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Executive Summary

PART 1 - BACKGROUND

Chapter 1: Introduction
Chapter 2: Scheme Descriptions and Background
Chapter 3: Trends in Numbers and Expenditure

PART 2 - OBJECTIVES AND THEIR CONTINUED RELEVANCE

Chapter 4: Scheme Objectives
Chapter 5: Relevance of Scheme Objectives

PART 3 - HOW WELL ARE THESE OBJECTIVES BEING MET?

Chapter 6: Are Income Support Objectives Being Met?
Chapter 7: Are Poverty and Social Inclusion Objectives Being Met?
Chapter 8: Are Employment Support Objectives Being Met?

PART 4 � IMPROVING EFFECTIVENESS

Chapter 9: Support to Work
Chapters 10 to 12: Issues of Simplification
Chapters 13 to 15: Issues of Comprehensiveness and Consistency
Chapter 16: Scope for Alternative Approaches

PART 5 � CONCLUSIONS AND RECOMMENDATIONS

Overall Conclusions

Chapter 17: Overall Conclusions
Main Recommendations of the Working Group

Background

Chapter 1: Introduction

1 This review examines the various State income maintenance payments for people who are ill and people with disabilities and is one of a series of similar reviews undertaken by the Department of Social and Family Affairs (DSFA) as part of the Government's Expenditure Review Initiative. Currently there are 7 specific illness and disability payment schemes, i.e. Disability Benefit, Invalidity Pension, Injury Benefit, Unemployability Supplement, Disability Allowance, Blind Person's Pension and Infectious Diseases (Maintenance) Allowance. The Supplementary Welfare Allowance scheme also provides income support for some ill and disabled people, in the absence of entitlement to any of the above listed schemes. Apart from the Infectious Diseases (Maintenance) Allowance and Supplementary Welfare Allowance schemes, which are administered by the Health Boards, all of the other schemes are administered by (DSFA). In addition, another means-tested payment, Sickness Allowance, has been legislated for, but not yet implemented. This means that potentially there are 9 different income maintenance schemes catering for ill and disabled people. Total expenditure on the illness and disability schemes is estimated to be in excess of �1.3 billion in 2003, benefiting some 175,000 recipients and their 107,000 dependants.

2 The key elements of this review include clarifying the objectives of each scheme, considering their continued relevance, identifying gaps and overlaps in the overall provision, examining overall trends in numbers and expenditure, examining the extent to which schemes support self- sufficiency, evaluating alternative approaches to the design and delivery of social protection for people who are ill or disabled and examining the roles of (DSFA) and the Health Boards in the provision of income maintenance.

3 Consultations undertaken as part of this review highlighted that the question of meeting the additional costs of disability is an issue of major concern to people with disabilities. It is noted that disability can give rise to extra costs over and above those incurred by the population generally, e.g. the cost of aids, appliances, care and assistance, extra transport costs etc. However, these additional costs are not incurred to the same extent by all people with disabilities. Increasing the level of income maintenance payments, such as Disability Allowance, for all recipients is not therefore, considered an appropriate method of addressing the additional costs of disability. Furthermore, if support towards the additional costs of disability were to be incorporated into income maintenance payments, then this support would be withdrawn on taking up employment, thereby creating a significant disincentive to move from welfare dependency into work. For these reasons, the Working Group adopted the approach that needs arising from the additional costs of disability should be addressed separately to income maintenance needs. This approach is in line with the views of the Commission on the Status of People with Disabilities. As a consequence, this review concentrates on examining the various payments relating to the income maintenance needs of people who are ill and people with disabilities.

Chapter 2: Scheme Descriptions and Background

4 The payments examined by the Working Group cover a diverse customer group who have widely different needs. At one end of the range are those with short-term illness, who may need nothing more than prompt payment of the relevant income support for a couple of weeks until they return to work. At the opposite end they cover people with significant disabilities who have considerable extra needs. Chapter 2, together with Appendices II and III, examines the origins and development of these schemes and also briefly describes each one.

5 This examination highlights that the earliest social welfare measures introduced in this country related to the needs of people who were ill and people with disabilities. While the range of illness and disability payments has been progressively developed over the years, this has been achieved generally in a piecemeal and uncoordinated fashion. However, the administration of these payments has been fragmented between (DSFA) and the Health Boards, with consequential differences in the relevant qualifying criteria etc. Until the take-over of the Disabled Person's (Maintenance) Allowance (DPMA) scheme from the Health Boards in 1996,the (DSFA) payments system was mainly concerned with people who had an attachment to the workforce, e.g. those temporarily absent from work due to illness or injury and those who had to permanently give up work due to ill health or disability. The transfer of the DPMA scheme brought into the (DSFA) payments system, for the first time, a group that generally have significantly different needs and experiences, i.e. people with disabilities from birth or from an early age and those with limited or no work experience.

Chapter 3: Trends in Numbers and Expenditure

6 This Chapter, together with Appendix IV, examines the trends in expenditure and in the numbers of recipients and beneficiaries over the last 20 years, from 1982 to 2002. This analysis highlights that total expenditure on the illness and disability payments has almost quadrupled over the last 20 years, up from �338 million in 1982 to �1,288 million in 2002,with expenditure having more than doubled since 1995.This reflects the significant increases in the levels of payments that have been provided, particularly in recent years, and the increase in the number of people claiming these benefits. At 13% of overall social welfare expenditure, spending on illness and disability payments in 2002 represented 3.9% of Gross Government Expenditure.

7 The total number of recipients of the illness and disability payments has increased by 46% over the last 20 years. The number of recipients and beneficiaries in this category each represent the third largest category of social welfare recipients and beneficiaries, respectively (at 20%). The increase in the number of recipients has been driven largely by improvements in the qualifying conditions for the benefits, higher numbers in work who are covered for social insurance payments and the policy of moving people with disabilities out of residential care and into the community. The number of dependants of these payments has fallen slightly over the same period, reflecting the changes in the dependency arrangements which were introduced in 1986, the overall decline in the birth rate and the increase in labour force participation rates generally and, in particular, among married women.

