Cork charities warn increasing earnings gap is driving people into poverty

The last budget saw the gap widen between those on low and middle incomes, says Social Justice Ireland, with both St Vincent de Paul (SVP) and Cork Simon saying people who have never had to avail of their services before are now coming to them for help.

An analysis of the distributive effects of Budget 2025 policy by Social Justice Ireland shows the highest earners have gained most over the last five budgets.

Over the period from 2020-2025, the rich-poor gap widened by €18.45 per week, while the middle-poor gap decreased by €3.92 per week nationally, driven by income tax reduction choices that prioritised higher earners.

Concern

Speaking to The Echo, Michelle Murphy, research and policy analyst at Social Justice Ireland, said: “It’s a concern that most of the cost-of-living supports have ended, but the tax changes will remain. The middle group have been really left behind.

“People working in sectors like hospitality or retail, they’re often also renting and given the constant increase in rents eating into their disposable income, there’s very limited money for everything else.”

Louise Bayliss, SVP head of social justice, told The Echo they are seeing the results of this on the ground.

“There’s definitely been a change in the profile of people coming to our services, people who would have before been donors are now looking for help themselves.

“Anybody who doesn’t own their own house, or has a child with additional needs, even if they in theory have a higher income and aren’t the poorest people in society, they’re struggling when they wouldn’t traditionally have struggled,” said Ms Bayliss.

Worrying

She said it is “worrying” that cost-of-living measures will not feature in this year’s budget, while the tax cuts which benefit those with the highest incomes will remain in place, explaining that targeted measures are needed for groups such as single parents and older people living alone.

Paul Sheehan, head of campaigns and communications at Cork Simon, said they too were seeing a change in the profile of people they helped.

“The group of people we support are usually people with very complex needs; disadvantaged backgrounds, poor physical and mental health, addiction. Increasingly in the last few years we’ve seen more and more people who just can’t afford to put a roof over their heads.

“We see it every night at the soup run, people at the very edge of homelessness, all their resources are going to keeping that roof over their heads. It’s only a matter of time before they’re knocking on our door looking for an emergency bed. We’ve come across people in need of emergency accommodation who are working, that’s increasingly the case.”