Final Report of the Social Welfare Benchmarking and Indexation Group

The aim of this Final Report is to fulfil the terms of reference in the PPF and examine the issues involved in developing a benchmark for adequacy of social welfare payments and the implications of adopting an indexation methodology. Issues associated with the measurement of relative income poverty are also discussed. Chapter 2 examines the concept of income adequacy and explores the issues associated with determining an adequate income level. Chapter 3 provides a context for the discussion on benchmarks and indexation methodologies. It sets out current Government and social partnership commitments of relevance to the Group's work. It looks at the trends in demographic, labour market and economic patterns and seeks to highlight the key areas of concern insofar as welfare rates policy development is concerned. The issue of social insurance is also considered. Chapter 4 examines four illustrative benchmark options which have been considered by the Group, representing a range of payment levels, and analyses these options against the various criteria set out in the terms of reference. Chapter 5 examines the issue of child-related payments - Child Benefit, Child Dependent Allowances, and Family Income Supplement. It discusses research undertaken in relation to establishing a level of income adequacy for children. The issues of equivalence scales and child poverty are addressed. Indexation methodologies are discussed in Chapter 6, examining the various indices which may be used for the uprating of social welfare payments and the benefits and drawbacks of each approach. Chapter 7 looks at the issue of relative income poverty and discusses the factors which influence the trends in this poverty measure. A discussion on the relative merits of relative income poverty and consistent poverty is also included. Finally, Chapter 8 sums up the conclusions reached by the Group and sets out its recommendations.