The Hidden Cost of Poverty: Estimating the Public Service Cost of Poverty in Ireland

Living life on a poverty income is common in Irish society. It is the reality for around 700,000 people living in 270,000 households across the state. By necessity living life on such a low income imposes costs on these individuals and families. Making ends meet involves personal sacrifices, restricts options and limits opportunities; for many it is not always possible to find ways to make ends meet. These individual costs of poverty are large scale and leave effects that last years and at times generations. Alongside these individual costs, poverty is responsible for other costs. In particular, the presence of poverty in a society triggers demands on the public purse. These costs derive from the identification of poverty as a determining factor in the need for, and demand for, a wide range of public services and policies ranging across almost all areas of public policy. This report draws on a wide range of data, and the experiences of asking similar questions in other countries, to determine estimates of the annual public service cost of poverty for Ireland. In doing so the analysis reviews public spending across six broad areas of public policy, and within them twenty-five individual areas or expenditure programmes, accounting for a total of €27.9bn in annual state spending. Within this expenditure, the report attempts to isolate the proportion of public service provision that is driven by current and past experiences of poverty.