Dáil Éireann Debate, Wednesday - 30 June 2021
144. Deputy Pauline Tully asked the Minister for Social Protection the estimated additional cost of increasing the upper limit of the earnings disregard for the disability allowance from €350 to €400, €450 and €500, respectively; and if she will make a statement on the matter. [35150/21]
View answerDisability Allowance (DA) is a means-tested payment for people with a specified disability who are aged between 16 and 66. The disability must be expected to last for at least one year and the allowance is subject to a medical assessment, a means test and a habitual residency test.
DA is structured to support recipients to avail of opportunities to pursue their own employment ambitions, be that self-employment or in insurable employment. When an individual commences employment, they can avail of an income disregard of €140 per week. In addition, a 50% taper on earnings between €140 and €350 is also applied (disregarded), for the purpose of the means test.
The ESRI SWITCH microsimulation model has been used for the purposes of the estimate requested. The additional cost of increasing the upper limit of the earnings disregard for the disability allowance from €350 to €400, €450 and €500, respectively are set out in tabular form below.
It is important to note that SWITCH is a tax-benefit microsimulation developed by the ESRI. It provides estimates of full-year policy changes, using data from the CSO Survey on Income and Living Conditions. The CSO Survey on Income and Living Conditions is a representative sample, but it is quite small. As Disability Allowance is a relatively small scheme in terms of recipients, there may be issues around sample size when running costings. The microsimulation does not take into account, for example, persons who left DA and who may re-apply as a consequence of the increased upper limit of earnings.
Table: Disability Allowance Disregard Upper Limit Increase from €350.00 to €500.00 in increments of €50.00
|
Disregard |
Increase |
Cumulative Increase from Existing Disregard |
Estimated Additional Cost (€M)from the current disregard |
|
€400.00 |
€50.00 |
€50.00 |
€2.29 |
|
€450.00 |
€50.00 |
€100.00 |
€3.01 |
|
€500.00 |
€50.00 |
€150.00 |
€3.01 |
