Figures and tables in SWITCH: A Tax-Benefit Model for Ireland Linked to Survey and Register Data

Abstract

This paper describes the development and operation of the SWITCH model, a tax-benefit microsimulation model for Ireland which is linked to survey and register data. SWITCH is based on the EUROMOD platform but has important advantages over the Irish component of EUROMOD, including a “current income” concept, detailed information on benefit receipt in the underlying data and the modelling of non-cash benefits. We discuss the process of creating an input dataset, including reweighting and uprating. We validate the model’s simulation of the income distribution with respect to a range of external sources and suggest future improvements.

This article contains 1 figure and 7 tables.

Figures

**Figure 1.** The proportion of workers receiving the PUP and the wage subsidy by gender and age category in August 2020. Note: SWITCH simulations are based on v2.1 F indicates female, M indicates male.

Tables

Table 1. Uprating Factors

Index	Source	Income components uprated
Average earnings per week, €	https://cso.ie/px/pxeirestat/Statire/SelectVarVal/Define.asp?maintable=EHQ03&PLanguage=0	Employment income
Self-employed income (2006=1)	https://www.cso.ie/px/pxeirestat/Statire/SelectVarVal/Define.asp?maintable=RVA01&PLanguage=0 up to 2018, GNP per capita after 2018	Self-employed income
GDP per capita (2007=1)	https://statbank.cso.ie/px/pxeirestat/Statire/SelectVarVal/Define.asp?maintable=NQQ40&PLanguage=0	Investment income
	https://cso.ie/px/pxeirestat/Statire/SelectVarVal/Define.asp?maintable=PEA01&PLanguage=0
Consumer price index (2007=1)	https://www.cso.ie/px/pxeirestat/Statire/SelectVarVal/Define.asp?maintable=CPA01&PLanguage=0	Non-simulated benefits, asset income, benefit-in-kind, expenditure.

Table 2. Control Totals Used in Weighting Process

SILC control totals	SWITCH control totals	Source for controls
Household location (8 NUTS3 regions)	Household location (8 NUTS3 regions)	LFS (CSO Ireland)
Household composition	Household composition	LFS (CSO Ireland)
Demographics: 4 age groups by sex	Male demographics: 4 age groups	Projected Census (CSO Ireland)
	Female demographics: 5 year-band age groups up to 64 and one for all above 65 years old	Projected Census (CSO Ireland)
	Employment and unemployment levels	LFS (CSO Ireland)
	Forecasted income distribution for employees and self-employed	Office of the Revenue Commissioners
	Number of recipients of key benefits	Annual Statistics Report of the Department of Social protection

Table 3. Simulated and non-simulated social welfare schemes

Scheme	Simulation Status
Child Benefit	Fully Simulated
Early Childhood Care & Education Scheme	Fully Simulated
Job Seekers Allowance	Fully Simulated
Job Seekers Benefit	Fully Simulated
Jobseekers Transitional Payment	Fully Simulated
Maternity Benefit	Fully Simulated
National Childcare Scheme	Fully Simulated
One-Parent Family Payment	Fully Simulated
Pandemic Unemployment Payment	Fully Simulated
Rent or Mortgage Supplement	Fully Simulated
State Pension (Non-Contributory)	Fully Simulated
Temporary Wage Subsidy Scheme	Fully Simulated
Widow’s Non-Contributory Pension	Fully Simulated
Working Family Payment	Fully Simulated
National Childcare Scheme	Fully Simulated
Early Childhood Care and Education Scheme	Fully Simulated
Medical and GP visit card	Fully Simulated
Employment Wage Subsidy Scheme	Fully Simulated
Pandemic Unemployment Payment	Fully Simulated
Carer’s Allowance	Part-simulated
Disability Allowance	Part-simulated
Fuel Allowance	Part-simulated
Illness Benefit	Part-simulated
Injury Benefit	Part-simulated
Invalidity Pension	Part-simulated
State Pension (Contributory)	Part-simulated
State Pension (Transition)	Part-simulated
Supplementary Welfare Allowance	Part-simulated
Widow’s Contributory Pension	Part-simulated
Education Grant (from FAS)	Non-simulated
Grants/Education (Training) Allowances	Non-simulated
Household Benefits Package	Non-simulated
Minor Social Assistance Benefits*	Non-simulated
Non-Irish Social Welfare Payments	Non-simulated
Residual Family Allowances†	Non-simulated

This aggregate benefit is composed of monies received from charities and local government

