“Due to the cost-of-living crisis, anything less than a €27.50 adjustment in core social welfare rates will be a real term cut. This is the absolute minimum required to prevent individuals and families being pulled deeper into poverty.”
The Minimum Essential Standard of Living (MESL) research was transferred from the Vincentian Partnership for Social Justice, to the Vincentian MESL Research Centre at the SVP in July 2022. The MESL research has been ongoing since 2004. The MESL budget standards research has developed to provide an evidence-based benchmark of what is required for a life with dignity for 90% of households in Ireland, and has become an integral part of the policy discourse around income adequacy, poverty and social inclusion.
The MESL expenditure needs dataset is adjusted annually for all household types, to reflect changes in prices. The income calculations used in the Minimum Income Standard (MIS) analysis and the MISc.ie calculator web application are updated each year, incorporating all relevant changes to social welfare and taxation.
The most recent MESL Annual Update Report 2023 has revealed that the cost of the MESL ‘Basket’ has increased by an average of 10.6% nationally predominately driven by the rising cost of food and energy. The MESL basket identifies minimum goods and services that everyone should be able to afford. However, the core MESL basket also assumes that the household is in good health, does not have a disability and also excludes housing, childcare and secondary benefits.
Although the parameters of the MESL Calculations have been reviewed and updated due to the recent hike in the cost of living, they are still based on multiple assumptions which do not accurately reflect the reality for thousands of older persons in Ireland:
- It is assumed that the older person is receiving the highest pension rate of €254 (non-contributory) or €265.30 (contributory)
- The budget allocated to mortgage or rent payments only ranges from €36.60 to €56.70 per week
- The report assumes that the older person is also in receipt of the majority of all bonuses and allowances
- Older persons are also considered to be a full medical card holder
Even with the above assumptions, the MESL research found that the cost of a Minimum Essential Standard of Living for an older single adult living alone has increased significantly since 2022. One-off income supports or additional weekly allowances have not kept pace with the rise in inflation, which demonstrates income inadequacy in 2023.
As we have mentioned in previous articles, the Survey on Income and Living Conditions (SILC) 2022 revealed that persons aged 65 and older had the highest increase in the ‘at risk of poverty’ rate going from 11.9% in 2021 to 19.0% in 2022. As we hear from more and more older persons who are struggling, we imagine that the number of people at risk of poverty has dramatically increased since 2022 and indeed the number of older persons who have since crossed this poverty line.
“The 2023 analysis finds that, for the first time since 2017, neither the Contributory nor Non-Contributory State Pension will provide the basis of an adequate income for an urban older person living alone.”
The Pension Promise Coalition (ISCP, SIPTU, NWCI, Age Action, ARI) have just completed one round of public meetings as part of a campaign where we have been calling on the Government to deliver on its previous commitment to benchmark the state pension at 34% of average earnings. If this system was introduced by next year, the increase would equate to approximately €53 extra per week. The Pension Promise Coalition, Alone Ireland, the European Anti-Poverty Network (EAPN) and multiple other age organisations are calling for the benchmarking of social welfare payments against a level that is adequate to lift people above the poverty line and provide them with at least a minimum standard of living.
Everyone deserves an equal standing in society, an equal opportunity to participate in their community and equal access to an average standard of living. The ISCP continues to try to address this injustice and to ensure that every older person will have security in retirement.