Budget 2025 ‘will not reduce overall poverty levels’ according to ESRI

A more focused child benefit payment could have lifted 40,000 children out of poverty

This is most evident among children and vulnerable groups in Ireland. 

The report highlights that untargeted cost-of-living measures, like energy credits and double child benefit payments, could have been more effectively used to significantly reduce child poverty.

The ESRI said that the funds allocated to these broad measures would have been sufficient to introduce a second tier of child benefit, which could have lifted 40,000 children out of poverty. 

As well as this, the organisation warned that removing these cost-of-living supports, particularly energy credits, could pose a risk for pensioners and people with disabilities unless welfare increases. 

The reduction in energy credits from €450 to €250 will particularly impact households on fixed incomes, like pensioners, where the credit forms a significant part of their income.

Dr. Karina Doorley from the ESRI said that while Budget 2025 will lead to modest income gains for households, it will have little effect on reducing overall or child poverty. 

The report then noted that without temporary measures in place, the at-risk-of-poverty rate among retired households would be five percent higher than estimated for next year.

The ESRI's review of the last five budgets found that linking welfare benefits solely to inflation could have left some families slightly better off. 

However, targeted provisions like free school books and free meals have made a noticeable positive impact.

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