A recent EU study showed that households in Ireland experienced , in relative terms , the largest reductions in disposable income because of austerity measures imposed on them.
The study by the “Social Situation Observatory'” compared the impact of austerity measures implemented over the period 2009-2011 in six European countries, namely Estonia, Ireland, Greece, Portugal, Spain and the United Kingdom.
The analysis measured the effects on household income distribution of changes in direct personal taxes, cash benefits, and public sector pay. ( VAT changes not included) .
The results showed that, as a result of the fiscal adjustment, the Irish households experienced an average fall of 8.1% in disposable income . The figures for the other 5 countries ranged from 1.9% (UK) , 2.2% (Estonia) , 3% (Portugal), 2.7% (Spain) , 6.2% (Greece) .
In Ireland – the effect of the austerity measures affected households with children the most – with elderly households coming off best . Some elderly households actually showed an increase in disposable income of over 2% over the period.
In Greece – households with children were not hit as hard as pensioners by the austerity measures.
In Ireland the relative drop in household income was higher for low income households and even higher for richer households. The austerity changes affected middle income households less .
These figures did not include Budget 2012 changes – which saw more child benefit cuts. The effect of the household charge is not included either.