More low wage workers and pensioners living in poverty

Interview with JRF chief executive Julia Unwin /

AN increasing number of pensioners and low income workers are among the 22% of people living in poverty in Northern Ireland, according to a new report launched today.

This is one of the key findings of research into poverty and social exclusion commissioned by the Joseph Rowntree Foundation (JRF).

The number of people in poverty living in working households doubled to 30,000 between 2005 and 2010 and half of the 120,000 children living in poverty live with a working parent.

JRF is a social policy research foundation that attempts to focus public attention on big issues facing our society.

The report – ‘Monitoring poverty and social exclusion in Northern Ireland 2012’ – highlights a noticeable change in those now living in poverty and it also calls for action from our local politicians.

The research, carried out by the New Policy Institute, updates findings of similar reports published in 2006 and 2009.

Julia Unwin, Chief Executive of the JRF, told The Detail that the report is extremely important as it highlights “a moving trajectory of poverty” in Northern Ireland.

She said: “It’s really difficult to read a report that suggests that already half-way through a recession, people have suffered so much, and that with the growing austerity and changes in public sector funding, that’s only going to get worse.”

THE FINDINGS

In the three years to 2009/10, 22% of people in Northern Ireland were living in poverty, with over a third (34%) of working-age adults lacking paid work.

The term ‘poverty’ in the report refers to those whose income is less than 60% of the median UK household income, varying according to one’s relationship status and the number of dependent children one has.

In 2009/10 (the latest year for which data is available), the threshold was £166 Before Housing Costs (BHC), £124 After Housing Costs (AHC) for a single adult with no dependent children.

For a lone parent with two children under 14, this rose to £232 BHC (£210 AHC).

For a couple with no dependent children, it stood at £248 BHC (£214 AHC).

For a couple with two children under 14, it reached £347 BHC (£300 AHC).

The report highlights an increase in ‘in-work poverty’, as the number of people in poverty living in working households has doubled to 30,000 since 2005. Half of the 120,000 children living in poverty live with a working parent.

Ms Unwin claimed this high figure of in-work poverty derives from low wages, which fail to incentivise or reward hard work.

She said: “The work is so unreliable, the hours are so short and people are increasingly working for contracts that don’t give them any security.”

The report also notes the sizeable attainment gap between children on free school meals and those who are not receiving free school meals.

Over two thirds of pupils on free school meals are failing to obtain five GCSEs at grades A* – C (compared to 36% of pupils not receiving them). Pupils living in poverty are twice as likely as other pupils to be unemployed or out of touch with education services upon leaving school.

Another striking finding is the marked increase in pensioner poverty in Northern Ireland.

The number of retired households living in poverty has risen from 55,000 to 70,000, making up 21% of all pensioners in Northern Ireland.

This compares to Great Britain, where the figure continues to decrease so that now only 16% of pensioners are in poverty.

With more reliance on the state and less reliance on private sector pension schemes in Northern Ireland, pensioners here are being left poorer than their counterparts in Great Britain.

While only 5% of UK pensioner couples have no income other than the state pension and pension credits, 25% of Northern Irish pensioner couples are entirely reliant on state support.

Differences between Northern Ireland and the rest of the UK can be seen in the higher level of benefit claims in the former, where 23% of working-age people claim a key benefit compared to the highest rates in Great Britain at 20% in Wales and North East England.

Furthermore, the median income in Northern Ireland is decreasing relative to the median income in Great Britain. Whereas, it represented 96% of GB’s median income in 2005, it now represents only 94%. Such a decrease indicates a differentiation between Northern Ireland and the rest of the UK in terms of income poverty.

Yet, despite these inconsistencies, the report finds that Northern Ireland’s traditionally higher rates of worklessness are slowly converging with the usually lower rates of Great Britain.

By mid-2011, 34% of working-age adults lacked paid work, but due to the crippling effects of the recession throughout the UK, this figure was matched by Wales, and overtaken in North East England.

CUTS TO COME

The report acknowledges the prospective welfare cuts that loom over its findings and it claims that they could affect Northern Ireland more severely for a number of reasons.

Firstly, the public sector makes up more of the job market in Northern Ireland than in the rest of the UK (30% compared to 20% by some estimates) and hires a proportionally high number of female workers. Therefore, any scaling back of the public sector here could threaten female employment and perpetuate an already existing gender disparity.

Secondly, the government aims to reduce claims for Disability Living Allowance (DLA) by 20% and plans to transfer a number of claimants to the Personal Independence Payment (PIP).

Today’s report claims that PIP’s increased requirements on people with disabilities to look for work will impact far more on Northern Ireland than in Great Britain.

With 7% out of work due to long-term illness, compared with only 4% in Great Britain, the high proportion of working-age people with severe disabilities in Northern Ireland means that welfare reform will have a disproportionate effect on the region.

Ms Unwin believes that such elements of welfare reform seem to be “very risky”.

She said: “It would be great if people could work, if there were jobs for them to go to and if those jobs paid enough. Our concern is that bringing in this sort of reform at this stage in the economic cycle may make people under great pressure to work when there are simply no jobs for them to go to.”

She told The Detail that local and national governments need to work together to prevent the development of a ‘two-stage economy’ and make sure “that poor people are not left behind by growth which doesn’t benefit them”.

The ‘Monitoring poverty and social exclusion in Northern Ireland 2012’ report refers to the Northern Ireland Executive’s ‘Programme for Government’, which mentions a Stormont advisory group tasked with assisting ministers to alleviate any adverse implications of welfare reform.

It claims that, in the face of the hardships facing Northern Ireland, this Stormont advisory group must “produce plans and evidence-based policies” that will support those who are most affected, namely pensioners and low income workers.

Ms Unwin reiterated this point of the report when she said: “We think it produces a very compelling message about making sure that people in poverty are not left behind in any growth, and that Stormont in particular focuses on the needs of the poorest when it launches into its economic regeneration.”