Child poverty at similar levels to financial crisis when housing costs accounted for

1-in-5 children live in families below the poverty line when housing costs are accounted for.  

This amounts to more than 225,000 children, with Ireland ranked 16th out of 27 countries in the European Union in terms of its after housing cost poverty rate for children. 

This rate is largely unchanged in recent years and differs little from that seen from 2007 to 2009 when the financial crisis was unfolding.  

These are among the key findings of new ESRI research published today in partnership with Community Foundation Ireland, using the latest data from the CSO’s Survey on Income and Living Conditions (SILC). 

Other key findings of the research include: 

• After adjusting for household size and inflation, average incomes fell by 0.6 per cent in the year to 2023, leaving them 3.3 per cent below their 2021 level. This is despite growth of 11.3 per cent in nominal income over that period, which has been outpaced by a 14.6 per cent increase in prices for the average household.  
   
• Inflation has been even higher for lower-income households, a result of light, heat and groceries making up a larger share of their total expenditure. We estimate that recent inflation has been 7 per cent higher than the headline rate (6.3%) for the lowest-income fifth of households and 5 per cent lower than the headline rate for the highest-income fifth of households. This – combined with patterns of nominal income growth – has led to incomes stagnating at all but the middle of the distribution. 
   
• Overall rates of poverty have not changed significantly in the most recent year of data. The before-housing-costs poverty rate stood at 12 per cent in 2023: similar to that in 2022 (11 per cent) and 2021 (13 per cent). There has also been very little change in the overall rate of after-housing-cost poverty which remains around 15 per cent.
   
• Adults who grew up in poverty are more likely to be materially deprived and in bad health as an adult. Analysis of the link between childhood poverty and adult outcomes shows those aged 25 to 59 who grew up in poverty are 8 percentage points more likely to be in bad health and 15 percentage points more likely to be deprived compared to those who grew up in good or very good conditions. There are also additional indirect effects of childhood poverty through lower educational attainment and lower employment.

Dr Barra Roantree, Director of the joint ESRI-TCD MSc in Economic Policy at Trinity College Dublin and a co-author of the report, said:  

“This report suggests there has been no real progress in reducing levels of child poverty when housing costs are accounted for. It is hard to see how the Government can meet its own child poverty reduction targets without major reform: for example, through the introduction of a second-tier of child benefit.”

Dr Anousheh Alamir, a Postdoctoral Fellow at the ESRI and co-author of the report, said: 

“Reducing the intergenerational persistence of poverty requires narrowing the education gaps between those who grew up in financially disadvantaged versus advantaged households, as well as expanding healthcare access for children from low-income families.”

Denise Charlton, Chief Executive of Community Foundation Ireland who supported the research, added:  

“The study lays bare the stagnation in real incomes and the high levels of inflation faced by the lowest income households. This will come as no surprise to the voluntary, community and charitable partners of the Community Foundation responding to this crisis on the ground every day. Now we have the evidence which reflects that everyday reality. Our partners will use this research to strengthen their calls for systemic change – including a second targeted tier of child benefit.”