One in five children in Ireland now lives in a family below the poverty line when housing costs are taken into account, according to new research from the Economic and Social Research Institute (ESRI).
It shows child poverty rates are now approaching the bleakest days of the economic crash, with many parents having to choose between food, clothing, lighting and heat as the cost-of-living crisis deepens.
More than 225,000 children are now subject to income poverty after housing costs, the report notes.
The research, published by the ESRI and Community Foundation Ireland (CFI), uses data from the Central Statistics Office’s Survey on Income and Living Conditions.
It is the fifth such report from a research programme exploring the evolution of poverty, income inequality and living standards in Ireland.
“The Government’s official measures of poverty, and also its poverty targets, don’t account for housing costs,” said Barra Roantree, assistant professor in economics at Trinity College Dublin and a co-author of the report.
“They just look at income after taxes and transfers from Government like social welfare payments. What our research shows is that housing costs are really important for looking at poverty rates, in particular for children.
“The reason for that is simply because younger households, or households with kids, are more likely to be private renters or more likely to have recently bought a home and to have a large mortgage.”
Data for the report was collected in 2024 but refers to incomes in 2023. When adjusted for household size and inflation, average incomes in Ireland fell by 0.6 per cent that year, leaving them 3.3 per cent below 2021 levels.
Since 2021, nominal income increased by 11.3 per cent, but prices rose by 14.6 per cent for the average household. While average disposable incomes increased in cash terms, their growth was comfortably outpaced by rising prices.
This is in stark contrast with real income over the previous decade, which grew by 3.4 per cent per year on average between 2011 and 2021.
Compounding the recent downturn, inflation has had a disproportionate impact on lower-income homes, for which lighting, heat and groceries account for a larger share of total expenditure. Living standards in lower-income households are also more reliant on cash transfers such as social welfare payments. However, while these payments have increased in nominal terms over recent budgets, many have not kept pace with inflation.
Some of the effects of these sustained real cuts, the report continues, have been offset by the combination of universal and targeted “temporary” payments, such as household energy credits and double payments of child benefit. However, the ESRI warns that a withdrawal of such payments would have damaging consequences for lower-income households.
“As those once-off payments get withdrawn, which they’ll need to be, you’re going to see a drop in the incomes of lower-income households unless there is action to essentially catch up on the core rates of welfare payments,” Mr Roantree said. “That’s something that we have seen in other countries.
“In other countries, like even the UK, those rates have kept track with inflation because they do by default. That’s not what we’ve seen in Ireland to date, but it is a really big challenge for the Government in this coming budget.”
The Children’s Rights Alliance has been calling for Budget 2026 to include targeted measures to support children in low-income families. Tanya Ward, chief executive of the charity, agrees that policymakers should include housing costs as a factor impacting child poverty.
“Despite all the measures that they’ve introduced, they are still dealing with the same number of children in poverty that they had during the recession because of housing costs,” she said. “That’s unacceptable, it’s not good enough and it needs to change in Budget 2026.”