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Investment in Qualitybottom 30 per cent of the income distribution saw gains of 2 to 4 percent, but higher gains of 7 to 9 per cent were recorded by the lowermiddle,middle and upper reaches of the income distribution.Focusing on the Budgets of 1999, 2000 and 2001, it was Budget1999 that moved tax policy towards tax credits, via a standard-ratedpersonal allowance, and the Budget in which resources wereconcentrated on increasing the standard-rated personal allowance. Itis this latter feature which helped to focus gains on the middle of thedistribution, rather than its upper reaches. In Budget 2000, theaverage gain in disposable income across all families was just under3 per cent, measured against the wage indexation benchmark. Thepoorest one-fifth of family units did not share in this gain, withlosses (relative to wage indexation) for the poorest one-tenth.Middle and upper income family units gained approximately thisaverage, or slightly above. The relatively low gains for the poorestincome groups reflect the balance that was struck between increasedwelfare expenditure and tax cuts. The upper reaches of the incomedistribution gained more from tax rate cuts and the widening ofbands.On the other hand, post-budget adjustments—such as the PRSIexemption limits and the Home Carer’s Allowance—were ofgreatest proportionate benefit to the lower and middle reaches of theearnings distribution. Budget 2001 gave rise to an average gain ofclose to 3 per cent above the indexation benchmark. Low incomegroups fared 1 or 2 per cent better than wage indexation on average,but middle and higher income groups saw still greater gains. Mostother income groups saw a gain of close to 3 per cent, with gainsclose to 4 per cent in the fifth and ninth deciles. These estimatestake account of the main changes in income tax rates, tax credits andthe standard rate band (including the further individualisation of theband). They also include the main changes in social welfarepayment rates. Among the items not included is the distributiveimpact of the Special Savings and Investment Scheme.Summary of the Influences on Income DistributionIn Ireland, over the period since 1987, a period in which average124