PART 2 - OBJECTIVES AND THEIR CONTINUED RELEVANCE

Chapter 4: Scheme Objectives

8 The objectives of the earliest social welfare schemes tended not to be formally set out and this is generally the case with the range of payments examined in this review. The Working Group therefore, infers the following broad objectives for the illness and disability payments from an examination of their origins and more recent developments:

  • To provide insured workers and their dependants with security against loss of personal income in the event of illness (both short-term and long-term), disability and occupational injuries, which renders the insured worker incapable of working;
  • To provide assistance to people with disabilities whose employment capacity is substantially restricted by reason of their disability and to other people who are ill, including people suffering from an infectious disease and undergoing treatment for that disease, whose means are insufficient to meet their own needs and those of their dependants; and
  • To encourage and assist people with disabilities and long-term illnesses to identify and take up available employment, training, educational and other self-development opportunities, where appropriate.
Chapter 5: Relevance of Scheme Objectives

9 The continued relevance of these objectives is examined in Chapter 5 having regard to the evolving policy objectives set out in Promoting a Caring Society: Strategy Statement of the Department of Social and Family Affairs for 2003-2005 and, specifically, by reference to three of the high level goals contained in this Strategy Statement that are considered to be of particular importance to this review, i.e. providing income support; combating poverty and promoting social inclusion and providing supports to work. The Working Group concludes that the scheme objectives are still valid and are consistent with the high level goals of income support and support to work. The scheme objectives also make a significant contribution to the broader goal of combating poverty and promoting social inclusion, but given the multi-dimensional nature of social inclusion, the specific contribution of income support measures, while important, may necessarily be limited.

PART 3 - HOW WELL ARE THESE OBJECTIVES BEING MET?

10 Part 3 (Chapters 6 to 8) assesses whether the broad scheme objectives, outlined in paragraph 8 above, are being met by their current operation. This assessment is undertaken by evaluating the operation of the schemes against the goals of income support, combating poverty and promoting social inclusion and support to work. The review also considers how the income support objectives might be better achieved through simplification of systems and improving their comprehensiveness and consistency and how the support to work objectives might be better achieved through strengthening the employment support activities (Part 4). Part 4 also includes an assessment of whether or not alternative approaches to the delivery of income support could improve the effectiveness of their operation.

11 Overall the Group concludes that;

  • The provision of income support for people with illnesses and disabilities is relatively comprehensive, but there could be an improvement in effectiveness and efficiency through rationalisation to make the overall system simpler and more consistent;
  • Although the relevant data available is weak, the limited information would nevertheless, suggest that people with illnesses and disabilities face higher poverty rates than people in other social welfare contingencies. While income support can play a role in reducing poverty, it is likely that other significant issues need to be addressed;
  • Employment supports for this group need to be more systematic and effective. (Although it is also recognized that many of the most intractable problems in this area are outside the remit of (DSFA)).
Chapter 6: Are Income Support Objectives Being Met?

12 A number of key issues of concern emerge in examining the provision of income support to this group, including the adequacy of the illness and disability payments; whether coverage of this contingency is comprehensive and consistent; and whether the illness and disability payments are well targeted. The Working Group concludes that the broad income support objectives of the illness and disability payment schemes are being met by their current operation, in terms of providing income maintenance to this group, and that expenditure on these payments is well targeted.

13 The Working Group notes that the question of the adequacy of social welfare payments in general has been addressed by the PPF Group on Social Welfare Benchmarking and Indexation. In the light of this examination, the Working Group does not itself examine the adequacy of the illness and disability payments, but notes the findings of the PPF Benchmarking Group that it is not possible to derive an indisputable and universally accepted adequacy rate for social welfare payments. The Working Group nevertheless, welcomes the Government commitments that have followed the publication of the findings of the PPF Benchmarking Group as a measurable target for adequacy of payments in this area. These commitments, which are set out in the Agreed Programme for Government and the Review of the National Anti Poverty Strategy provide for the achievement of a rate of �150 a week, in 2002 terms, for the lowest rates of social welfare, to be met by the year 2007.

14 The Group also highlights the need for a consistent approach to adequacy across the different contingencies and it notes that the rates of illness and disability payments broadly correspond to the rates for similar contingencies. However, the Group notes that the payment rates for carers are generally higher than the equivalent payments for people with disabilities. This approach can present difficulties in a number of instances, e.g. where the person being cared for wishes to take up employment or training opportunities or to live more independently. The Working Group is therefore, of the view that in considering any future improvements in the payments for carers, care should be taken to ensure that these payments do not become significant barriers for people with disabilities who wish to achieve more independent living or to take up available employment and training opportunities.

15 Under current arrangements certain illness and disability payments can continue to be paid concurrently with other income maintenance payments, in particular circumstances. The Working Group could find no convincing reasons for such overlaps and recommends discontinuance of these concurrent payments for new cases. As the Disablement Benefit payable under the Occupational Injury Benefits scheme differs fundamentally from other social welfare payments, i.e. it is a compensatory payment in respect of loss of faculty arising from an injury at work rather than an income maintenance payment, the Group recommends that the concurrent payment of this benefit with other social welfare payments should continue where this occurs. The Group also recommends the discontinuance of overlaps between personal rates of illness and disability payments and child dependant increases payable in respect of the same people, for new cases. The issue of the possible overlaps between illness and disability payments made to young recipients and Child Benefit paid in respect of the same people is also examined. However, given that many of the issues involved in such an examination are beyond the remit of this review, it was not possible to come to definitive conclusions on this matter.

16 The Working Group recognizes that the question of meeting the additional costs associated with disability is of major concern to people with disabilities. An examination of some of the issues concerned highlights the particular difficulties involved in attempting to identify the additional costs that are specifically associated with disability, as opposed to additional costs arising in other circumstances, e.g. long-term dependence on social welfare. These complex issues are being examined separately by the PPF Group on the Feasibility of a Cost of Disability Payment. The Working Group nevertheless, supports the view that the costs of disability should be addressed separately to income maintenance needs.