This aggregate benefit is composed of Back to School Clothing & Footwear Allowance, Carer’s Benefit, Deserted Wife’s Allowance, Deserted Wife’s Benefit, Guardian’s Payment Contributory, Guardian’s Payment Non-Contributory, Special Diet Supplement

Table 4. Number of Taxpayer Units by Income Bands - Employees and Self Employed

Gross Annual Income Range	2019 Admin Estimates*	SILC 2019 weight†		SWITCH revised 2019 weight
		N	Ratio to 2019 Admin	N	Ratio to 2019 Admin
10000 - 12000	83,398	67,995	82%	83,398	100%
12000 - 15000	128,504	77,999	61%	128,504	100%
15000 - 17000	87,411	57,914	66%	87,411	100%
17000 - 20000	132,041	93,864	71%	132,040	100%
20000 - 25000	222,622	148,259	67%	222,622	100%
25000 - 27000	90,614	60,305	67%	90,614	100%
27000 - 30000	128,098	81,699	64%	128,098	100%
30000 - 35000	197,218	124,738	63%	197,218	100%
35000 - 40000	175,005	120,624	69%	175,005	100%
40000 - 50000	246,907	169,937	69%	246,907	100%
50000 - 60000	176,301	150,004	85%	176,301	100%
60000 - 70000	129,339	100,134	77%	129,339	100%
70000 - 75000	52,152	34,144	65%	52,152	100%
75000 - 80000	44,201	31,987	72%	44,201	100%
80000 - 90000	69,282	64,746	93%	69,283	100%
90000 - 100000	51,727	76,357	148%	51,726	100%
100000 - 150000	118,559	121,949	103%	118,559	100%
150000 - 200000	33,656	33,653	100%	33,656	100%
200000 - 275000	17,014	13,797‡	81%	17,014‡	100%
Over - 275000	16,264	10,380‡	64%	16,264‡	100%

Source: Office of the Revenue Commissioners available at https://www.revenue.ie/en/corporate/information-about-revenue/statistics/income-distributions/income-tax-distributions-interactive-tables.aspx

The last year for which data about the income distribution are available from Revenue is 2018. To align available information about income with the year of collection of the SWITCH input data, we forecasted the 2019 income distribution. The forecasted income distribution was created by applying the average annual change for years 2015 to 2018 to each income band to 2018’s income distribution.

The weight used in this analysis is the one described in CSO SILC 2019 i.e., it is based on demographics (4 age groups by sex), household location (8 NNUTS3 regions) and household composition.

Statistics of lower statistical reliability due to low number of unweighted observations (30-50).

Table 5. Benefit Recipient Numbers Comparison, 2019

		(1)	(2)		(3)		(4)		(5)		(6)
Scheme type	Scheme Name	2019 Admin*	EUROMOD 2019†		SWITCH revised 2019 weight (output data)		SWITCH revised 2019 weight (input data)		SILC 2019 weight (output data)		SILC 2019 weight (input data)
			N	Ratio to 2019 Admin	N	Ratio to 2019 Admin	N	Ratio to 2019 Admin	N	Ratio to 2019 Admin	N	Ratio 2019 to Admin
*Pensions*	State Pension (Contributory)‡	367,133	358,098	98%	356,998	97%	367,133	100%	365,237	99%	634,000	173%
	State Pension (Non-Contributory)	94,854	89,117	94%	86,122	91%	94,954	100%	84,846	89%	71,000	75%
	Widow’s Pension (Contributory)‡	115,152	128,898	112%	128,898	112%	115,152	100%	115,152	100%	31,000	27%
	Widow’s Pension (Non-Contributory)‡	1,373	§	§	§	§	§	§	§	§	9,000	655%
*Working age income support*	Supplementary Welfare Allowance	15,770	16,302¶	103%	§	§	15,770¶	100%	§	§	0	0%
	Jobseeker’s Allowance	123,633	164,390	133%	148,097	120%	123,633	100%	85,139	68%	231,000	187%
	Jobseeker’s Benefit	34,141	41,523	122%	41,523	122%	34,141	100%	34,141	100%	112,000	328%
	One Parent Family Payment	39,533	37,405	95%	42,389	107%	39,533	100%	46,006	116%	107,000	271%
	Maternity Benefit	21,279	18,184 ¶	85%	37,681	177%	20,209 ¶	95%	37,964	178%	16,000	75%
*Illness, Disability & Caring*	Carer’s Allowance	84,028	98,877	118%	97,998	117%	87,559	104%	85,148	101%	n/a	n/a
	Illness Benefit	49,313	48,142	98%	46,958	95%	49,313	100%	47,811	97%	4,000	8%
	Invalidity Pension	58,168	53,025	91%	53,025	91%	58,168	100%	58,168	100%	197,000	339%
	Disability Allowance	146,755	178,104	121%	166,664	114%	146,755	100%	136,431	93%	157,000	107%
	Injury Benefit	1,314	§	§	§	§	§	§	§	§	5,000	381%
*Child-related payments*	Working Family Payment	53,104	47,564	90%	54,243	102%	53,104	100%	58,066	106%	15,000	28%
*Child-related payments*	Child Benefit	637,007	**		695,878	109%	**		675,319	106%	688,000	108%

