Dáil debates

Thursday, 25 March 2021

Saincheisteanna Tráthúla - Topical Issue Debate

Wage Subsidy Scheme

7:35 pm

Photo of Willie O'DeaWillie O'Dea (Limerick City, Fianna Fail)
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I thank the Ceann Comhairle for allowing me to raise this important topic. The group of workers who are directly affected are some 2,600 workers throughout the country who suffer from a mild physical or mental disability and who, due to a Government initiative, have been allowed to join the workforce. The reason they have been able to participate in the workforce is because the Government supports the employer through the payment of their wages. This is known as the wage subsidy scheme, WSS, as opposed to the temporary wage subsidy scheme, TWSS, with which we are all familiar since the advent of the pandemic.

All of those people are working for the minimum wage. When the scheme was introduced, the rate of payment was about €5.30 per hour and, at the time it was introduced, the payment represented about 70% of the minimum wage. Because the minimum wage has increased progressively over the years, this payment has remained frozen and, as a result, it now represents only 50%.

Although I am talking about 2,600 people, my main focus has to be the group who have been employed up to now by a company called Rehab Logistics in the Raheen industrial estate in Limerick city. The company is in the process of making 37 people redundant and 30 of them are beneficiaries of the wage subsidy scheme. I have had detailed conversations with representatives of Rehab Logistics and they have informed me that because the WSS did not rise in tandem with the minimum wage increases, the operation in Raheen has racked up fairly large losses.

However, the group might be amenable to keeping those people on in their jobs if that situation were rectified.

A number of issues must be taken into account here. First, we have the worst record in the civilised world for employing people with mental or physical disabilities in the main labour force. Second, the EU public procurement directive of 2014, which allows countries to siphon off part of public contracts specifically to employ disabled people, has never been used in this country. Most public bodies, including my own county council in Limerick, do not even know of its existence. Third, for the people I am representing here tonight, their job is their life. Many of them have aged and infirm parents. I have heard heart-rending pleas from those parents not to take away the lives of their offspring. Despite their disability or handicap, these people feel immensely proud and privileged to be part of the workforce. We must also take into account the fact that there is a very specific and clear commitment in the programme for Government not only to improve the opportunities for people with a disability to become part of the workforce but also to retain those who have managed to achieve that status. The supreme irony here is that if they cease to be part of the workforce they will be entitled to receive social welfare in the form of the disability allowance, which according to my calculations will cost the State more. In that situation, the Department of Children, Equality, Disability, Integration and Youth will also have to intervene to help them in various ways and that will add further costs for the taxpayer. It will cost the taxpayer more to put these people on the scrapheap than to keep them in gainful employment. That is reprehensible.

If the Minister, for some reason, is not disposed to increase the rates from €5.30 per hour under the WSS, I suggest the Government should look carefully at the potential for a disability CE scheme here. I understand there is spare capacity in that area. Perhaps these people could be accommodated in that way so they can continue to live their lives.

7:45 pm

Photo of Damien EnglishDamien English (Meath West, Fine Gael)
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I thank Deputy O'Dea for raising this issue and for giving me the opportunity, on behalf of the Department, to outline the position. The Deputy's question relates specifically to Raheen in Limerick but is also concerned with the WSS in general so I will try to address both the national and local aspects of this.

The WSS is an employment support to private sector employers, the aim of which is to encourage employers to employ people with disabilities and so increase the number of people with disabilities obtaining and sustaining employment in the open labour market. This is something that we really want to achieve as a Government, as Deputy O'Dea has just outlined. The scheme provides financial incentives to hire people with a disability for between 21 and 39 subsidised hours per week under a contract of employment. Expenditure on the WSS in 2021 is expected to be almost €26 million. Just under 1,600 employers receive subsidies under the scheme in respect of some 2,600 workers. It is a demand-led scheme and it is open to any employer to come forward and avail of the scheme.

The WSS is different from sheltered employment or occupational activity arranged for therapeutic reasons. The majority of employers who avail of the scheme employ workers in commercial activities and in roles that are open to all workers, not just to people with disabilities. The basic rate of subsidy is €5.30 per hour giving a total annual subsidy available of €10,748 per annum based on a 39-hour week. Where an employer has 23 or more WSS employees, a top-up is applied and the payment rate increases to €7.95 per hour for each employee. The subsidy rate is not linked to the statutory minimum wage. It is a contribution paid to the employer, subject to certain conditions, against the cost incurred where a productivity shortfall arises from a disability. There are different strands in that space. The contract of employment offered must be for a minimum of six months and the employee is subject to and has the same rights, in accordance with the conditions of employment, as any other employee. Included in these conditions is the requirement that the employee must be paid the going rate for the job which must be at least the statutory minimum wage.

I am aware of the redundancies recently announced at the facility at Raheen in Limerick referred to by Deputy O'Dea. I extend my sympathy and that of the Minister, Deputy Humphreys, to the workers in the Rehab Logistics facility who are facing redundancy. I fully appreciate how difficult the situation is for those involved and for their families. Deputy O'Dea and others have raised their plight and the Departments of Social Protection and Enterprise, Trade and Employment are working to try to find a solution. We are happy to engage in conversations with others to try to assist in any way we can.