Chapter 7: Are Poverty and Social Inclusion Objectives Being Met?

17 Expenditure on illness and disability payments is substantially redistributed to lower income households, with 76% going towards households in the lowest income decile and 89% going towards households in the bottom half of income distribution. However, the limited data available would suggest that people with disabilities and illnesses face higher poverty rates than the population generally. For instance, while the risk of consistent poverty among households headed by a sick or disabled person has reduced by over a third in the period between 1994 and 2001, this risk is still four times as high as for the population generally. Households headed by a person who is sick or disabled now have the highest risk of falling below relative income thresholds. The risk of consistent poverty for people receiving illness and disability payments has reduced by over a quarter between 1994 and 2001, but this risk is over 3 times higher than for the population generally. For people receiving illness and disability payments, the risk of falling below the 60% relative income line has increased almost five-fold during this period and is now over twice as high as for the population generally. These poverty rates reflect, inter-alia, the trends in the rates of social welfare payments relative to incomes generally. They may also reflect;

  • the lack of employment opportunities for people with disabilities,
  • the lack of comprehensive support towards meeting the additional costs of disability,
  • the impact of extended duration on social welfare payments, and
  • differences in household composition among this group which can impact on patterns of income and consumption.

These are issues that could usefully be explored in further more detailed research.

18 The illness and disability payment schemes make an important contribution towards combating social exclusion of people who are ill and people with disabilities through the provision of adequate income support and they have the potential to do more by strengthening employment support. However, in view of the range of issues emerging, the Working Group considers that the wider social inclusion agenda will have a more important role in this area in the coming years and that the operation of the income maintenance payments for people who are ill or disabled may need to be adapted to take account of these wider issues.

Chapter 8: Are Employment Support Objectives Being Met?

19 While (DSFA) does not itself operate specific employment and training programmes, it aims through its range of supports to encourage and assist people with disabilities and long-term illnesses to identify and take up available employment, training, educational and other self-development opportunities. However, sample surveys undertaken by the Working Group highlight that there are generally very poor outcomes, in terms of progression to employment, resulting from availing of these supports. A significant disincentive to employment, which has been highlighted, is the loss of certain secondary benefits, which can go some way towards meeting the additional costs of disability, e.g. the medical card, Mobility Allowance etc. These issues are being examined by the PPF Group on the Feasibility of a Cost of Disability Payment. The Working Group welcomes this examination and stresses the importance of meeting the additional costs of disability in ways that are less dependent on labour force status, if people with disabilities are to be given the opportunity of participating in the workforce.

20 The Working Group also identifies a number of other difficulties with the operation of the current social welfare employment supports, including the conflicts in trying to reconcile the underlying qualifying criteria that require claimants to be incapable of work with the fact that many claimants have some employment potential. The Group concludes that there are a number of significant gaps in the operation of the current system of employment supports for this group which need to be addressed, including the fact that there is no provision for partial (in)capacity for work; there is no meaningful assessment of employment potential; there is little active engagement with those who have an employment potential and there is no follow-up on completion or cessation of the employment support measure. A number of options for addressing these difficulties are examined in Chapter 9.

PART 4 - IMPROVING EFFECTIVENESS

(CHAPTERS 9 TO 16)

21 The Working Group concludes in Part 3 that there is significant scope for rationalisation of the present system. Currently there are 8 income maintenance payments available for people who are ill and people with disabilities � 4 of which are social insurance payments and 4 means-tested social assistance payments (including the Supplementary Welfare Allowance scheme). In addition, the Sickness Allowance is a further social assistance payment that has been legislated for, but not yet commenced. The Working Group recommends the merger of a number of these payments, as detailed in paragraphs 24 to 27 below. Overall the Group's proposals would lead to a significant rationalisation of the system of income support for people with disabilities and illnesses, with a halving of the potential number of different payment schemes from 9 to 5 (or possibly 4) and with clearer distinctions between each payment. This would be of benefit, not alone to claimants in understanding the system, but also to those administering the schemes.

The Working Group also makes a number of other recommendations to improve the overall comprehensiveness and consistency of the illness and disability payments system and examines options for the future development of the range of employment support measures.

Chapter 9 - Support to Work

22 Following on from its examination in Chapter 8 of the extent to which the employment support objectives of the illness and disability payments are being met, Chapter 9 undertakes an examination of the options for the future development of the system. The Working Group considers that there is no single option, which offers a total solution to all of the problems identified with the operation of the current employment supports for people with illnesses and disabilities. Rather a combination of measures is required which should include;

  • A recognition that some people's medical and other circumstances may mean that they have some capacity for work, but may never achieve full-time work;
  • Ensuring that whatever employment support measures are adopted do not act as a barrier for people with disabilities and long-term illnesses in maximising their employment and earnings potential;
  • Retaining a range of employment supports for different client groups, and ensuring that clients are referred to the most suitable option, having regard to the nature of their illness/disability, age and social circumstances etc.; and
  • The introduction of early intervention measures which are aimed at re-integrating people who sustain serious illnesses, injuries and disabilities back into the workforce before they become long-term dependent on social welfare payments.

23 The Working Group recognises that some of these options would involve significant extra resources having to be deployed than is currently the case. However, given the potential gains for both individual clients and for the Department, the Group recommends that these options should initially be explored by way of pilot projects which would be better able to assess the benefits of such approaches, including the additional resources and potential savings involved.

Chapters 10 to 12 - Issues of Simplification

24 Chapter 10 examines the overlaps between the range of Occupational Injury Benefits (OIB) and social insurance benefits generally. The Working Group recommends that, in principle, where efficiencies can be achieved through the merger of OIB payments with corresponding social insurance payments, such mergers should be pursued. In the context of this particular review, the Group recommends the merger of 2 of the income maintenance payments for people who are ill and people with disabilities under the OIB scheme, i.e. Injury Benefit and Unemployability Supplement, and that this merged payment should only be paid where there is no underlying entitlement to either Disability Benefit (DB) or Invalidity Pension. The introduction of these arrangements would result in administrative savings arising from the reduced burden of investigations into the causes of accidents.

