the lowest rate up to £117 for a single person in 2001 terms.
• The appropriate equivalence level of basic child income support (i.e. Child Benefit and Child Dependant Allowances combined) should be set at 33-35% of the minimum adult social welfare payment rate.
• There should be a regular and formal review and monitoring of the benchmark to ensure, among other things, that it is having an impact on poverty.
• The Report of the PPF Social Welfare Benchmarking and Indexation Working Group can be accessed at: http://www.dscfa.ie/dept/reports/index.htm