Budget 2025 will not reduce poverty levels - ESRI

The average household will make small gains from the Budget, but it will not reduce overall poverty levels, according to an analysis by the Economic and Social and Research Institute.

The organisation has also calculated that the cost of untargeted cost of living measures such as energy credits and double child benefit payments would have been enough to finance a second tier of child benefit and lift 40,000 youngsters out of poverty.

It also warned the withdrawal of cost-of-living measures may increase the risk of poverty for pensioners and the disabled unless there are accompanying welfare increases.

It said the reduction in the energy credit from €450 this year to €250 in Budget 2025 "will disproportionately affect households on fixed incomes, such as pensioners, for whom this credit represents a large proportion of income."

It added that: "Temporary cost-of-living measures, which have been a feature of this and the last number of budgets, are providing considerable assistance to many households."

The organisation said without these measures, the at-risk-of-poverty rate of retired households would be five percentage points higher than had been estimated for 2025.

The ESRI's Dr Karina Doorley said, "Budget 2025 will result in small average household income gains, compared to a budget indexed to forecast income growth."

She added: "However, it will have little effect on reducing overall poverty or child poverty."

The organisation has also done a separate exercise looking at the effect of the past five budgets.

It said if benefits were simply linked to inflation instead of adjusted every year by the Government, families would have been slightly better off.

It found that the provision of free school books and free meals also have a measurable beneficial impact.