Child poverty in Ireland ‘will top 21pc this year if economy doesn’t rebound’

MORE than one in five children in Ireland will end up below the poverty line by the end of the year if there is no substantial economic recovery from Covid-19.

That is the central forecast in a report, Child Poverty in Ireland and the Pandemic Recession, published today by the Economic and Social Research Institute (ESRI) think-tank.

“Emergency income support measures, such as the Pandemic Unemployment Payment and the Temporary Wage Subsidy Scheme, have supported families during the pandemic. However, even with these measures in place for the remainder of 2020, we can expect to see child poverty levels rising by an average of one-quarter in the absence of some economic recovery,” said report co-author Mark Regan.

The report recommends that increases to child benefit and other child-dependent elements of welfare pay would reduce the flow of children into poverty.

And it warns that, even in the report’s more relatively benign scenario of substantial recovery in employment in the autumn, many displaced workers can expect to gain new jobs at lower average wages – potentially 10pc to 15pc lower than before the crisis.

Even in pre-crisis Ireland, 16.6pc of children here were already considered to be living below the poverty line – defined as surviving in households without consistent access to at least two of 11 essential goods and services.

These include food, clothing, heating and social activities.

The ESRI analysis finds that these poverty levels are bound to rise in the second half of 2020 – but the question is by how much?

The report forecasts that child poverty would rise to 18pc in the most benign scenario. This would involve Ireland avoiding a second surge of Covid-19 infections, clearing the way for most workers currently laid-off because of the pandemic to return to their jobs by the end of September.

But if the nation remains mired in recession and pandemic disruption, and the temporarily unemployed do not return to work this year, the ESRI says child poverty would rise above 21pc by Christmas.

It noted that, during the economic crisis a decade ago, poverty rates among children more than doubled to 37pc before declining from 2013 onward.

Based on running 100 simulations of how household incomes might be affected, the ESRI says child poverty would rise to at least 19.5pc and potentially reach 22.6pc if Covid-19 prevents a recovery and the current State income supports run through to the end of 2020.

In the more benign scenario, the potential child-poverty outcomes from simulations range from 16.8pc – little changed from before the crisis – to a top potential of 19pc.

The ESRI notes that, should child poverty increase from its pre-crisis levels of 16.6pc to the central forecast of 21.1pc, this would represent 27pc growth in the number of children below the poverty line.

It notes the potential for children from previously financially secure households to fall below the poverty line because, unlike in poor households, the current State wage subsidies and unemployment supports can represent a major drop in their family finances, with losses of disposable income of up to 80pc.

“Policymakers should bear in mind that children now falling below the income poverty line in both our analysed scenarios tend to live in households that experienced large income losses because of employment losses,” the report said.

“Policies which increase the child-dependent components of social welfare schemes or universal increases to child benefit would help to combat these income losses.”

‘Even with income support in place, child poverty may rise by one quarter’