Annual Report 2021

I welcome the publication of the Department of Social Protection’s Annual Report for 2021.

Over the last two years we have faced many exceptional challenges, and I am immensely honoured to have led the department through what has been one of the most difficult times in the history of the State.

The department’s responsiveness and unprecedented support for those impacted by the COVID-19 pandemic continued throughout 2021. Our focus and priority as a department has been on reducing the burden on the most vulnerable and, in the words of our mission statement, promote the active participation and inclusion of all in society through the provision of income supports, employment services and more. Between the normal social protection income supports and the COVID-19 specific measures, there were approximately 2 million recipients of weekly or monthly social protection payments and 3.3 million people were beneficiaries of the department’s schemes. In total, approximately 85 million individual payments were made.

This is reflected in the total expenditure on social protection payments last year reaching more than €30.4 billion, necessitated by the continuation of the pandemic income supports introduced in 2020. This figure accounts for approximately 29% of all government spending in 2021, with €8.8 billion of this (28.9%) spent on COVID-19 related schemes and additions to existing schemes and the remaining €21.6 billion (71.1%) covering the rest of the department’s normal non-COVID-19 related expenditure. More detailed statistics on the number of social protection recipients, beneficiaries and expenditure for 2021 are detailed in the annual Statistical Information on Social Welfare Services report.

Throughout 2021 the staff of the department adjusted to new work patterns, and environments, with ease and dedicated themselves to still achieving extremely high levels of productivity. We worked hard to continue with our traditional pre-budget forum in 2021, which I’m proud to say has been held every year for over 30 years. This forum offers a unique opportunity for the community and voluntary sectors and other stakeholders, to share their views on what they feel should be prioritised in the upcoming budget. Due of course to the public safety restrictions introduced to curb the spread of the virus, attendance was limited. Despite this, we were able to hold a physical event in Dublin Castle in July which was still a great success.

As we hopefully now move from pandemic response to pandemic recovery, I emphasised that we need to also refocus our efforts to not only providing income supports but on facilitating the return to work. With this goal in mind, both government and department are steadfast in our support of tens of thousands of people achieving employment through our new national employment strategy Pathways to Work 2021-2025.

Framed around the continued prevalence of COVID-19, Budget 2022 saw across-the-board increases in the recognition of the hugely difficult year that citizens, young and old, had endured. In total, a social protection budget package worth €558 million was secured; the largest social protection package in 14 years. Agreement was also secured for a 100% Christmas Bonus, at a cost of €289 million, being paid in December to 1.31 million people.

Other measures secured included a €5 increase in the maximum rate of all core weekly payments including, for example, the One Parent Family Payment, the Jobseeker's Transitional Payment, Maternity Benefit, Paternity Benefit, Adoptive Benefit and Parent's Benefit. Increased payments of €3 a week were also secured for qualified children 12 years of age and over, and increased payments of €2 per week were secured for those aged under 12, bringing the rates to €48 and €40 respectively.

An extension of Parent's Benefit was also achieved, providing an extra two weeks of paid leave for parents and brought the total amount offered to seven weeks from July 2022. The Living Alone Allowance was increased by €3 from €19 to €22 a week for over 230,000 pensioners, widowers, and people with disabilities. An increase in the Fuel Allowance payment by €5 was also realised, raising the payment from €28 to €33 per week which will benefit 400,000 low-income households.

Our investments in digital services and MyWelfare.ie complemented our operational innovation throughout 2021. The pandemic highlighted the important role that digital technology plays in the delivery of my department’s services, and these investments facilitated the prompt design, development, and delivery of new online services to a substantial number of customers in an extremely short period of time. In an age where traditional channels such as face-to-face consultations were restricted, customers began to turn to our digital services on a previously unprecedented scale to apply for income support payments quickly and easily.

MyWelfare.ie alone saw an increase in transactions from 2.8 million in 2020 to over 3 million in 2021. Many new services were also launched during the year, including the Working Family Payment, the Benefit Payment for Over 65-Year-Olds, and an online renewal service for the Public Services Card to name but a few.

Two of the primary objectives of my department are the reduction of poverty and the advancement of social inclusion. To this end, social transfers continued to perform in reducing the at-risk-of-poverty rate in 2021, with statistical reports indicating a poverty reduction effect of 70% and showing that Ireland consistently remains one of the best performing EU member states in reducing poverty through social transfers.

Furthermore, our pandemic income supports had a significant impact on the at-risk-of-poverty rate in 2021, being 11.6% when measured. This figure could potentially have reached 19.9% without the introduction of the pandemic income supports such as the Pandemic Unemployment Payment (PUP). In addition, the at-risk-of-poverty rate for persons living in one adult households with children was 22.8%, whereas it could have risen to 37.2% if income supports had not been in place. The consistent poverty rate also fell from 4.7% in 2020 to 4% in 2021 and the deprivation rate fell from 14.3% to 13.8% over the past year. This represents significant progress in reducing poverty and improving social inclusion in Ireland.

Also continuing its important work throughout 2021 was the Pensions Commission which published its report in October. In April, I signed the European Union Occupational Pension Scheme Regulations 2021 into Irish law, which provides for a number of improvements in the area of occupational pensions, such as stronger protections for pension scheme members and beneficiaries, in addition to the removal of obstacles to the provision of cross-border services and transfers.

We also made further progress in our work to introduce an automatic pension enrolment system based upon the Programme for Government commitments. The objective of this work is to encourage long-term saving among those who may otherwise experience a significant unwanted reduction in their living standards at retirement. During 2021, we continued to refine proposals for government on the final design of this system, these proposals were then considered and agreed by the Cabinet Committee on Economic Recovery and Investment during November and December. It is envisaged that the necessary legislative, organisational and process structures will advance in 2022 and 2023.

The introduction of Automatic Enrolment will see a transition from the current system, which is purely voluntary, to one which will, subject to certain parameters, automatically enrol employees into a quality assured retirement savings system. However, the person saving will retain the freedom of choice to suspend or entirely opt-out of their participation in the system. It is intended that the new system will be phased in over the next decade, allowing time for both employers and employees to adjust. It will also offer a contribution rate starting at only 1.5% of gross earnings for both employer and employee at the beginning of this phased process, rising by 1.5% every three years to a maximum of 6% by Year 10. The State will also top-up those contributions by €1 for every €3 saved by the employee.

April 2021 also saw the introduction of our very first Intreo Work and Skills Week virtual campaign. The campaign, called #ReStartWithIntreo, was timed to align with the then planned and phased reopening of the economy to provide employers, jobseekers and those interested in upskilling or reskilling with the information they needed to help them regain footing on their career path or in the restarting of their businesses.

Though COVID-19 has not disappeared from our lives and our society, we can now begin to optimistically look towards a brighter future because of the cooperation and diligence of our citizens in following the public health advice. The impact of COVID-19 on this country, on both our people and our public finances, cannot be understated. But now has come a time for us all to rebuild, to provide support to people who have lost their jobs or businesses by providing them with all the necessary care and compassion to help them on their path towards this brighter future. Nor will we stop in our resolve and commitment in providing supports to all that need them, when they need them.

All of this of course could not be done without the reliability, resilience, and commitment of all the staff within the department, of whom I am immensely proud. I am consistently impressed by their commitment to the department and to the people of Ireland, and this has never been more evident than during the pandemic. Their work in developing and implementing new income support schemes, in truly unprecedented numbers, was critical to the maintenance of social cohesion through successive public restrictions. I look forward to working with them and thank them all for their continued commitment to public service.

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