Written answers

Tuesday, 13 July 2021

Department of Employment Affairs and Social Protection

Social Welfare Rates

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Social Democrats)
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472. To ask the Minister for Employment Affairs and Social Protection further to Parliamentary Question No. 302 of 1 July 2021, the expected spend in 2020 on the wage subsidy scheme for persons with disabilities; and the additional funding needed in 2022 if the subsidy was raised to 55%, 60% and 65% of the national minimum wage, respectively. [38032/21]

Photo of Heather HumphreysHeather 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 participating 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. 

It is important to reiterate that the range of subsidy rates available are not linked to the statutory minimum wage. They are a contribution paid directly to the employer, subject to certain conditions, against the cost incurred where a productivity shortfall arises from a disability. Rates of payment increase depending on the number of employees employed under the scheme. Incremental top up payments to the basic rate apply, starting at a 10% increase where there are 3 or more employees up to a 50% top up where 23 or more are employed, increasing the basic payment rate to €7.95 per hour.  Employers with 25 or more workers with a disability on the Wage Subsidy Scheme may also 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.

Expenditure on the Wage Subsidy Scheme in 2020 was €18.36 million – this was lower than the estimated expenditure for last year of €24.55 million following a reduction in activity due to COVID-19 restrictions.

Estimated expenditure on the Wage Subsidy Scheme in 2021 is expected to be almost €26 million. 

The additional cost in a full year to link the current rate of the Wage Subsidy at 55%, 60% and 65% of the national minimum wage, as proposed, are set out in tabular form below.

Please note that the figures provided in the table are estimated and based on the following:

- The current number of 1,602 private sector employers availing of the subsidy in respect of some 2,539 participant employees. The Wage Subsidy Scheme is a demand-led scheme so the figures below take no account of behavioural impact e.g. where a new employer might apply for the subsidy on account of an increased rate of subsidy.

- The subsidy is available from between 21 and 39 hours per week and therefore employees’ hours vary. The costs provided are based on employees' current average hours across the subsidised range of 21-39.

- The costs include Strand II and Strand III associated increases. 

- The increase is calculated from a baseline of €23,142,129 based on current numbers.

%of National Minimum Wage (NMW) Hourly Rate in €  Additional Scheme Cost
55% of NMW €5.61 €1,334,294
60% of NMW €6.12 €3,529,424
65% of NMW €6.63 €5,724,553

I trust that this clarifies the matter for the Deputy.

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