My Department is currently undertaking an examination of the impact of the payment of Disability Allowance from age 16 on retention rates in second level education. Following the outcome of this review, consideration will be given to a further review of other aspects of the scheme.
The current review is part of the implementation of the recommendations of the working group which examined the various State income maintenance payments for people who are ill and people with disabilities under the Government's Expenditure Review Initiative. This working group was chaired by my Department, with membership from the Department of Health and Children and the Department of Finance and the report was published in 2004. Disability Allowance was one of the schemes reviewed in this process and the recommendations arising from this report continue to be implemented.
In this regard a number of significant changes have recently been made to the Disability Allowance scheme which has included extending the eligibility of the scheme, improving employment incentives for people with disabilities and improving the means test.
As part of Budget 2007, people who had entered residential care without an entitlement to Disability Allowance became eligible for full Disability Allowance as a matter of right, subject only to the same conditions as apply to others.
In order to improve the employment incentives for people of working age and, as part of the Social Welfare Budget package, 2006, I introduced a new lower withdrawal rate of Disability Allowance, effective from 1 June 2006.
This change means that, for earnings above €120 and under €350 per week, Disability Allowance is now withdrawn at 50 cents for every euro earned, rather than the previous euro for euro withdrawal. In practice, this means that a single person can earn up to €420 per week before their Disability Allowance fully ceases, compared with the previous amount of €240 per week.
The policy in relation to supporting employment incentives for people with disabilities will continue to be kept under review in my Department and developed in line with the commitments in my Department's disability sectoral plan.
As with other social assistance payments, capital held by a client in receipt of Disability Allowance is assessable for the purpose of the means test. However, I recognise that persons in receipt of Disability Allowance may not have had the opportunity to accumulate savings or other income through participation in employment and that disability may, in some cases, hamper a person's ability to live independently.
I am also aware that in such circumstances, families may wish to make future financial provision for a child or sibling but are concerned that such provision might adversely affect their entitlement to Disability Allowance. Similarly, in cases where a compensation award has been made to a client as a result of accident or injury, they may be concerned about a reduction or loss of payment of DA and secondary benefits.
As part of Budget 2007, I therefore introduced a higher threshold of €50,000 as the capital disregard specifically for the Disability Allowance scheme. This means that a client with disability may hold this amount of capital or provision can be made for the client up to this amount while retaining full payment of Disability Allowance.
Further policy development of the Disability Allowance scheme will be considered in light of the outcome of the current research project and other aspects of the scheme.