25 Chapter 11 examines the overlaps between long-duration DB, i.e. DB paid for a year or more and Invalidity Pension. Although both schemes provide income support in the case of long-term incapacity, the essential distinction between them is based on the concept of "permanence". Invalidity Pension requires permanent long-term incapacity, while long-duration DB requires long-term but not permanent incapacity. This can lead to difficulties in applying the concept of "permanence" in a clear and consistent way and with the relevance of this concept to the current labour market realities and the objective of supporting return to work. The Working Group examines whether different contingencies are catered for by each scheme, given the similarities between the objectives of both schemes, and concludes that essentially the same contingency is involved.

26 The Working Group considers therefore, that current provision for long-term illness and disability needs to be improved, either by integrating the DB and Invalidity Pension schemes or by the introduction of a clearer distinction between each payment. However, the Group could not agree on which of these options provided the best way forward. Furthermore, in examining this area, the Group could find no objective reasons for treating long-duration DB recipients any differently to other long-term social welfare recipients, particularly Invalidity Pensioners, for income tax purposes. Accordingly, the Working Group recommends that where a DB claim lasts for at least a year, the same tax arrangements as apply in the case of Invalidity Pension should be applied. In addition, arising from its examination of this area, the Group also recommends that a review of the operation of the medical assessment system is warranted and that this should form the basis of a separate review.

27 Chapter 12 examines the overlap between the Disability Allowance (DA) and Blind Person's Pension schemes. The Working Group is recommending the merger of these two means-tested payments for people with disabilities. As the DA scheme better reflects the needs of people with disabilities in general, it is recommended that the Blind Person's Pension scheme be merged into an adapted DA scheme. Existing blind pensioners who are better off under the adapted DA scheme would have their payment increased, while those who would be adversely affected would have their existing entitlements preserved for the duration of their claim.

Chapters 13 to 15 - Issues of Comprehensiveness and Consistency

28 Chapter 13 examines the comprehensiveness of the social assistance system in providing for people with short-term illness and, in particular, whether there is a need for a separate Sickness Allowance scheme, as has been legislated for. The Working Group considers that whatever arrangements apply in this area should have adequate controls and should not impose a significantly higher administrative burden than the current arrangements or disimprove customer service. The Group also considers that there would have to be sufficient numbers to justify the introduction of any new payment in this area.

29 Three options for dealing with the social assistance needs of people who are temporarily ill or disabled are considered, i.e. adapting the existing DA scheme to cater for both long and short-term illness and disability; introducing a specific payment to cater for short-term illness, e.g. the Sickness Allowance scheme; and retaining the current arrangements. While there are a range of advantages and disadvantages associated with all 3 options, the Working Group considers that none offers a more compelling or convincing case than the others. In view of the lack of any financial gain for clients and the potential disimprovements in customer service associated with the introduction of a Sickness Allowance scheme and based on the limited statistical information available, the Working Group therefore, recommends that the current arrangements for dealing with the social assistance needs of those who are short-term ill or disabled should continue to apply. In addition, the Infectious Diseases (Maintenance) Allowance scheme, which is currently administered by the Health Boards, should be merged into the Supplementary Welfare Allowance scheme.

30 The Working Group considers that many of the problems involved in catering for the social assistance needs of people who are temporarily ill arise from the categorised nature of the social assistance payments structure. The introduction of a single means-tested income support payment in place of the current range of contingency-based payments could therefore, resolve many of these difficulties. The Group considered that the implications of such an approach, which would represent a radical departure from the way in which the social assistance system has operated to date, could usefully be explored under the Expenditure Review process.

31 Two further issues of comprehensiveness are examined in Chapter 14. Firstly, the Working Group considers whether there is a potential gap in social insurance protection relating to the lack of cover for illness and disability payments for the self-employed. However, given the complexity of the questions to be addressed in the extension of such cover to the self-employed and the fact that many of the issues involved are beyond the review's remit, including the possibility of increasing the PRSI rates payable by the self-employed to fund such an extension, the Working Group does not make any recommendations in this area. The Group notes however, that these issues are being examined separately by (DSFA).

32 The second issue examined in Chapter 14 is the comprehensiveness of cover under the individual payment schemes. While most of the payment schemes are considered to be comprehensive in terms of those covered, a particular gap relates to those in full-time residential care who are generally disqualified for DA purposes. This disqualification has created an anomalous situation within the social welfare system as between the treatment of claimants of DA who are in residential care and the treatment of all other social welfare recipients in similar circumstances. On the grounds of equity, the Working Group recommends the removal of this disqualification. However, its abolition could result in double funding being provided by the State in the case of the maintenance costs of certain people in full-time residential care. A number of options are therefore, examined for avoiding such duplication in funding. In this regard, the Working Group sees merit in the takeover by (DSFA) of responsibility for the payment of the spending allowances currently provided by or on behalf of the Health Boards, with offsetting savings arising under the Department of Health and Children Vote. The Group welcomes the decision to this effect, which was announced in Budget 2003.

33 A number of issues relating to consistency of treatment within and between the different illness and disability payment schemes are examined in Chapter 15.The Working Group makes a number of recommendations to improve the overall consistency in this area, including taking measures to ensure that the operation of the current graduated rates of DB, which are paid in the case of those on low earnings, do not act as a disincentive to employment; automatically transferring all recipients of illness and disability payments who reach pension age (66 years) onto the appropriate pension payment; and renaming certain illness and disability payments to more accurately reflect the contingencies involved.

