State-funded voluntary organisations working with people with disabilities have warned services may be curtailed next year due to the additional costs of implementing the Government’s new auto-enrolment pension arrangements for staff.
In a letter to the Department of Children and the HSE, the Disability Federation of Ireland (DFI) and the National Disability Services Association (NDSA) said the introduction of mandatory pension auto-enrolment was a welcome step for workers and their long-term financial security, but the additional costs involved could not be absorbed by organisations. They said direct Government funding was needed.
The new Government pension auto-enrolment scheme, known as My Future Fund, comes into effect on January 1st. The scheme is aimed at assisting up to 800,000 workers without an existing pension to begin saving for their retirement.
Both employer and employee contributions will initially be set at 1.5 per cent of gross earnings, rising by 1.5 per cent every three years until they reach a maximum contribution rate of 6 per cent in year 10. There will also be a State contribution.
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The DFI/NDSA letter said the introduction of pension auto-enrolment would affect various organisations in different ways.
“One large employer from our membership identified approximate additional costs of €1.3 million this year, with increasing costs as employer contributions increase. A small employer identified an additional extra cost of €3,200 this year was identified.”
Member organisation the Irish Wheelchair Association (IWA) said it was “one of many organisations providing services on behalf of the State who will be negatively affected by the Government’s auto-enrolment scheme”.
“In 2026, the State auto-enrolment for IWA will cost approximately €750,000 for all services delivered by IWA on behalf of the State. As employer contributions increase over the next number of years, this figure will reach approximately €3,000,000 annually,” it said.
“As a charity, IWA has no mechanism to fund these increases. The State has increased the costs of delivering services but has failed to provide funding for these increases. .”
The DFI/NDSA letter said there was no provision in Budget 2026 to cover the additional costs generated by the auto-enrolment scheme for bodies which receive State grant aid – known as Section 39 organisations – and other similar organisations.
“With pay levels already tightly negotiated through Workplace Relations Commission processes, the absence of funding for pension auto-enrolment presents a critical risk,” the letter stated.
“Without funding for pension auto-enrolment core disability services will be destabilised at a time when demand continues to grow. Members report that they will be forced to cut programmes, staff hours, or service levels to meet the costs of auto-enrolment”, the letter stated.
Chief executive of DFI Elaine Teague said meeting the additional costs could lead to organisations having to reduce the number of staff available or the hours of operation of particular services.
The DFI/NDSA letter also said that without dedicated funding “there will be regional inconsistencies and inequity relating to pension auto-enrolment”.
The DFI and NDSA said their membership included a wide a wide range of small, medium, and large voluntary sector organisations. It said their membership data shows there is an average of 36 employees per organisation that are not currently in pension arrangements. It also said that for one of the larger organisations the number of staff who are not currently in a pension arrangement is just under 700 employees.
The letter said the administrative and compliance burden would also be significant for their member organisations.
The HSE said many staff of voluntary bodies which it funded under Section 39 of the Health Act were already members of occupational pension schemes or had a personal pension via payroll deductions.
“Therefore, auto-enrolment will not apply to those staff.”
“The HSE will be gathering data from the Section 39 sector it funds over the coming months to establish what level of staff the auto-enrolment will apply to. This will enable an assessment of the likely scale of any cost of the auto-enrolment scheme for HSE-funded Section 39 employers. That assessment will inform consideration of any funding issues and how best to address the same”, the HSE said.
