State urged to investigate surge in cost of disability allowance

The Government needs to investigate the substantial increase in the number of people receiving disability allowance with costs soaring from €185 million to €1.35 billion in the last two decades, a report published with the budget has found.

Between 2012 and 2016 there has been an average annual growth in expenditure of €68 million or 5.7 per cent, a rate that would see overall spending reach €1.7 billion by 2020.

The report published by the Department of Public Expenditure and Reform on disability allowance payments found the more recent cost rises were solely down to an increase in the number of recipients, as payment levels have remained flat.

Only 40 per cent of the increase can be readily explained however, it notes, while it is difficult to fully understand where the remaining 60 per cent of recipients have emerged from.

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“The next step is to uncover the unexplained inflows [of recipients] to the scheme to help inform future policy reform in this area,” the report says.

“DEASP (Department of Employment Affairs and Social Protection) should undertake an assessment of DA [the allowance] early in 2018 . . . to assess whether it remains fit-for-purpose.”

The department defines disability allowance as a “means-tested payment for people with a specified disability whose income falls below certain limits and who are aged between 16 and under 66”.

To qualify for the €188 weekly payment, a person must reside in the State, satisfy a means test and fall within certain medical criteria, particularly being unable to undertake suitable employment.

In the last four years the number of recipients increased by 24,358 or 25 per cent.

Demographics

A quarter of the increased inflow of recipients can be attributed to changes in population demographics and in disability prevalence rates. A further 14 per cent is traceable through the movement of people from illness benefit following a change to the duration of that scheme.

Further movements in the numbers can be partly explained by the arrival of those previously covered by a parent’s social welfare, and others migrating from jobseekers’ schemes.

However, the document notes, “further work is required to assess the reasons behind the continuing increasing inflow into DA particularly among young people.

“Previous reports have highlighted changes to medical diagnosis and medical assessment and these should be the subject of future detailed investigation.”

The report notes that the State’s increasing levels of disability support payments is similar to other European countries.

Outlining how the situation may develop here, the report stated that expenditure could hit €1.7 billion by 2020, not taking into account any changes to the payment rate.

Irish nationals are the largest group receiving the allowance although the proportion of recipients from elsewhere in the EU has increased in recent years, particularly from countries which joined since May 2004.