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 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
This research commissioned by the Society of St. Vincent de Paul demonstrates that improving household energy efficiency is vital. However, improvements in energy efficiency alone will not enable vulnerable household types afford their minimum energy needs.
The degree to which the cost of household energy is a burden on a household is the product of multiple factors, the price of energy, the energy efficiency of the dwelling and the income of the household in question.
To demonstrate the varying impact and interplay of these factors, this paper identifies the household energy need for three dwelling types at different levels of efficiency, and examines the burden of this energy need for three household types in multiple income scenarios.
The analysis presents the overall expenditure required for a Minimum Essential Standard of Living for three household types, examining each household type in two income scenarios.
The paper demonstrates the impact of the energy efficiency of the dwelling a household resides in, on the overall minimum expenditure need of a household, and on the household’s vulnerability to energy poverty.
The VPSJ has prepared its annual Budget Impact Briefing in response to the details of Budget 2015.
This briefing analyses the impact of the Budget in the context of the Minimum Essential Budget Standards (MEBS) model, examining the current position of a set of household types in 2014, and what the situation will be in 2015.
The Impact Briefing calculates the forecast cost of a Minimum Essential Standard of Living for 2015, 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 has published a new working paper "Housing Tenure and its Impact on the Cost of a Minimum Essential Standard of Living".
This paper examines four household compositions in two tenure types; social housing and private rented accommodation. This paper is timely in light of falling social housing output and an increase in the number of households living in the private rented sector.
The four household compositions under consideration are:
- One Parent and One Child (infant)
- One Parent and Two Children (age 10 & 15)
- Two Parents and Two Children (age 3 & 10)
- Two Parents and Three Children (baby, 3 year old & 10 year old)
The paper, which solely focuses on the cost to the household, first examines the four household compositions in situations of employment and analyses how an identical household's minimum income standard is affected by housing tenure.
The paper then examines the same four sample households in situations of unemployment and demonstrates the impact that housing tenure has on identical households wholly reliant on social welfare. The adequacy of social welfare transfers is assessed for households in each tenure type, including Rent Supplement for those unemployed and living in the private rented sector.