Welfare Indexation Crucial in Combatting Income Inequality

The Irish Human Rights and Equality Commission (‘the Commission) today published its policy statement on welfare indexation. The report sets out twelve key recommendations.

The index-linking of welfare payments is the practice of increasing social welfare payments (including pensions), and / or tax credits and tax bands, in line with inflation and has been identified as a key tool to combat income inequality.

Despite being considered in the Irish policy context for over three decades, the indexation of welfare payments is not yet a feature of Irish fiscal policy.

Indeed, last July the Oireachtas Committee on Budgetary Oversight noted that the ad-hoc nature of the current system of taxation and welfare has the potential to further grow inequality

Following the work of the Committee on Budgetary Oversight, and noting commitments across Government policy and strategy to protect the most vulnerable, the Commission has today recommended that the Government introduces a system of Welfare Indexation as a matter of priority.

Chief Commissioner Sinéad Gibney said:

“We are currently experiencing a record period of rising inflation, casuing a cost of living crisis and a devastating increase in homelessness. As always, in periods of recession, the hardest hit are people on social welfare and pensioners. Introducing Welfare Indexation carries real potential to reduce income inequality in our communities and prevent vulnerable groups from falling below the poverty line.

“Research has proven time and time again that economic equality is better for everyone; the more equally wealth is distributed, the better for society in general.”

Recommendations include:

  • The establishing of an independent Indexation Committee, to consider, calculate, recommend, monitor and review indexation
  • That welfare supports are indexed to wages and that wage indexation is the most appropriate baseline for policymakers to work from
  • That qualifying thresholds for supports be adjusted in tandem with indexed welfare payments
  • That the State address gaps in evidence and administative data
  • That the State prioritises research across Government Departments on the fiscal and distributional impact of policy changes on structurally vulnerable groups.


For further information, please contact:
Sarah Clarkin, IHREC Communications Manager,
01 852 9641 / 087 468 7760
Follow us on twitter @_IHREC

IHREC Policy Statement on the Index-Linking of Welfare Payments can be accessed at: https://www.ihrec.ie/documents/policy-statement-on-the-index-linking-of-welfare-payments-welfare-indexation/

The Irish Human Rights and Equality Commission is an independent public body, appointed by the President and directly accountable to the Oireachtas. The Commission has a statutory remit set out under the Irish Human Rights and Equality Commission Act (2014) to protect and promote human rights and equality in Ireland, and build a culture of respect for human rights, equality and intercultural understanding in the State.
The Irish Human Rights and Equality Commission is Ireland’s national human rights institution and is recognised as such by the United Nations. The Commission is also Ireland’s national equality body for the purpose of a range of EU anti-discrimination measures.