The Economic and Social Research Institute has stated that the Irish government’s recent spending plans will do little to lift children out of poverty, despite targeted increases in specific household supports.
Budget 2027 Falls Short on Child Poverty Rates
In its analysis of Budget 2027, researchers found that planned increases to the Child Support Payment and Working Family Payment are unlikely to move the needle on national poverty rates.
While universal childcare subsidies for children up to senior infants earned praise from the institute, analysts noted these changes will merely hold child poverty relatively constant when measured against a wage- or price-indexed baseline.
A Stark Rise in Vulnerable Households Since 2021
The scale of the challenge remains stark.
The number of children living in households falling below the poverty line—defined as having less than 60% of median real disposable income—climbed to 200,000 in 2024. That figure marks an increase of almost 30,000 children compared to 2021, the last year for which comparable data is available.
The Case for a Second Tier of Child Benefit
To fundamentally shift these trajectories, the Economic and Social Research Institute maintains that the state must introduce a second tier of Child Benefit.
Taoiseach Micheál Martin indicated in September that his administration was working on that exact mechanism, explaining that officials want to ensure families relying on existing beneficial payments do not lose out under a revised structure.
Seven Budgets Leave Households Slightly Worse Off
Across the economy, the institute's evaluation shows that the lowest-income households will capture some gains from the budget, whereas better-off households will see little to no change in their overall financial health.
Yet, looking at a longer timeline, the last seven budgets have left households slightly worse off than they would have been had government supports and tax measures kept pace with rising wages. Since before the pandemic, households have absorbed an average 0.3% reduction in disposable income due to direct tax, welfare, and childcare policies.
At the same time, targeted interventions have achieved localized reductions in poverty rates. Since 2020, cumulative budget measures have cut the overall poverty rate by roughly two percentage points compared to a wage-tracking baseline.
Carbon Tax Cuts and Disability Support Criticized
Tuesday’s fiscal package also included a cut to the carbon tax on home heating oil and gas alongside shelved increases for the remainder of the government’s term. The Economic and Social Research Institute criticized the move as an expensive measure that fails to target vulnerable populations or encourage meaningful decarbonization.
Claire Keane, an associate research professor at the institute, pointed out that the allocation falls well short of covering the actual extra costs incurred by disabled individuals in daily life.
