There has been considerable increase in the cost of a Minimum Essential Standard of Living (MESL) across all household types according to a new report from the Vincentian MESL Research Centre at the Society of St Vincent de Paul (SVP).
MESL captures the change in the cost of the minimum basket of goods and services needed to enable people to live with dignity.
In the 12 months to March 2023, the core MESL cost increased by an average of 10.6% nationally according to the latest annual report.
It was 12.9% for urban based households and rose by 5.7% for rural households.
MESL research shows the rate of increase is higher in urban areas than rural areas primarily because of rising gas prices for urban home energy needs.
The cumulative increases in core MESL costs, over three years to March 2023 were 18.9% nationally.
This is broken down as 17.8% for households in urban areas and 21.2% for households in rural areas.
MESL researchers say the overall level of change has been primarily driven by the rising cost of home energy (over the last two years) and food in the year to March 2023.
The analysis finds that cost of the MESL food basket has increased by an average of 20.8%, in the year to March 2023 and that the food basket is more exposed to increases in staples such as milk, butter and bread which have each increased significantly in price.
Rising gas and electricity prices have pushed the energy basket in urban home energy costs up an average of 67.8%.
A reduction in home heating oil prices combined with rising electricity prices have seen rural energy costs rise by 6.2% in the year to March 2023.
MESL Research Manager Robert Thornton said: "Cumulatively, from March 2020 to March 2023, the MESL home energy costs increased by 117.1% for urban based households and by 75.8% for rural based households.
"Previously, the MESL analysis has found that rural home energy costs (based on the use of home heating oil) were higher than urban home energy costs (based on the use of natural gas), this position has now reversed."
The report also identifies the rising risk of energy poverty.
This is due to the base rate of income supports generally, and particularly energy related supports (Fuel Allowance and Household Benefits Package), not being maintained relative to rising energy and minimum living costs.
While the majority of MESL basket categories showed an increase in costs, there were decreases for rural based households in Transport and Car Insurance of 0.9% and 5.7% respectively.
Education is notable with an average decrease of 6%, this is primarily due to the introduction of the new Free Primary Schoolbooks Scheme.
According to the report while the "extraordinary" inflation levels peaked in October 2022, the current levels remain "extremely high".
Current forecasts indicate the potential for approximately 6.3% increase in MESL costs over the remainder of 2023 and into 2024.
While this report focuses on the position of minimum living costs and adequacy of incomes in 2023, a tranche of once-off supplementary payments were announced alongside Budget 2023.
These were paid to households in the last quarter of 2022 in response to the rapid inflationary pressure which developed over the course of 2022.
Mr Thornton said an overview of the effects of these additional supports found that the package of additional once-off supports supplemented the base social rates in 2022.
"Consequently, the trend of income adequacy and inadequacy remained relatively stable between the first and last quarter of the year, despite the significant increase in MESL costs over the period in question," he said.
