David Cullinane (Waterford, Sinn Fein)
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678. To ask the Minister for Employment Affairs and Social Protection the estimated cost of reforming the wage subsidy scheme as per the all-party Oireachtas disability group recommendation; and if she will make a statement on the matter. [21392/20]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The Wage Subsidy Scheme is an employment support to private sector employers, the objective of which is to encourage employers to employ people with disabilities and thereby increase the numbers of people with disabilities obtaining and sustaining employment in the open labour market. The scheme provides financial incentives to private sector employers to hire people with a disability for between 21 and 39 subsidised hours per week under a contract of employment.

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. The contract of employment offered must be for a minimum of 6 months and the employee should be subject to and have the same rights as per the conditions of employment as any of the other employees. 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. The subsidy rate contribution under this scheme is not linked to the statutory minimum wage - it is a subsidy claimed, subject to certain conditions, against the cost incurred where a productivity shortfall arises from a disability.

The financial supports for employers are structured under three separate strands and companies could benefit under one strand or under two or three strands simultaneously, as the case may be, depending on the number of people with a disability employed, as below.

- Strand I is a general subsidy for any perceived productivity shortfall in excess of 20% for a person with a disability, in comparison to a colleague without a disability. The subsidy is based on the number of hours worked.

- Strand II subsidy is payable when an employer employs three or more people with disabilities who are supported by a Wage Subsidy Scheme Strand I payment. Strand II is intended to cover the additional supervisory, management and other work based costs relating to such employees. This top-up payment is a percentage of the Strand I subsidy and is based on the overall number of employees with a disability employed under Strand I. It ranges from an additional 10% of wage subsidy for 3 to 6 employees with a disability to a maximum of 50% of wage subsidy for 23+ employees with a disability. Therefore when an employer has 23 or more Wage Subsidy Scheme employees a 50% top-up is applied to the hourly rate increasing the payment rate to €7.95 per hour for each employee.

- Strand III subsidy enables employers who employ 25 or more workers with a disability on the Wage Subsidy Scheme to be eligible for a grant of up to €30,000 per year towards the expense of employing an Employment Assistance Officer to support these employees.

Estimated expenditure on the Wage Subsidy Scheme in 2020 is expected to be in the region of €24 million. Based on current participant numbers, increasing the current base hourly rate of subsidy from €5.30 to €7.07 (70% of minimum wage level) is estimated at an additional annual cost in excess of €8.7 million, including the knock-on effect of the percentage increases arising due to payment of Strand II.

The Wage Subsidy Scheme is designed to encourage private sector employers to offer substantial and sustainable employment to people with disabilities by providing financial incentives to employers who offer employment of at least 21 hours per week. It is not designed as a subsidy for part-time work offered. It is not possible to provide a reliable estimate on the cost of reducing the minimum number of hours worked under the Wage Subsidy Scheme from 21 to 15. The WSS is a demand-led scheme, there is no way of predicting with any degree of accuracy the increased costs resulting from an increase in employers applying for a wage subsidy in respect of part-time employees.

Through the Comprehensive Employment Strategy, the Government recognises the importance for people with disabilities of participation in employment. As part of the Strategy, my Department is committed to improving employment outcomes and removing barriers to employment for persons with disabilities. The supports provided have been designed to enable people with a disability to achieve their employment ambitions by focusing on the individual’s ability and capacity. The Department offers a range of supports to people with disabilities who may not be in a position to, or wish to, work full-time. Some of these supports include:

- The Department’s INTREO service is available to any person with a disability who wishes to avail of the service. People with a disability may, on a voluntary basis, seek an appointment with an employment supports case officer to discuss their employment ambitions and develop a personal progression plan. Staff in Intreo offices have undertaken training to better support persons with disabilities who want to pursue further education, training or work opportunities.

- EmployAbility is a specialist service (delivered under a contract arrangement with 24 contractors around the country on behalf of the Department) which works with the Department’s Intreo and Local Employment Services. EmployAbility participants are people with a disability who are able to work a minimum of 8 hours per week and who need the support of a job coach to obtain employment in the open labour market.

- Partial Capacity Benefit is designed for people who are in receipt of Invalidity Pension or Illness Benefit (for at least six months) and who have some capacity for work. There is no restriction on participant earnings or the number of hours they can work.

I will keep the Department’s employment support schemes for people with disabilities, including the Wage Subsidy Scheme, under review to ensure that they continue to meet their policy objectives. However, any potential changes to these schemes can only be considered as part of the wider budgetary context.

I hope this clarifies the issue for the Deputy.