A NERI webinar on 'The Future of the Irish Social Welfare System' takes place on Wednesday, 24th March at 3:00. Dr. Helen Johnston will be presenting the NESC report and I will be responding. The following blog post refers to one aspect of that report.
The National Economic and Social Council’s recently-published ‘The Future of the Irish Social Welfare System: Participation and Protection’ provides a progressive and coherent framework to ground the debate about transforming social protection in the post-pandemic recovery. It identifies three overriding issues:
- economic inequality
- the mix of cash versus benefits
- the role of social insurance
The following looks at one particular issue in this framework – the relationship between cash transfers and public services /benefits-in-kind. There is an over-emphasis on cash as the primary means to deliver social protection.
Ever since the ESRI’s study of child poverty and child income supports published back in 2006, we should be wary about the near-hegemonic role of cash transfers. At that time, the ESRI found that, in comparison with other EU countries, Ireland had a very high level of cash supports but still had high levels of child poverty. Much of this was explained by the low level of public services and non-cash benefits directed at children and families.
To illustrate our low level of services and in-kind benefits, let’s compare the Irish system with other EU countries in our peer group in two social constituencies: disability, and families and children.
Disability
Women and men with disabilities face a particularly difficult time in Ireland. According to the CSO, 37 percent of those unable to work due to permanent sickness/disability are at risk of poverty (compared to a national average of 13 percent); nearly one-in-five, or18 percent, experience consistent poverty (a grimmer benchmark), while 43 percent suffer multiple deprivation experiences – more than twice the national average.
Ireland is a low spender on social protection supports for those with disabilities when compared with our peer group in the EU. In 2018, we’d have had to spend an additional €800 million, an increase of nearly a third (factoring in prices and the prevalence of disability). But the structure of spending is even more lopsided.
In our peer group, benefits-in-kind make up nearly 40 percent of total social protection expenditure for those with disabilities; in Ireland, it is four percent. But it gets worse.
Even of our small benefit-in-kind budget, nearly two-thirds of the spending is means-tested. While it is not as means-tested as Netherlands or Austria, we can see that countries with much larger in-kind benefit expenditure have effectively no means-testing at all: Finland, Denmark, Sweden, Belgium and France.
What makes up benefit-in-kind? Eurostat gives a broad definition:
‘ . . . lodging and possibly board provided to disabled persons in appropriate establishments, assistance provided to disabled persons to help them with daily tasks (home help, transport facilities etc.), allowances paid to the person who looks after the disabled person, vocational and other training provided to further the occupational and social rehabilitation of disabled persons, miscellaneous services and goods provided to disabled persons to enable them to participate in leisure and cultural activities or to travel or to participate in community life.’
Home helps, household supports, training to facilitate work, and goods and services that enable those with disabilities to participate in leisure, cultural and community life: this promotes living standards and life quality. If people do not have access to such publicly-provided goods and services then they must either purchase them on the private market or do without – both of which can depress living standards and income.
Families with Children
Whereas Ireland has a low level of disability prevalence in the population given its younger demographic, that same demographic means that a larger proportion of the population is made up of children and their families. Again, using a back-of-the-excel-sheet estimate, we’d have to double spending on social protection supports for families with children to reach our peer group average (factoring in prices and the number of children below the age of 15). That would be about €2 billion.
And, again, within that expenditure we find a low level of services and in-kind support.
In effect, Ireland doesn’t spend money on benefits-in-kind for families with children (according to Eurostat categorisation). In our peer group, however, over 40 percent of social protection support for families with children comes via benefits-in-kind.
And within our meagre benefits-in-kind budget, 98 percent is means-tested. In our peer group (with the exception of Germany) means-testing is effectively non-existent.
Returning to Eurostat’s definition of benefits-in-kind we find that they include:
‘ . . . shelter and board provided to pre-school children during the day or part of the day, financial assistance towards payment of a nurse to look after children during the day, shelter and board provided to children and families on a permanent basis (orphanages, foster families, etc.), goods and services provided at home to children or to those who care for them, miscellaneous services and goods provided to families, young people or children (holiday and leisure centres).’
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More research is necessary to compare particular programmes (or lack of programmes in Ireland’s case) with other EU countries. Eurostat categorisation does not necessarily fit national definitions. So all of the above should be treated indicatively. However, it is reasonable to assume that
- Ireland spends less on social protection supports than other countries in our peer group
- Benefits-in-kind make up a smaller proportion of social protection expenditure
- Means-testing dominates our in-kind expenditure in contrast with our peer group
People’s experience of the pandemic has raised issues of social security that go beyond just dealing with a particular disease. Therefore, we have an opportunity to begin a new debate about social protection – or how we protect the social. This means going beyond poverty-amelioration. That requires a greater emphasis on social insurance, income protection for low and average income groups, and a more universal approach to services and benefits-in-kind.
The NESC report provides a number of proposals, ideas and suggestions – many of which people will disagree with. However, to focus on the disagreements is to miss the point of NESC’s intervention. They are not presenting a buffet of policies. The strength of the report is to provide a coherent and logical framework through which we can debate different policies – one that guards against simplicities, rhetoric and meaningless comparisons.
That is the real value of the NESC report. That is why it should be the starting point for the debate on the future of our social protection system.
You can register for the NERI seminar on Wednesday, March 24th at 3:00 pm here: http://www.nerinstitute.net/events/2021/neri-webinar-future-irish-social-welfare-system