Escaping in-work poverty in Ireland

This report examines in-work poverty (IWP) in Ireland and assesses the extent to which two distinct policy levers – increased working hours and reforms to in-work benefits – could lift workers out of poverty. Around 5 per cent of workers are at risk of poverty (AROP), and around 64 per cent of these are part-time workers. Using SWITCH, the ESRI's tax-benefit model, linked to representative survey data, we first profile the working poor and simulate a counterfactual scenario in which part-time workers (less than 40 hours per week) increase their work hours. Only around 35 per cent of AROP workers would escape poverty through this channel, indicating that the majority would remain poor even at full-time hours (40 hours per week). We then simulate two reforms to the Working Family Payment (WFP), Ireland's main in-work benefit: (i) full take-up of the WFP, given that current take-up is at only around half, and (ii) an extension of WFP eligibility to low-income working households without dependent children. The combination of these WFP reforms reduces the in-work AROP rate to around 3 per cent, a magnitude comparable to the increased working hours scenario.