2016 MINIMUM ESSENTIAL STANDARD OF LIVING VPSJ Director eam Dr. Bernadette Mac Mahon D.C. Research T Research Associate Robert Thornton Researcher Noreen Moloney
INTRODUCTION • MESL data for 90% of households in Ireland › 142 Household Compositions › Urban and Rural • Benchmark for assessing income adequacy › Social Welfare & Minimum Wage › Various employment patterns & scenarios
URBAN Core MESL 2016 Excludes Housing, Childcare & Effect of Secondary Benefits 900 0.04% 800 700 -0.2% -0.9% 600 -0.5% 500 -0.2% -1.2% -0.3% -0.7% 400 -1.6% -0.5% -1.1% 300 -0.7% 200 100 0 TP 1 TP 2a TP 2b TP 3 TP 4 OP 1 OP 2a OP 2b SA CP LP PC
Change in Core MESL and CPI 105% 100% 95% CPI MESL 90% 2008 2009 2010 2011 2012 2013 2014 2015 2016 • Core MESL down - • 2010 low point for 0.7% prices • Decrease of -1.6% • Core MESL up by 4.6% since 2014 from 2010 to 2016
Change in MESL (inc Rent & Childcare) 7.5 % MESL (Private Rent & Childcare) 5.0 % CPI 2.5 % 0.0 % -2.5 % 2013 2014 2015 2016 • Private rents up an • MESL costs up 6.9% in average of 9.2% that period • Rents accelerated • CPI shows drop of - growth in last 3 years 0.7% for same period
SOCIAL WELFARE MESL 2016
Social Welfare 2016 • State Pension • Majority of rates unchanged • Fuel Allowance • JA, OFP, QA & QCI • Child Benefit • Rent Supplement • ‘Christmas Bonus’ thresholds maintained
Percent of MESL need met by SW 115% ADEQUACY 100% 85% TP 2a TP 2b OP 2a SA LP 70% 2010 2011 2012 2013 2014 2015 2016
Social Welfare Adequacy 900 Housing MESL Core* 800 Medical Card Value Household Income 700 600 75% 90% 500 126% 80% 87% 93% 400 88% 76% 92% 300 82% 86% 96% 200 100 0 -100 TP 1 TP 2a TP 2b TP 3 TP 4 OP 1 OP 2a OP 2b SA CP LP PC
NATIONAL MINIMUM WAGE MINIMUM INCOME STANDARD MESL 2016
Income Changes 2016 • NMW increase • PRSI • USC • FIS thresholds • Child Benefit • GP for Under 6’s rolled out
National Minimum Wage Scenarios • Does the Minimum Wage provide the basis of an adequate household income? • Examine multiple scenarios • Households with children – Social Housing • T wo Parents – Single & Dual income • One Parent – Part-time & Full-time • Other Working Age – Private Rented Housing
Minimum Income Standard • The gross income a household needs in order to afford a minimum standard of living. › It takes account of the potential tax liability and social welfare entitlements of the household in question • Iterative process • Assess the adequacy of net household income, on the basis of incremental increases in gross salary
FULL-TIME SINGLE ADULT PRIVATE RENT Expenditure 600 MESL € 223 per week 13.75 500 Rent € 200 per week 400 Minimum Wage Income 78% € 332 Net Salary 300 € 91 Shortfall 200 Minimum Income Standard 100 € 515 Gross per week € 13.75 per hour 0 56 hours NMW employment -100 NMW MIS
TP Minimum Wage Adequacy 1,200 TP 1 TP 2a TP 2b TP 3 TP 4 1,100 1,000 900 800 700 600 500 400 300 200 100 0 -100 1FT 1FT & 1PT 2FT 1FT 1FT & 1PT 2FT 1FT 1FT & 1PT 2FT 1FT 1FT & 1PT 2FT 1FT 1FT & 1PT 2FT MESL Core* Housing (SH) Childcare Medical Card Value Gross Salary (Joint) Net Household Income
TWO PARENT NATIONAL MINIMUM WAGE SOCIAL HOUSING Pre-School & Primary School 1,200 Childcare Housing (SH) MESL Core* 1,100 1,000 900 99% 800 107% 700 115% 600 500 400 300 200 100 0 -100 1FT 1FT & 1PT 2FT NMW NMW NMW
TWO PARENT MINIMUM INCOME STANDARD 2 FULL-TIME Pre-School & Primary School MIS 1,200 Childcare Housing 1,100 MESL Core* • Social Housing 13.65 1,000 € 9.35 per hour 900 9.35 800 NMW + € 0.20 700 600 • Private Rented 500 € 13.65 per hour 400 NMW + € 4.50 300 200 • Needs to earn 1½ 100 times the NMW 0 -100 Social Housing Private Rent
OP Minimum Wage Adequacy 800 OP1 OP 2a OP 2b 700 600 500 400 300 200 100 0 -100 PT FT PT FT PT FT MESL Core* Housing (SH) Childcare Medical Card Value Gross Salary Net Household Income
ONE PARENT NATIONAL MINIMUM WAGE SOCIAL HOUSING Pre-School & Primary School 1,000 900 800 97% 700 123% 600 Medical Card Value 500 Childcare 400 Housing 300 MESL Core* 200 100 0 -100 1PT 1FT NMW NMW
ONE PARENT MINIMUM INCOME STANDARD SOCIAL HOUSING Pre-School & Primary School 700 MIS € 16.45 650 PAYE 600 PAYE OFP 550 500 450 400 Gross Salary Net Salary 350 T otal Income MESL PRSI 300 9.15 10.15 11.15 12.15 13.15 14.15 15.15 16.15 17.15
ONE PARENT MINIMUM INCOME STANDARD Pre-School & Primary School MIS 1,000 26.75 • Social Housing 900 800 € 16.45 per hour 16.45 700 NMW + € 7.30 600 • Private Rented 500 400 € 26.75 per hour 300 NMW + € 17.60 200 • Needs to earn 3 times 100 0 the NMW -100 Social Housing Private Rent
MESL Social Housing v Private Rented 1,250 Social Housing Private Rent MESL 1,000 750 500 250 0 TP 1 TP 2a TP 2b TP 3 TP 4 OP 1 OP 2a OP 2b
Conclusion • Core MESL down for second year in a row • CPI tends to under estimate degree of change in MESL • MESL with Rent & Childcare is up 6.9% in last 3 years • Social Welfare is meeting a greater proportion of MESL need • Change in NMW lead to net income increase • Increasing cost of private rent lead to deeper inadequacy for those unable to access social housing (Differential Rent) Need for access to adequate & affordable housing • Differentiate child related payments by age – a household with an • adolescent needs a higher level of support Examine withdrawal rate of supports such as FIS and OFP •
2016 MINIMUM ESSENTIAL STANDARD OF LIVING VPSJ Director eam Dr. Bernadette Mac Mahon D.C. Research T Research Associate Robert Thornton Researcher Noreen Moloney
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