1. Assessment and recommendations
The disability employment gap is exceptionally large in Ireland and there is a considerable risk that the COVID-19 crisis will further increase this gap. Ireland is aware of the need for action to increase employment participation and thus also the incomes of persons with disabilities. In the course of the implementation of the Comprehensive Employment Strategy, a number of new supports were introduced for both employers and employees but the take-up of all these programmes and measures is stubbornly low. Further reform will require leadership and a whole-of-government approach, and must include measures to spur and facilitate the engagement of employers on the one hand, and measures to further improve the skills and work incentives of persons with disabilities on the other.
Similar to other OECD countries, the COVID-19 crisis continues to have significant impacts on Ireland. The immediate impact has been much greater than during the first months of the Global Financial Crisis in 2008/09. The effects of the COVID-19 crisis are also unlikely to fade away rapidly, as the supply shock has quickly turned into a demand shock, and as economic activity in many sectors remains subdued. Latest data from the OECD suggest that it will take Ireland 4.5 years to get back to pre-pandemic employment levels, compared to 3.75 years for the OECD as a whole and only 2.5 years in many other small European economies such as Austria, Denmark and Sweden (OECD, 2021[1]).
At the beginning of the crisis during the first lockdown, the Irish economy experienced a significant drop in job vacancies of more than 56% (comparing vacancies in June 2020 to the previous year). Since this time, the gap has narrowed to 16% in December 2020. Unemployment was 7.2% in December 2020 but as high as 20.4% if one accounts for the COVID-19 Adjusted Measure of Unemployment, which considers recipients of the government’s pandemic unemployment payment as unemployed.
The Irish Government has introduced a number of policy responses aimed at containing damage and supporting workers and companies as well as at avoiding destruction of viable activities and competencies, thereby preparing the recovery. Nevertheless, the COVID-19 crisis could lead to deepening divides within labour markets at the national and local level across Ireland. As with other OECD countries, the low skilled population, low-wage workers, part-time workers, women, migrants and young people have been hit hardest by COVID-19-related job losses. Another key group is persons with disabilities, who were facing a number of barriers to the labour market even before the pandemic. The COVID-19 crisis presents several risks and opportunities for persons with disabilities in Ireland. On the one hand, the crisis could further exacerbate the barriers they face to fully participating in the labour market. On the other hand, the sudden shift to digital work provides a new avenue to promote overall labour market participation.
At about 30-36%, depending on the data source, employment rates of persons with disabilities in Ireland are very low and only half or even less than half the rate of persons without disabilities. The disability employment gap is much larger than in most other OECD countries and twice the OECD average. A main driver for this disappointing outcome is the large employment gap in Ireland for persons with a low level of educational achievement and the high share among persons with disabilities in Ireland who leave the education system with a low level of education.
Further comparative data suggest that the Irish labour market is generally not very inclusive. Other disadvantaged groups, such as older workers, mothers with young children, migrants or Travellers, also struggle to access the labour market – a labour market geared towards mainstream full-time employment and offering limited work time and work place flexibility. Persons with disabilities are those facing the largest employment disadvantage of all groups.
A large share of people in Ireland – over 10% of the working-age population – receive a disability payment, especially Disability Allowance (for those with limited work record) or Invalidity Pension (for those with sufficient insurance years) but also a number of other disability-related payments. The share is much higher than in most other OECD countries and, notably, a very high share of those benefit recipients – almost two-thirds of them – say they are able to work. This aligns with survey data suggesting that persons with disabilities struggle with finding a job, or a better job. The exceptionally high unemployment rate for persons with disabilities in Ireland, of almost 30% compared to about 10% for the rest of the population, prior to the pandemic and the resulting jobs crisis, mirrors their struggle to find employment.
Despite and because of the large number of people receiving disability payments, low income and a high risk of poverty are frequent realities for persons with disabilities in Ireland, affecting around one in four of them, again significantly more than the OECD average. Many persons with disabilities in Ireland live from social benefits which, unless for the very young, are not sufficient to prevent poverty. Finding employment and, ideally, progressing in the job is the only viable option to escape low income.
While having a paid job is so important, the analysis of policies and strategies and the consultations with key stakeholders suggest there is still a widespread viewpoint in Ireland that disability and work are not very compatible, and related to this a certain perception that:
Employers are better off not employing persons with disabilities; and
Public institutions can afford not to engage with persons with disabilities.
Reality reflects this viewpoint in various policies and practices. Many employers claim to have never recruited persons with disabilities – an unexpected situation given the high prevalence of disability in the working-age population (around 15-20%). More than in many other OECD countries, people in Ireland still view disability through a medical lens, as is illustrated in a number of regulations. For instance, persons on Illness Benefit or Invalidity Pension need an exemption to participate in training. A regulation according to which allowed work for persons on Disability Allowance must be “rehabilitative” (as determined by a doctor) has been removed with recent reforms.
Thirteen years ago, in 2008, just before the Global Financial Crisis, when the OECD published its last report on disability policy challenges in Ireland, we found a country with a very fragmented system of benefits and services, provided in a rather traditional, passive and reactive manner. Employment support, for instance, came still predominantly in the form of Community Employment in a sheltered environment, rarely leading to open employment. Early intervention was largely non-existent.