Chapter 16 - Scope for Alternative Approaches

34 Chapter 16 examines the scope for alternative approaches to the current social insurance/social assistance model of income support for people who are ill and people with disabilities. In the light of the significant difficulties and uncertainties involved, the Working Group does not recommend any of the alternative approaches for public provision, which are examined, i.e. Basic Income, Negative Income Tax or Universal Payment systems. While private insurance and compensation through the courts can enhance the level of social welfare support provided, the Working Group does not see any wider role for these options in replacing the current State system. However, in the light of a number of developments which have taken place since it was last considered, the Group recommends that a re-examination of the possible introduction of Statutory Sick Pay would have considerable merit at this stage, given the potential administrative savings for (DSFA) and the potential to reduce absenteeism rates. In view of the issues involved, such consideration would be best progressed through the social partnership structures.

PART 5 - CONCLUSIONS AND RECOMMENDATIONS

35 Chapter 17 outlines the overall conclusions of the Working Group and also lists the main recommendations. It also examines the impact of the Group's proposals on groups in poverty or at risk of falling into poverty. The Working Group considers that the nature of this review does not lend itself to the standard poverty-proofing template, which has been developed as part of the NAPS process. Given the administrative nature of many of the proposals contained in this Report and the fact that relatively small numbers of people might be affected by them initially, each of the recommendations has not been assessed individually for their impact on poverty. In keeping with the aim of the review, which is to provide an overview of all income maintenance schemes, it is felt that it would be better to consider the overall impact of these schemes on poverty. The Working Group considers that its analyses comprehensively address the impact of the proposals on groups in poverty and at risk of falling into poverty.


Chapter 17 - CONCLUSIONS AND RECOMMENDATIONS

17.1 Overall Conclusions

17.1.1 - Parts 3 and 4 of this report examine the broad objectives of the various illness and disability payment schemes, which are set out in paragraph 5.2.1 of Chapter 5,and the Working Group concludes that they still remain valid. The Working Group also assesses whether these scheme objectives are being met by their current operation. This assessment is undertaken by evaluating the operation of the schemes against three of the high level goals contained in Promoting a Caring Society: Strategy Statement of the Department of Social and Family Affairs for 2003 to 2005, which are considered to be of particular relevance to this review, i.e. the provision of income support, combating poverty and promoting social inclusion and the provision of support to work. The review also considers how the income support objectives might be better achieved through simplification of systems and improving their comprehensiveness and consistency and how the support to work objectives might be better achieved through strengthening the employment support activities. The review includes an assessment of whether alternative approaches to the delivery of income support could improve the effectiveness of their operation.

17.1.2 - Overall the Group concludes that;

  • The provision of income support for people with illnesses and disabilities is relatively comprehensive, but there could be an improvement in effectiveness and efficiency through rationalisation to make the overall system simpler and more consistent;
  • Although the relevant data available is weak, the limited information would nevertheless, suggest that people with illnesses and disabilities face higher poverty rates than people in other social welfare contingencies. While income support can play a role in reducing poverty, it is likely that other significant issues need to be addressed;
  • * Employment supports for this group need to be more systematic and effective.

* Although it is recognised that many of the most intractable problems in this area are outside the remit of (DSFA).

Provision of an Adequate and Comprehensive System of Income Support

17.1.3.1 - The question of the adequacy of social welfare payments in general has been addressed by the PPF Group on Social Welfare Benchmarking and Indexation. In the light of this examination, the Working Group does not itself examine the adequacy of the illness and disability payments, but notes the findings of the PPF Benchmarking Group that it is not possible to derive an indisputable and universally accepted adequacy rate for social welfare payments. The Working Group nevertheless, welcomes the Government commitments that have followed the publication of the findings of the PPF Benchmarking Group as a measurable target for adequacy of payments in this area. These commitments provide for the achievement of a rate of �150 a week, in 2002 terms, for the lowest rates of social welfare, to be met by the year 2007.

17.1.4 - In its examination of the effectiveness of the current range of income maintenance schemes, the Working Group concludes that there is significant scope for rationalisation of the system. Currently there are 7 specific income maintenance payments for people who are ill and people with disabilities � 4 social insurance payments and 3 means-tested social assistance payments.

The Supplementary Welfare Allowance scheme also provides income support for some ill and disabled people, in the absence of entitlement to any of the other specific payments. In addition, there is a further social assistance payment - Sickness Allowance, which has been legislated for, but not yet commenced. This means that potentially there are 9 different schemes catering for the needs of sick and disabled people.

17.1.5 - The Working Group recommends the merger of 2 of the existing social insurance payments, i.e. Injury Benefit and Unemployability Supplement, and that this merged payment should only be paid where there is no underlying entitlement to either DB or Invalidity Pension. In the case of the other 2 social insurance payments - DB and Invalidity Pension, the Group considers that current provision for long-term illness and disability needs to be improved, either by integrating both of these payments or by the introduction of a clearer distinction between both payments.

However, the Group could not agree on which of these options provided the best way forward. The net result of the Group's recommendations in relation to social insurance illness/disability payments is therefore, to reduce the number of these payments from 4 to 3 (or possibly 2), with a considerably reduced role for one of these payments, i.e. the merged Injury Benefit/Unemployability Supplement scheme.

17.1.6.1 - On the social assistance side, the Working Group is recommending the merger of the 2 means-tested payments for people with disabilities, i.e. the Blind Person's Pension would be merged into an adapted Disability Allowance scheme. In addition, the Infectious Diseases (Maintenance) Allowance scheme, which is currently administered by the Health Boards, would be merged into the Supplementary Welfare Allowance scheme and the proposed Sickness Allowance scheme would not be proceeded with. The net effect of the Group's proposals in relation to social assistance payments is to reduce the potential number of payments from 5 to 2.

17.1.6.2 - Overall the Working Group's proposals would lead to a significant rationalisation of the system of income support for people with disabilities and illnesses, with a halving of the potential number of different payment schemes from 9 to 5 (or possibly 4) and with clearer distinctions between each payment. This would be of benefit, not alone to claimants in understanding the system, but also to those administering the schemes. The Working Group also makes a number of other recommendations to improve the overall comprehensiveness and consistency of the illness/disability payments system, including proposals to extend cover for Disability Allowance to all people who are in full-time residential care.

