Dáil debates
Thursday, 7 December 2023
Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
Employment Support Services
10:30 am
Donnchadh Ó Laoghaire (Cork South Central, Sinn Fein)
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90. To ask the Minister for Employment Affairs and Social Protection if she will consider reviewing the wage subsidy scheme for people with disabilities, in particular the fact that the subsidy an employer is paid has not kept pace with the increases in the minimum wage. [54238/23]
Donnchadh Ó Laoghaire (Cork South Central, Sinn Fein)
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Tá mé ag cur ceist ar an liúntas pá do dhaoine le míchumas. This question relates to the wage subsidy scheme and I raised it previously in committee with the Minister for Social Protection. Concern has been expressed that the wage subsidy scheme has not kept pace with the increases in the minimum wage, thus reducing the differential advantage for employers to take on people with disabilities.
Joe O'Brien (Dublin Fingal, Green Party)
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The wage subsidy scheme is an employment support to private sector employers, the objective of which is to encourage employment of people with disabilities in the open labour market. There are currently 1,515 employers on the scheme in respect of some 2,436 participant employees. Estimated expenditure on the wage subsidy scheme in 2023 is €24 million.
To claim a subsidy under the scheme, the private sector employer must offer employment to a person with a disability for at least 21 hours per week and up to 39 hours per week. The contract of employment must be for a minimum of six months and the employee should be subject to and have the same conditions of employment as any of the employer's other employees. It should be noted that the subsidy rate contribution under this scheme is not linked to the statutory minimum wage. It is a subsidy provided, subject to certain conditions, to encourage greater employment participation by disabled people.
As part of budget 2022, we increased the rate of the wage subsidy scheme paid to employers from €5.30 to €6.30 per hour. This gives a potential total annual subsidy of €12,776 based on a 39-hour week. The Department is currently undertaking a review of the scheme under the comprehensive employment strategy for people with disabilities. As part of this review, an extensive public consultation exercise was undertaken. Officials are currently compiling the analysis from the consultation and working on completing the report, which we expect to be finalised over the coming months. In the meantime, in anticipation of recommendations in the review, we have made provision in budget 2024 to decrease the minimum hours from 21 to 15, which was a key issue raised by stakeholders in the consultation. I expect this change to be operationalised in the first half of next year.
Donnchadh Ó Laoghaire (Cork South Central, Sinn Fein)
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This is an important scheme. It creates an incentive for employers to take on people with disabilities and reduces any costs that might be associated with same. It makes it easier for employers to take on people with disabilities, which is important given the unemployment rate among people with disabilities. There are lots of obstacles to employment, some of them cultural and others more structural. We have very low employment rates and schemes like this are a very important part of the solution. They are not the whole solution but are certainly part of it.
We welcome the fact that the minimum weekly hours threshold is being reduced from 21 to 15. That makes sense and is a good move but there is no mention of the subsidy rate being increased. The Minister of State has said the rate is not linked to the minimum wage but it probably should be. The minimum wage is currently €11.30 but will soon rise to €12.70, which is an increase of €1.40. The subsidy is €6.30 so we are effectively eating into that by €1.40. That is effectively what is happening because it is not keeping pace. The advantage to employers, which is important to encourage them to go out and find people with disabilities and take them on, is substantially reduced if it does not keep pace.
Joe O'Brien (Dublin Fingal, Green Party)
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We had a four-week consultation process in June with people with disabilities, employers and the public and received over 1,000 submissions. As part of the budget we allocated an additional €3.7 million to expand the scheme. This will reduce the minimum number of hours required. The increase in the previous budget was a significant one and we are now in a situation where employers are getting almost half of the minimum wage, which is substantial. I expect that increased awareness of, and improvements to, the scheme on foot of the review will increase the demand from employers in 2024. The additional funding allocated will be required to meet the extra demand. Administrative and IT work is under way to implement this change in quarter 2 of 2024. Any further revisions to the scheme will be carried out in the context of the recommendations contained in the final report.
Donnchadh Ó Laoghaire (Cork South Central, Sinn Fein)
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If we are hoping that employers are taking long-term decisions when they decide to take on people with disabilities, which we should be, then we need to offer them a certain amount of predictability. I know the subsidy is not currently linked to the minimum wage but the Government should consider linking the two. I appreciate that the subsidy is not small and that it was increased. It should be noted that it is not just employers who are concerned about this issue. Organisations representing people with disabilities are quite concerned about it as well and have raised it with me. The fact is that employers who have taken on people with disabilities are very obviously €1.40 per hour less well off than they were under the previous minimum wage. That is statistically the case. Surely the Minister of State will accept that the differential advantage has been eroded. Is this going to be examined over the course of the next 12 months? Will the Department consider linking the two? It would be logical that they should keep pace and that the advantage and incentive remains the same.
Joe O'Brien (Dublin Fingal, Green Party)
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It is important that we look at all barriers that people with disabilities face in trying to access employment. The wage subsidy scheme is an important assistance to employers and employees to get through some of those barriers. The Department recognises the additional challenges that some people with disabilities may experience in securing and maintaining employment and contracts a specialist employment service, called EmployAbility, to help to address this. A job seeker with a disability who is working with his or her Intreo employment personal adviser may be referred to the specialist service if it is agreed that he or she will benefit from the type of service and support provided. Under EmployAbility, the person works with a job coach who provides both pre-employment and in-employment support and assistance. Providers also deliver a recruitment and job matching service for employers.
In July 2022, Intreo commenced an early engagement process targeted at young recipients of a disability payment. Early engagement involves the public employment service actively engaging with people with disabilities at the earliest opportunity on a voluntary basis, importantly, to offer the above supports to assist them in achieving their employment ambitions.