Recent energy price rises hit low-income households disproportionately with Government supports only offsetting part of the impact, a new report from the Economic and Social Research Institute has found.
The study said lower-income households spend a larger proportion of their income on energy, particularly on home heating oil, petrol and diesel.
It said increases in fuel and heating costs placed a heavier financial burden on the less well off.
In March and April the Government reduced excise on fuel, suspended the National Oil Reserve Agency levy, extended the fuel allowance and deferred an increase in the Carbon Tax.
The ESRI said that these measures reduced the immediate cost by half.
But it said it did not offset the “regressive nature of energy inflation”.
Dr Claire Keane, associate research professor at the ESRI, said: “While recent policy measures help to cushion the shock, their largely untargeted nature means that a significant share of the support goes to higher-income households.”
She added: “More targeted measures could better protect vulnerable groups at a lower cost.”
The report said that without the Government’s cost-of-living package, low-income households would have faced an energy prices rises which would have been the equivalent to 3% of their household income.
But high-income households would have faced an energy price increase of 1% of household income.
Speaking on RTÉ’s Morning Ireland, Ms Keane said that the research looked at the impact on people if the Government had not introduced supports.
“What we found was that overall, there’s around 2% extra of people’s take-home pay being spent on just the price increases alone, so quite sizable.
“But that’s different across different income groups,” she said.
Ms Keane said that based on the research, the ESRI would advise the Government to focus on more targeted measures.
“In the shorter term, we’d certainly be suggesting that you’d want to think about more targeting for going into winter with a lot of volatility and prices,” she said.
Ms Keane said that in the longer term, the reliance on fossil fuels needs to be thought about.
“We know that there’s huge volatility in the cost of those and really, that volatility really impacts upon lower income households who spend more on energy.
“What we’re finding is, unlike the previous cost of living packages, the gains are really felt by everybody right up the income groups, as opposed to previous measures where there was much more targeted support for those on lower incomes that could be facing into a winter of crunches if this volatility continues,” she said.