Scope for Alternative Approaches

17.1.8 - The scope for alternative approaches to the current social insurance/social assistance model of income support for people who are ill and people with disabilities is also examined. In the light of the significant difficulties and uncertainties involved, the Working Group does not recommend any of the alternative approaches for public provision, which are examined, i.e. Basic Income, Negative Income Tax or Universal Payment systems. While private insurance and compensation through the courts can enhance the level of social welfare support provided, the Working Group does not see any wider role for these options in replacing the current State system. However, in the light of a number of developments, which have taken place since it was last considered, the Group recommends that a re-examination of Statutory Sick Pay would have considerable merit at this stage, given the potential administrative savings for (DSFA) and the potential to reduce absenteeism rates. In view of the issues involved, such consideration would be best progressed through the social partnership structures. As a first step, the Working Group recommends that the current incidence of payment of sick pay by employers should be established.

Combating Poverty and Promoting Social Inclusion

17.1.9 - Expenditure on illness and disability payments is substantially redistributed to lower income households, with 76% going towards households in the lowest income decile and 89% going towards households in the bottom half of income distribution. However, the limited data available would suggest that people with disabilities and illnesses face higher poverty rates than the population generally. For instance, while the risk of consistent poverty among households headed by a sick or disabled person has reduced by over a third in the period between 1994 and 2001, this risk is still four times as high as for the population generally. Households headed by a person who is sick or disabled now have the highest risk of falling below relative income thresholds. The risk of consistent poverty for people receiving illness and disability payments has reduced by over a quarter between 1994 and 2001, but this risk is over 3 times higher than for the population generally. For people receiving illness and disability payments, the risk of falling below the 60% relative income line has increased almost five-fold during this period and is now over twice as high as for the population generally. These poverty rates reflect, inter-alia, the trends in the rates of social welfare payments relative to incomes generally. They may also reflect;

  • the lack of employment opportunities for people with disabilities,
  • the lack of comprehensive support towards meeting the additional costs of disability,
  • the impact of extended duration on social welfare payments, and
  • differences in household composition among this group which can impact on patterns of income and consumption.

17.1.10 - The illness and disability payment schemes make an important contribution towards combating social exclusion of people who are ill or disabled through the provision of adequate income support and they have the potential to do more by strengthening employment support. However, given the multi-dimensional nature of social inclusion, the specific contribution of income support measures may necessarily be limited. Nevertheless, in view of the range of issues emerging, it is considered that the wider social inclusion agenda will have a more important role in this area in the coming years and that the operation of the income maintenance payments for people who are ill or disabled may need to be adapted to take account of these wider issues.

Provision of Supports for Work

17.1.11 - While the Department of Social and Family Affairs does not itself operate specific employment and training programmes, it aims through its range of supports to encourage and assist people with disabilities and long-term illnesses to identify and take up available employment, training, educational and other self-development opportunities. However, sample surveys undertaken by the Working Group highlight that availing of these supports results in generally very poor outcomes, in terms of progression to employment.

17.1.12 - The Working Group identifies a number of difficulties with the operation of the current social welfare employment supports, including the loss of secondary benefits on taking up employment and the conflicts in trying to reconcile the underlying qualifying criteria that require claimants to be incapable of work with the fact that many claimants have some employment potential. The Group concludes that there are a number of significant gaps in the operation of the current system of employment supports for this group which need to be addressed, including the fact that there is no provision for partial (in)capacity for work; there is no meaningful assessment of employment potential ;there is little active engagement with those who have an employment potential; and there is no follow-up on completion or cessation of the employment support measure. The Working Group also stresses the importance of meeting the additional costs of disability in ways that are less dependent on labour force status, if people with disabilities are to be given the opportunity of participating in the workforce.

17.1.13.1 - The Working Group considers that there is no one single option, which offers a total solution to all of these problems. Rather a combination of measures is required which should include;

  • A recognition of the fact that some people's medical and other circumstances may mean that they have some capacity for work, but may never achieve full-time work;
  • Ensuring that whatever employment support measures are adopted do not act as a disincentive for people with disabilities and long-term illnesses in maximising their employment and earnings potential;
  • Retaining a range of employment supports for different client groups, and ensuring that clients are referred to the most suitable option, having regard to the nature of their illness/disability, age and social circumstances etc.; and
  • The introduction of early intervention measures which are aimed at re-integrating people who sustain serious illnesses, injuries and disabilities back into the workforce before they become long-term dependant on social welfare payments.

17.1.13.2 - The Working Group recognises that some of these options would involve significant extra resources having to be deployed than is currently the case. However, given the potential gains for both individual clients and for the Department, the Group recommends that these options should initially be explored by way of pilot projects which would be better able to assess the benefits of such approaches, including the additional resources and potential savings involved.

17.2 - Poverty Proofing

17.2.1 - Arising from a Government decision of 23 July 1998, it is a requirement that significant policy proposals indicate clearly the impact of those proposals on groups in poverty or at risk of falling into poverty. Following on from this, a standard template for "poverty proofing" significant policy proposals has been developed.

17.2.2 - In examining the impact of its proposals on groups in or at risk of poverty, the Working Group considers that the nature of this review does not lend itself to the standard poverty-proofing template. Given the administrative nature of many of the proposals contained in this Report and the fact that relatively small numbers of people might be affected by them initially, the Group does not assess each of the recommendations individually for their impact on poverty. In keeping with the aim of the review, which is to provide an overview of all income maintenance schemes, it is felt that it would be better to consider the overall impact of these schemes on poverty. Accordingly, the Working Group considers that the analyses which it has carried out throughout this report comprehensively address the impact of its proposals on groups in poverty and at risk of falling into poverty. This is particularly the case in Part 3, which deals with how well the objectives of the illness and disability payment schemes are being met.