Source 2019 SISWS file: https://www.gov.ie/en/publication/02f594-annual-sws-statistical-information-report/

Source: EUROMOD Country Report Ireland 2018-2021, Table 4.7. Recipient numbers are rounded to the nearest thousand.

SISWS 2019 figures adjusted to exclude recipients living outside the state and those living in long-term residential care.

Statistics are disclosed due to small sample sizes to ensure adherence to CSO Statistical Disclosure Control rules.

Lower statistical reliability due to a small number of unweighted observations.

Child benefit is reported at a child level in the SILC data but at a recipient (i.e. parental) level in SWITCH and in administrative data, so the SILC input observations are excluded due to non-comparability.

Table 6. Benefit Expenditure Comparison, 2019 (€, thousands)

		(1)	(2)		(3)		(4)
Scheme type	Scheme Name	2019 Admin Numbers*	SILC 2019 weight (output data)		SWITCH revised 2019 weight (output data)		EUROMOD 2019†
			Expenditure	Ratio to 2019 Admin	Expenditure	Ratio to 2019 Admin	Expenditure	Ratio to 2019 Admin
*Pensions*	State Pension (Contributory)‡	5,603	4,959	89%	5,052	90%	9,137	163%
	State Pension (Non-Contributory)	1,043	1,021	98%	994	95%	894	86%
	Widow’s Pension (Contributory)‡	1559	1,685	108%	1,489	96%	356	23%
	Widow’s Pension (Non-Contributory) ‡	14	§	§	§	§	72	516%
*Working age income support*	Supplementary Welfare Allowance	120	§	§	§	§	1	1%
	Jobseeker’s Allowance	1,629	1,643	101%	931	57%	1,501	92%
	Jobseeker’s Benefit	348	351	101%	280	80%	400	115%
	One Parent Family Payment	533	497	93%	485	91%	1,329	249%
	Maternity Benefit	267	174	65%	163	61%	113	42%
*Illness, Disability & Caring*	Carer’s Allowance	863	1,032	120%	900	104%	n/a	n/a
	Illness Benefit	607	575	95%	561	92%	27	4%
	Invalidity Pension	728	692	95%	773	106%	2,540	349%
	Disability Allowance	1,706	1,957	115%	1,530	90%	1,799	105%
	Injury Benefit	14	§	§	§	§	41	301%
*Child-related payments*	Working Family Payment	397	260	66%	232	58%	80	20%
*Child-related payments*	Child Benefit	2,103	2,067	98%	1,992	95%	2,034	97%

Source 2019 SISWS file: https://www.gov.ie/en/publication/02f594-annual-sws-statistical-information-report/

source: EUROMOD Country Report Ireland 2018-2021, Table 4.8.

SISWS 2019 figures adjusted to exclude recipients living outside the state and those living in long-term residential care

Statistics are disclosed due to Secondary Disclosure Controls.

Table 7. Non-Cash Benefits Comparison

Non-cash Benefit	2019 Admin Numbers	SILC 2019 weight (output data)		SWITCH revised 2019 weight (output data)
		N	Ratio to 2019 Admin	N	Ratio to 2019 Admin
Medical Card	1,544,374*	1,389,272	90%	1,004,881	65%
GP Visit Card	524,494*	573,932	109%	659,999	126%
Early Childhood Care & Education Scheme	118,896†	71,656	60%	75,635	64%
National Childcare Scheme	62,686‡	154,926	247%	5,441	264%

source: https://www.hse.ie/eng/staff/pcrs/pcrs-publications/annual-report-2019.pdf p.16-17.

source: data for 2017 from DCEDIY.

source: administrative numbers for the monthly average participants between 2019-2020 from DCEDIY.