The 2015 Minimum Essential Standard of Living data is now available.
The annual update paper compiling the key findings, and detailing the MESL expenditure need for a range of representative hosuehold types is online. It includes expenditure & income scenarios for Social Welfare dependent households, National Minimum Wage scenarios and calculates the Minimum Income Standard for multiple household compositions.
Minimum Essential Standard of Living core weekly expenditure budgets are available for a range of Urban & Rural household types. Income Scenarios for representative household types in Urban & Rural areas are also online.
The paper demonstrates situations of low hour (up to 20 hours) minimum wage employment, and the effects both on direct salary income and entitlement to additional social welfare supports. The analysis focuses on the income consequences of low hours; how the structure of the social welfare system supports and number of hours and days worked impacts overall household income, and places this in the context of the cost of an MESL and household income adequacy.
The paper focuses on minimum wage employment, as those in minimum wage employment are more likely to be working less than full-time hours and classified as part-time, and twice as likely to be in low hour employment as employees generally.
Two household types are examined: a Single Adult of working age, and a One Parent & One Child household.
This research note evaluates the latest CSO SILC data in the context of the VPSJ’s MESL research. The latest SILC data shows that there are over ¾ of a million people ‘at risk of poverty’ and over 1.3 million people experiencing deprivation in Ireland. The MESL data on the cost of an minimum essential standard of living provides a counterpoint to the SILC data, and the space to ask what ‘at risk of poverty’ means in the context of an MESL.
The trend in incomes, deprivation and the cost of an MESL over recent years, suggest that the numbers forgoing essentials and living below an MESL is likely to be notably above the official ‘at risk of poverty’ rate.
The comparison finds that the ‘at risk of poverty threshold’ tends to fall below what is needed for an MESL. This suggests that there is a cohort of household types which are not recognised as ‘at risk of poverty’ but are in fact living below a Minimum Essential Standard of Living.
This paper demonstrates the variation in rents payable by local authority tenants paying a differential rent in the four Dublin local authorities, and the impact that this has on the cost of a Minimum Essential Standard of Living for four household types in two different income scenarios.
In Ireland, local authority accommodation operates on a differential rent system. Under the differential rent scheme rent paid is directly related to household income. Each local authority operates its own rental scheme and there is not a standard method for calculating rents across local authorities throughout the State. Therefore, identical household types with the same income may pay different amounts in rent depending on the criteria stipulated by the local authority where they reside. This paper analyses the current model and the differential rent systems that are operational in the four local authorities in Dublin.
The paper underscores the lack of horizontal equity in the differential rent system and the need for a new rents framework that will significantly harmonize rents across local authorities throughout the state.
The VPSJ has prepared its annual Budget Impact Briefing in response to the details of Budget 2016.
This briefing analyses the impact of the Budget in the context of the Minimum Essential Standards research, examining the current position of a set of household types in 2015, and what the situation will be in 2016.
The Impact Briefing calculates the forecast cost of a Minimum Essential Standard of Living for 2016, and examines the impact of the new measures on income adequacy for a set of household types when dependent on social welfare and in employment scenarios.
The VPSJ welcomes the publication of the 2015 Living Wage rate of €11.50 per hour. This is the average gross salary required by full-time employed adult (without dependents) to afford a socially acceptable minimum standard of living across Ireland.
Through its budget standards research the VPSJ recognises the inadequacy of the National Minimum Wage for many household types. Earnings below the Living Wage do not allow for a Minimum Essential Standard of Living, and means individuals are faced with having to do without essentials in order to make ends meet. The reality for the 25% of employees who earn below the Living Wage, and 19% of workers who are living in situations of deprivation, is having to choose between paying rent and having adequate food, making do with worn out clothes and not being able to afford to keep warm in winter.
The Living Wage for Ireland is calculated on the basis of the Minimum Essential Standard of Living Research in Ireland, conducted by the VPSJ. The 2015 rate has been calculated by VPSJ researchers in conjunction with the Living Wage Technical Group. The new figure represents an increase of €0.05 per hour over the 2014 rate (€11.45). The increase has been driven by changes in the cost of living and changes in the taxation system.
Welfare to Work
Examining the impact of retaining benefits when returning to work
This working paper examines three household types when they transition from long-term unemployment into employment. The paper examines measures that have been put in place to help individuals and households transition from long-term unemployment into employment. Such measures include being able to retain secondary benefits such as a medical card and Rent Supplement, and also being eligible for the newly introduced Back to Work Family Dividend (BTWFD).
The paper details the Minimum Income Standard (MIS), i.e. the gross salary that these household types need to earn in order to be able to afford a Minimum Essential Standard of Living (MESL) when in receipt of secondary benefits associated with returning to work after long term unemployment.
Finally, the paper details the MIS required for three identical household types who are not eligible for these benefits to demonstrate the income necessary to reach a MESL when benefits associated with returning to work are not applicable.
The MEBS model expenditure data and Minimum Income Standard approach, are applied to quantify the income need burden attributable to the high costs of formal childcare for urban based, one child household compositions.
The paper examines the gross salary required to afford the full cost of a Minimum Essential Standard of Living (MESL), including the cost of formal full-time childcare; this is the Minimum Income Standard (MIS). The analysis then sets out to identify how much of the MIS is attributable to the cost of childcare.
The MIS rate required to afford formal childcare and all the essential elements of a socially acceptable minimum standard of living, is up to 150% of the National Minimum Wage for Two Parent household compositions, and up to 260% of the National Minimum Wage for One Parent household compositions.
The effects of two alternative approaches to childcare subsidisation are modelled, examining the impact on the MIS earnings need of each approach:
- An adjustment to the Family Income Supplement (FIS) which would take account of a household’s childcare costs in the FIS means test
- A Scandinavian model of childcare charges; capping childcare costs to the household at 30% of the actual cost