How national poverty targets in Ireland relate to the EU poverty targets

Newsletter 2011-3

Publication date : 2011-12-02

Leaders of the European Union secured poverty’s place on the region’s ten-year growth strategy when in 2010 they set a target to reduce the number of people at risk of poverty or social exclusion by 20 million. Although the EU adopted an explicit definition of the Europe 2020 poverty target, Member States are responsible for the realisation of the goal and retain the freedom to define their own targets to reflect their circumstances.

Some Member States, notably Ireland, already had mature policies in place to tackle poverty before the EU2020 growth strategy. Back in 1997 Ireland established an innovative approach to measuring poverty which included - as the EU definition would also later include - material deprivation. The EU notion of poverty is multidimensional; it is composed of those who suffer material deprivation, those at-risk of income poverty, and those belonging to so-called “jobless households”. But the Irish definition differs from the EU headline definition in two important respects. Firstly, Ireland’s measure counts poverty where there is a combination of material deprivation and income poverty, instead of counting instances of either one or the other. For this reason the poverty indication in Ireland refers to those in “consistent poverty”. In addition, Ireland applies a more liberal definition of material deprivation (2+ items from a list of 11) compared to the EU’s definition which only counts material deprivation when  at least 3 or 4 items are missing from a different list consisting of 9 items. As a result, the Irish method defines a much smaller and more heterogeneous, group of individuals as poor compared to the headline EU definition.

Needless to say, the definition of poverty has a profound impact on the policies designed to combat it. An important aspect of Ireland’s approach has been the use of social transfers (which contributed to reducing the at-risk of poverty by as much as 50% by 2007).

The Peer Review took place in Dublin, on 16-17 June 2011. It was hosted by Ireland’s Department of Social Protection. In addition to representatives from the host country, Belgium, Bulgaria, Croatia, Finland, Latvia, Malta, Norway, Romania, Slovakia and the United Kingdom participated, as well as the two stakeholder organisations EAPN and the European Social Network, and representatives from the European Commission from the Directorate-General Employment, Social Affairs and Inclusion.

Key issues and lessons learned

The Irish case raises questions about the relationship between EU and national targets. In sum, the following five issues were raised:

• How the national poverty targets are defined and monitored is a tricky subject. Limitations of the EU measure have been raised: the at-risk of poverty measure suffers from being sensitive to growth and median income and unable to account for severity or duration of poverty; whilst the material deprivation measure can be manipulated through the choice of the basket of goods. Member States have their own agendas and priorities to address – for example the UK has chosen to focus on child poverty, whilst Bulgaria aims to lift 260,000 people out of poverty.
• A notable strength of the Irish indicator is its ability to count the neediest. This is not possible with the multiple indicators concept embraced in the EU model; but the EU model has to be interpreted as a compromise between 27 Member States. Essentially, it is important that the targets are not static but can be interpreted and moulded to their context.
• Policy distortion (e.g. targeting the least poor – ‘creaming’) must be prevented.
• The economic crisis highlights and increases the vulnerabilities of the most disadvantaged. There is a need for real-time responses, monitoring, and a sensitivity to the specific causes of poverty vis-à-vis the crisis (e.g. increases in personal debt).
• Linkages between national poverty targets and other targets  (in particular employment and education) need to be explored and the statistical capacity of some Member States needs to be supported whilst third sector organisations could be more involved in the on-going debate.

http://www.peer-review-social-inclusion.eu/peer-reviews/2011/the-setting-of-national-poverty-targets