Covid-19 income supports benefiting low income and high debt households the most - CSO
The Central Statistics Office (CSO) has released a study on the impact of Covid-19 on the debt sustainability of Irish households.
It is the outcome of a joint research collaboration between the CSO and the Central Bank of Ireland, working together to provide timely, policy-relevant information on the wider economic effects of the pandemic.
Some of its key findings were:
In quarter two of 2020, when Covid-19 restrictions were tightest, median gross household income, which includes Covid income supports, fell by 1.7% relative to quarter two in 2019, but increased by 3.0% in the year to quarter three, when restriction began to ease
Without Covid-19 income supports, median income would have fallen by an estimated 19.6% and 5.7% in the year to quarter two and three of 2020 respectively, assuming no other replacement income such as pre-existing supports like Jobseeker’s Allowance and Benefit.
Household income, with Covid-19 income supports, fell by between 0.1% and 4.2% in the year to quatrter two 2020 for lower income households, but would have fallen between 18% and 30% in the year to quarter two without supports.
For households with debt, the debt-to-income ratios for ‘all debt’ increased slightly in quarter two 2020 to 60.9% of gross income for the median household, but when Covid-19 income supports are excluded, the debt ratio would have increased to 73.0% of household income in quarter two.
Debt-to-income ratios for the most indebted households increased from 342.0% to 376.1% of income in quarter 2020, which would have increased to 552.3% in quarter two without Covid-19 income supports.
Debt-service ratios, which measure the amount of gross income used to service or repay debt, increased marginally to 11.7% of gross income (for all debt) in quarter two 2020 for the median household, which would have been 13.6% for the median household without income supports.
Brian Cahill, Statistician, CSO, said: "This publication presents analysis of the impact the Covid-19 crisis has had on the incomes of Irish households and their ability to sustain their debt commitments in the first three-quarters of 2020.
"Across all households, when Covid-19 income supports are included, there is a relatively consistent pattern of year-on-year income declines in quarter two 2020, followed by positive changes in the year to quarter three.
"There is, however, considerable variation across characteristics.
"Those household types with the largest “gap” between their year-on-year income change with supports and without supports include single adult households with children under 18, households with younger reference persons (under 30 years) and households that are rented.
"While lower income households had the largest relative benefits from Covid-19 income supports, the households that benefitted most in terms of their debt sustainability included households with high debt levels, owner-occupied households with mortgage debt, households with two or more adults with children under 18 years and households with a reference person aged 30 to 65 years."