17.2.3 - The Review of the National Anti Poverty Strategy identifies people with disabilities as being a vulnerable group and has identified that * "the overall objective is to increase the participation of people with disabilities in work and in society generally and to support people with a disability, and their families, to lead full and independent lives." The Working Group considers that the overall thrust of its proposals is fully in line with this objective.

* Department of Social and Family Affairs, Building an Inclusive Society: Review of the National Anti Poverty Strategy under the Programme for Prosperity and Fairness (Dublin: The Stationary Office,2002).

17.3 - Main Recommendations of the Working Group

The main recommendations of the Working Group are as follows;

Adequacy of Income Support Provision

  1. Needs arising from the additional costs of disability should be addressed separately rather than through higher basic income maintenance payments, which would not be targeted at those individuals whose needs are greatest. The additional costs of disability are best met in ways that are less dependent on the person's labour force status. (paragraphs 1.7, 6.3.3, 6.6.10, 8.2.5)
     
  2. The significant increase in recent years in the numbers on Disability Allowance and the over-representation of female recipients of DB in particular age groups merit closer examination in the context of more detailed reviews of these schemes. (paragraphs 3.2.8 and 3.5.11)
     
  3. In considering any future improvements in the payment schemes for carers, care should be taken to ensure that these payments do not become significant barriers for people with disabilities who wish to achieve more independent living or to take up available employment and training opportunities. (paragraph 6.4.11)
     
  4. Because of the nature of the Disablement Benefit scheme, concurrent payment of this benefit with other social welfare payments should continue, where this occurs. (paragraph 6.5.4)
     
  5. Concurrent payment of illness and disability payments with all other social welfare payments (other than Disablement Benefit) should be discontinued for new cases. (paragraphs 6.5.5, 6.5.6, 6.5.12, 11.5.14 and 12.5.6)
     
  6. Overlaps between personal rates of illness and disability payments for young recipients and child dependant increases payable in respect of the same people should be discontinued for new cases. (paragraph 6.5.14)
     
  7. Given that many of the issues involved in an examination of the overlaps between illness and disability payments for young recipients and Child Benefit payable in respect of the same person are beyond the remit of this review, it was not possible to come to definitive conclusions on this matter. (paragraph 6.5.21)
     
  8. The higher risk of poverty among people with illnesses and disabilities may reflect, inter-alia, the lack of employment opportunities for people with disabilities, the lack of comprehensive support towards meeting the additional costs of disability, the impact of extended duration on social welfare payments and differences in household composition. These are issues that could usefully be explored in further more detailed research. (paragraphs 7.5.15 and 7.9.3)

Simplification of Systems

  1. In principle, where efficiencies can be achieved through the merger of Occupational Injury Benefit payments with corresponding social insurance payments, such mergers should be pursued. In this regard, the Injury Benefit and Unemployability Supplement schemes should be retained, but merged into a single scheme catering for short-term and long-term incapacity in cases of occupational accidents, where the claimant does not have an entitlement to either DB or Invalidity Pension. (paragraphs 10.4.2 and 10.7.1)
     
  2. People injured at work who qualify for DB under the new arrangements would be advised of their possible entitlement to Disablement Benefit and/or Medical Care. (paragraph 10.7.2)
     
  3. Where a DB claim lasts for at least a year, the same tax arrangements as apply in the case of Invalidity Pension should be applied. (paragraph 11.5.13)
     
  4. The current arrangements for social insurance provision for long-term illness and disability need to be improved, either by integrating the DB and Invalidity Pension schemes or by the introduction of a clearer distinction between both payments. However, the Group could not agree on which of these 2 options provided the best way forward. (paragraph 11.8.1)
     
  5. An examination of the operation of the medical review and assessment system for illness and disability payments is warranted and this should form the basis of a separate review. (paragraph 11.8.5)
     
  6. There should be one single means-tested payment for people with disabilities, regardless of the nature of the disability. As the Disability Allowance scheme better reflects the needs of people with disabilities, the Blind Person's Pension should be merged into an adapted DA scheme. Existing blind pensioners who would be better off under DA would have their payments increased, while those adversely affected would have their existing entitlements preserved for the duration of their claim. (paragraph 12.6.1)
     
  7. In the light of recommendation 5 above, that concurrent payment of illness and disability payments with all other social welfare payments should be discontinued for new cases, the position of former blind pensioners with "preserved" entitlement to concurrent payments should be reviewed in the event of provision being made in the future for the additional costs of disability. (paragraph 12.6.2)
     
  8. If, following the deliberations of the PPF Working Group on the Feasibility of a Cost of Disability Payment, any new arrangements are introduced to address the additional costs of disability, then the future role of the Blind Welfare Allowance would have to be considered in the light of such arrangements. (paragraph 12.7.9)

Improving Comprehensiveness and Consistency

  1. An examination should be undertaken of those classified as being sick and claiming Supplementary Welfare Allowance for more than a year and of those classified as awaiting payment of Disability Allowance, to ensure that people in these categories are properly classified. (paragraph 13.4.15)
     
  2. Based on the limited statistical information available, and in view of the lack of any financial gain for clients and the potential disimprovements in customer service associated with the introduction of a Sickness Allowance scheme, the current arrangements for dealing with the social assistance needs of those who are short-term ill or disabled should continue to apply. In addition, the Infectious Diseases (Maintenance) Allowance should be merged into the Supplementary Welfare Allowance scheme. (paragraph 13.5.1)
     
  3. Many of the problems involved in catering for the social assistance needs of people who are temporarily ill arise from the categorised nature of the social assistance payments structure. The introduction of a single means-tested income support payment in place of the current range of contingency-based payments could resolve many of these difficulties. The implications of such an approach, which would represent a radical departure from the way in which the social assistance system has operated to date, could usefully be explored under the Expenditure Review process. (paragraphs 13.5.2 and 13.5.3)
     