The Department of Social Protection is already paying a subsidy of almost 78% of the wages of 35 employees of this particular company. A further position is subsidised under strand 3. This is in addition to significant funding provided by the HSE. Between January and December 2020, the Department paid a total of over €2.3 million in subsidies to the Rehab Group across its various locations, including Limerick. The payments made to the Rehab Group account for 13.5% of the overall payments made by the WSS in 2020. The Department is trying to provide an important service in conjunction with the Rehab Group.

At a local level, dedicated staff in the Department have been assigned to work directly with the employees affected by the redundancies at Raheen in Limerick to ensure they receive their proper entitlements and appropriate supports. The Departments of Social Protection and Enterprise, Trade and Employment are examining the situation to see what more can be done. Deputy O'Dea has made some suggestions in that regard tonight which I will feed back into the system. The Department of Health is also involved in the context of supporting day-care arrangements that may be required by some, but not all, of the workers.

There is a commitment in the programme for Government to fine-tune and expand targeted employment schemes such as the WSS to help more people with disabilities to stay in the workforce. With this in mind, the Department of Social Protection will be carrying out a review of the WSS this year. That work has commenced already. Again, I am happy to engage with Deputy O'Dea on some of the solutions he has put forward this evening and to discuss them with the Minister for Social Protection and the Tánaiste.

Photo of Willie O'DeaWillie O'Dea (Limerick City, Fianna Fail)
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I thank the Minister of State for his response. I spoke briefly to the Minister for Social Protection earlier and she undertook to consider my suggestion that, at a very minimum, a CE scheme for the disabled should be established here. This is not a political matter as far as I am concerned. I am raising this in a non-adversarial, apolitical way. Most of the people who are losing their jobs in Rehab Logistics are not even in my constituency. The factory is located in my constituency but most of the staff are from parts of County Limerick that I do not represent, as well as from Cork, Clare and Tipperary. I have a personal interest in this because I know those people. I have gotten to know them and their families over the years. They are beautiful people to whom life has dealt a very bad hand. In most cases they were born with a mental or physical disability and that has affected how they live their lives. Their lives have been greatly enhanced as a result of being elevated to a position where they can participate in the economic life of their own country and it makes no sense whatsoever to deprive them of that opportunity, particularly when it will not cost the State a single penny. In fact, it will probably cost the State to put them on the scrapheap. Many of the people in question are now in middle age and I do not envisage them getting work again. Some of their parents and carers are infirm and elderly and are literally pleading with their local representatives to do something to save their employment so they can continue to have something to get up for in the morning.

Before concluding, I must say I am aware that SIPTU has taken the Rehab Group to the WRC twice in the last few weeks. I abhor and deplore the attitude that Rehab is taking in this particular case. It is not the function of the Rehab Group to turn its back on these people, to try to walk away from them and to give them reduced redundancy payments, which it is attempting to do at the moment. The job and function of the Rehab Group is to look after and enhance the lives of those unfortunate people.

Photo of Damien EnglishDamien English (Meath West, Fine Gael)
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I understand why Deputy O'Dea has brought this to the floor of the House and I know it is not a political issue for him at all. Deputy O'Dea and other Deputies and Senators from the area have raised this matter directly with Ministers because they genuinely care.

This employment opportunity has been very beneficial for those who avail of the scheme and the support. To be clear, the approach to this is not in any way a cost saving exercise from the Department or the Government.

The design of the wage subsidy scheme and what it is there to achieve in this regard is to encourage the employment of people who have a disability into employment in a commercial enterprise. It is not designed as a business or enterprise support. To fit into the design of the scheme it therefore must be an incentive to encourage employment. It is not to support the business. The business has to be able to stand alone on its own two feet as a commercial operation. That is part of the issue here.

This does not mean that we cannot try to find other solutions. The Deputy suggested one scheme but the wage subsidy scheme and the community employment scheme are other solutions. The Deputy will be aware, and I can inform the House, that our Department and the various arms and agencies of Government have been engaged directly with the unions, the employees and their families along with the Rehab Group to try to work our way through this to find any solution. We would be very happy to do that and it is something we would like to do. Deputy O'Dea is aware of that. He spoke directly on this issue with the Minister, Deputy Humphreys, as have I. We will go through it. The Department officials and the Intreo offices locally have engaged and would like to be able to find solutions either to try to keep these jobs or to find new jobs, and certainly to work with all involved to do that. This is what we are committed to doing. The request to link the wage subsidy scheme to the minimum wage is not the real issue here. I am aware that it has been put forward as a genuine attempt to find a solution but that is not the space we are in. We will try to work with the Deputy to find other solutions also.

7:55 pm

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Kildare South, Ceann Comhairle)
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Gabhaim buíochas leis na Teachtaí ar fad as a gcomhoibriú i rith na seachtaine.

The Dáil adjourned at 8.52 p.m. until 10 a.m. on Wednesday, 31 March 2021.