In a special article on the impact of all budgets between 2008 and 2014, the ESRI found that the so-called squeezed middle has been squeezed — but not by as much as other sectors of society.

Across those budgets, the top 10% of earners have seen the greatest losses, at 15.5% — just ahead of the lowest income group, which has experienced an almost 13% loss in income in the same period.

Yet while the top 10% of earners will see their income increase by around 0.5% thanks to the latest budgetary measures, the bottom 10% are the biggest losers, likely to lose around 1% of income in 2015.

The findings were described by Sean Healy of Social Justice Ireland as “totally unacceptable” and potentially dangerous for society.

“We are well down the line to developing a deeply divided two-tier society,” he said, adding that such societies “tend to be unstable”.

Using its tax-benefit model called SWITCH, the article’s authors based their projections on forecasted wage growth next year of 1.4%, and said growth in wages between 2008 and 2015 is expected to be less than 0.5%.

The report focuses on “policy-induced losses” and also incorporates the most recent, revised water charges regime outlined by the Government last month.

According to the report: “Net incomes for the 10% of households with the lowest incomes are expected to be close to 1% lower under 2015 policy than under an indexed 2014 policy.”

While the net incomes for middle-income groups are virtually unchanged thanks to Budget 2015, there will be “small percentage gains for high-income households: just over 0.5% for the top income group”.

It states that the gains for the highest income group would have been even more pronounced had a new, higher Universal Social Charge rate not been introduced to counterbalance the cut in the top rate of tax.

In its appraisal of budgets from 2009 to 2015, the report finds that the greatest percentage losses are for the highest income group, at 15.5%, and the lowest income group, at almost 13%; and that no group escaped, with losses of between 10% and 11% for most other income groups.

It found the unemployed, lone parents, and those who are sick or have a disability were hardest hit by the latest budget, while single unemployed people with no children lost 22% of their income between 2009 and 2015.

“At the lowest levels, reductions in welfare payment rates, property tax, and water charges play significant roles,” it states.

Mr Healy said the Government had “deliberately” made decisions which had impacted negatively on the lowest income groups. “It is a totally unacceptable approach to policy and a totally unacceptable outcome,” he said.

- The Economic and Social Research Institute’s Special Article on the Distributional Impact of Tax, Welfare, and Public Service Pay Policies: Budget 2015 and Budgets 2009-15 is published today.