  4. The question of extending cover for Invalidity Pension to the self-employed is a complex matter and involves consideration of a number of issues, which are beyond the remit of this review. As these issues are being examined separately by the Department, no recommendations are made in this area. (paragraph 14.2.5)
     
  5. The residential care disqualification for Disability Allowance purposes should be removed. (paragraph 14.3.18)
     
  6. The operation of measures such as the graduated rates of DB, which limit the amount of DB payable to those on reduced earnings, is still warranted. The current level of the weekly income thresholds associated with the operation of the graduated DB arrangements represents a serious employment disincentive. Measures should be taken to ensure that the current rates of DB do not act as a disincentive to employment in the case of people on reduced earnings. (paragraphs 15.2.6, 15.2.20 and 15.2.22)
     
  7. A change in the minimum age for payment of DA is not recommended at this stage, as it would create a significant gap in the current range of supports for young people with disabilities. Early intervention measures should be introduced to cater for the potential difficulties involved in paying DA to young people with disabilities. (paragraphs 15.3.14 and 9.7.2)
     
  8. In principle, all recipients of illness and disability payments aged 66 and over should be automatically transferred to the appropriate pension payment. (paragraph 15.4.5)
     
  9. Some of the illness/disability payments need to be renamed to more accurately reflect the contingencies involved. The Disability Benefit scheme should be renamed Incapacity Benefit and the merged Disability Allowance/Blind Person's Pension scheme (see recommendation 14 above) should continue to be named Disability Allowance. (paragraphs 15.5.3 and 15.5.5)
     
  10. The question of the payment of illness/disability payments to non-nationals raises concerns as to the operation of the broader social welfare system, which were beyond the remit of this review. As these issues are being examined separately by the Department, no recommendations are made in this area. (paragraph 15.6.3)

Scope for Alternative Approaches

  1. In the light of the significant difficulties and uncertainties involved, a move from the current social insurance/social assistance model of income support for people who are ill and people with disabilities to alternative approaches for public provision, such as Basic Income or Universal Payment systems, is not recommended. (paragraphs 16.2.18, 16.3.9, 16.4.14 and 16.9.1)
     
  2. While private insurance schemes and compensation through the courts can enhance the level of social welfare income support, a wider role for these options in replacing the current State system is not recommended. (paragraphs 16.6.10 and 16.9.2)
     
  3. In view of the changes that have occurred since it was last investigated, it is considered that a re-examination of Statutory Sick Pay would have considerable merit at this stage, given the potential administrative savings for the Department and the potential to reduce absenteeism rates. As a first step, the current incidence of payment of sick pay by employers should be established. In view of the issues involved, such consideration would be best progressed through the social partnership structures. (paragraphs 16.7.9 and 16.9.2)

Strengthening Employment Support

  1. In principle there should be a range of employment support options/schemes available to fit the different situations of people with disabilities and people who are ill, e.g. those capable of some work, capable of part-time work, in need of rehabilitation/retraining etc. This would represent a considerable easing of the existing qualification criteria and would pose control problems unless it was possible to ensure that individual clients were on the most appropriate scheme. (paragraph 8.3.3)
     
  2. Statistical information should be systematically recorded on those availing of various employment/training support measures, focussing, in particular, on outcomes and distinguishing between the different supports availed of, e.g. CE, F�S training etc. (paragraph 8.3.11)
     
  3. The introduction of measures for the active case management of those identified as having employment potential and for targeting more effectively the existing employment supports at particular groups would avoid the need for reliance on inappropriate concepts such as "rehabilitative work or employment". (paragraph 8.3.19)
     
  4. The imposition of a time limit on exemptions from the Rules of Behaviour in the case of "therapeutic" employment would appear to be inappropriate. (paragraph 8.3.20)
     
  5. For DB recipients who are likely to drift into long-term illness, the possible benefits of early intervention measures should also be explored through the establishment of a pilot project, which would assess the potential of such measures in terms of re-integration back into the workforce. (paragraphs 8.3.21, 9.6.3 and 9.7.2)
     
  6. Early intervention measures should also be introduced to cater for the potential difficulties involved in paying DA to young people with disabilities. (paragraphs 8.3.23, 9.6.4 and 9.7.2)
     
  7. A "one size fits all" approach, whereby the same range of additional supports, such as Free Schemes etc. are made available to all people with disabilities, regardless of their circumstances may not be the most suitable approach, particularly given the potential employment disincentive effects involved. Any examination of possible mechanisms for overcoming the potential disincentive effects posed by the loss of these additional benefits by people with disabilities on taking up employment should also encompass an examination of the appropriateness of the provision of the Free schemes etc. to this group, in the first instance. (paragraphs 8.3.28 and 8.3.32)
     
  8. In the absence of a comprehensive Needs Assessment procedure for people with disabilities, the application process for receipt of illness and disability payments should be adapted so as to better ascertain information on the claimant's current and future employment potential. (paragraph 9.7.2)
     
  9. Where people with disabilities and long-term illnesses have been assessed as having employment potential, there should be a more active engagement with them through the introduction of a locally-based case management procedure. (paragraph 9.7.2)
     
  10. Ideally such a case management system should involve the various agencies concerned, but in the interim the (DSFA) Job Facilitators are well placed to carry out such a role. However, due to the limited numbers of Job Facilitators currently available, the potential benefits of a case management procedure should be explored through the establishment of a pilot project. (paragraphs 8.3.7 and 9.7.2)
     
  11. Based on the experience of the operation of a case management process, the various employment support measures should be operated in a more targeted way, with existing supports being adapted where necessary and new supports being introduced to meet the needs of particular groups. (paragraph 9.7.2)
     
  12. Subject to the difficulties outlined in paragraphs 9.4.5 and 9.4.8 being satisfactorily resolved, a specific payment should be introduced in order to address the gap in provision for people with disabilities who only have a partial capacity for work. This payment would need to be tied into a suitable assessment procedure and case management structure and should be structured in such a way that it does not act as a disincentive to people in maximising their employment/earnings potential. (paragraph 9.7.2)

 

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