Transfers tied to housing, medical care and childcare help reduce deprivation among lone parents

A new ESRI study commissioned by the Department of Social Protection found that tied cash and non-cash transfers are associated with lower deprivation, especially among vulnerable families. The authors considered benefits tied to housing, childcare, and medical services using 2017 data. They found that 69 per cent of households received at least one of these transfers and 22 per cent received two or more transfers.

Overall, the transfers were well targeted to disadvantaged households. Households where an adult had a disability and households with older adults were the most likely to receive a transfer. Lone parent households were most likely to receive two transfers. Households with working-age adults were the least likely to receive these benefits.

The study explores access to transfers and simulates their impact by measuring the relationship between household income and deprivation with and without the transfers.

Transfers tied to housing

  • Using 2017 data, the authors found that 44 per cent of people received some type of housing transfer, whether a housing supplement like rent supplement (1.5 per cent), a housing benefit like electricity allowance (41 per cent) or both (1.3 per cent).
  • Adults over 65, lone parents, and adults with a disability were more likely to receive a housing transfer when compared to working-age adults.
  • Lone parents saw a 5-percentage point fall in predicted deprivation after housing transfers were considered, and households with a disability saw a 3-percentage point drop in the same measure.

Transfers tied to medical cards and GP visit cards

  • In 2017, just 31 per cent of people held a medical card or a GP visit card.
  • The cards were common among those in vulnerable social risk groups. Most lone parents (67 per cent), adults with a disability (60 per cent), and older adults (71 per cent) held a medical card. Fewer than one in four working-age adults (22 per cent) held a medical card.
  • Imputing a cash value to medical cards, and adding this to income, the authors argue that having a card was associated with a small reduction in deprivation.
  • Households with a person with a disability experienced the sharpest reduction in deprivation after accounting for the value of the cards (1 percentage point fall), followed by lone parents (0.7 percentage point fall).

Policy Implications

  • Cash and non-cash transfers have a role to play in reducing deprivation.
  • Although means-tested transfers produce positive results, more widely available transfers like the ECCE have a particularly strong association with lower deprivation. Thus broader programmes may be especially important for vulnerable groups like lone parents.
  • Despite the transfers, lone parents and households with a disability remain the most likely to experience deprivation. Therefore, the effectiveness of transfers should be compared against alternative policies (such as untied cash transfers) that are designed to reduce poverty and deprivation.

Bertrand Maître, an author of the report commented, “The benefits examined here had the expected impact in reducing deprivation. They have a role to play in reducing social exclusion and providing a customary life, especially for lone parents and the unemployed.

Joe O’Brien, T.D., Minister of State with responsibility for social inclusion policy in the Department of Social Protection, noted that “this report tells us that these specific supports are being accessed by those who need them most and they are helping to reduce deprivation. This is reassuring evidence that Government investment in these supports is having a positive impact on deprivation in Ireland, and supporting the most vulnerable within our society.”