Willie Penrose (Longford-Westmeath, Labour)
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Question 134: To ask the Minister for Social and Family Affairs her views on extending the period of time, which persons in receipt of disability allowance can work, from 14 hours to 18 hours, in order to help them as part of the rehabilitation process; and if she will make a statement on the matter. [24246/08]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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Disability allowance is a means-tested weekly payment for people who are substantially restricted in taking up employment owing to an illness or disability that is expected to last for at least one year. However, where a person takes up employment that is considered to be rehabilitative in nature earnings from that employment may, be subject to a disregard that will exempt it from assessment as means.

No restrictions are placed on the number of hours that can be worked under the disregard and instead it operates so as to encourage the maximising of overall income that can be derived from the combination of disability allowance and earned employment.

As of June 1, 2006, the income disregard operates on the basis of a tapered withdrawal rate between €120 and €350. This means that all income up to €120 is disregarded as means when assessing entitlement, while income between €120 and €350 is assessed at a rate of 50 per cent. The effect of this tapered withdrawal rate is that a single person can earn up to €432.50 per week before their disability allowance fully ceases.

A review published by the Department of Social and Family Affairs in 2004 of the Illness and Disability Payment Schemes suggested that continually increasing the income disregard level is not the most appropriate answer to the disincentive problem. Instead, that review favoured introducing a mechanism which would allow for the gradual reduction of social welfare benefits as earnings increase, thereby allowing people who increase their earnings or employment potential to see an increase in the overall income level. This approach benefits those in employment, irrespective or the hours worked or hourly rate earned. Thus far, the change in the rules for assessing earnings from employment has resulted in a 40 per cent increase in the number of people availing of the earnings disregard and increasing their overall income level.