However, we also noticed that problems were well recognised and understood and many promising changes planned or underway. This included a plan back in 2008 to introduce customer-oriented active case management for all recipients of welfare payments, including disability payments, matched by the development of a Comprehensive Employment Strategy for persons with disabilities, focussed on enhanced service effectiveness. There was also increasing effort to connect the work of different departments through jointly agreed co-operation protocols.
What happened in the past 13 years, and where is Ireland now? Not all plans from 2008 were materialised: customer-oriented case management for people on disability payments was never implemented, and cross-departmental co-operation protocols remained ineffective for persons with disabilities. However, much has changed for the better. Intreo, implemented over the past decade, now delivers benefit payments and activation services together in a one-stop-shop and is in a stronger position today to serve jobseekers with health conditions or disability. Active engagement with both jobseekers and employers has seen a considerable push, even if this came to a pause during the pandemic. The Make-Work-Pay report, which emphasised the need for early intervention, especially for young people moving onto Disability Allowance, led to several improvements in the incentives to work for persons with disabilities.
Have these changes and ambitions brought the aspired improvement in employment rates for persons with disabilities in Ireland? Unfortunately, they have not. From 2011 to 2016, the employment rate of persons with disabilities has increased, but less than for other population groups, and the employment gap has widened further. This suggests that the small improvement may have been a consequence of the stronger economy predominantly, while policy change may have had little impact so far. This is the somewhat disappointing starting point of this analysis.
With the looming labour market crisis resulting from the ongoing health crisis, there is a risk that the situation will deteriorate. There might be a perception that this is the wrong moment to improve the labour market situation of persons with disabilities and to close the large disability employment gap in Ireland, as companies are struggling to survive and not really recruiting. However, it is the moment to think of policy change because we know from the past that persons with disabilities are unlikely to benefit from an upswing to the same degree as other groups of the population.
Ireland’s policy is currently delivered through the second phase of the Comprehensive Employment Strategy (CES) for Persons with Disabilities 2015-24, which identified six strategic priorities for the government, addressing all key aspects of a functional system. First, the promotion of education, skills, competence and independence. Second, the provision of individualised bridges into the open labour market. Third, the need to make work pay and for a streamlined return to disability payments for those who have to leave employment. Fourth, the need for support to obtain, retain or regain employment for those who acquire a disability. Fifth, the provision of seamless and co-ordinated services to support pathways to sustainable work. Sixth, the provision of support for employers to recruit and retain persons with disabilities and to facilitate the return to work after the onset of a disability.
This report has a focus on the sixth priority of the CES, the engagement of and support for employers, arguably because of less policy change in this field compared to the other priorities of the CES. A lacking focus on employer needs and concerns is, by some stakeholders, seen as the missing link for the CES to achieve its goals and employment targets. That said, the aim to achieve an employment rate for persons with disabilities of 38% by 2024 – a target that was set before the current health crisis – seems rather unambitious though suddenly more plausible, given the looming labour market crisis. It is worth mentioning that an earlier Irish strategy, the National Disability Strategy 2004, has already set a much higher but never achieved quantitative target (with a targeted employment rate for persons with disabilities of 45% by 2016). Also from this point of view, recent targets appear less ambitious but also more realistic.
Employer support and employer engagement is critically important for a successful disability policy for a number of reasons:
First, to overcome the often-cited fears and uncertainties of employers around the employment of persons with disabilities. Employers must have a place where they can get advice easily and at no cost, and governments must reach out to employers actively to provide information and dispel employer fears and worries.
Secondly, to raise the awareness about government programmes, subsidies and supports which employers and their workers can access to facilitate the recruitment and retention of workers with disabilities. Ireland has a number of promising programmes in place, the biggest weakness of many of which is their very low take-up.
Thirdly, to ensure that job loss associated with technological change does not affect persons with disabilities more than other groups of the population. Analysis in this report suggests job loss from technological change could affect persons with disabilities disproportionally. They are more likely to work in jobs with a significant risk of automation.
Fourthly, to ensure that persons with disabilities can benefit from the spreading of teleworking to the same degree as other workers. Analysis in this report suggests that, across Ireland and the OECD as a whole, at least one in three jobs are amenable to remote working. Working from home and not having to commute to a workplace on a daily basis could provide new opportunities for all workers and for persons with disabilities in particular.
Finally, to ensure that persons with disabilities can benefit from the next economic upswing. The Global Financial Crisis has further deteriorated the labour market position of persons with disabilities, leading to renewed efforts by the government to reach out to persons with disabilities. With the unexpected pandemic and the temporary shutdown of parts of the economy, these efforts have all come to an abrupt pause. Moving forward it will be critically important to prioritise persons with disabilities in labour market policies and programmes.
The small employer survey carried out as part of this project is not representative for Ireland, because of a low number of respondents, but the findings are illustrative and confirm what is known from other surveys. About one in two employers say that they do not have a staff member with a disability, four in ten say they would consider hiring someone presenting with a disability, and three in ten say they have hired someone in the past two years. At the same time, only 10% are aware of Ireland’s Reasonable Accommodation Fund while 70% say they have never received any advice from, for example, other companies, employer associations or organisations delivering disability services on how to integrate and retain people who identify as having a disability, but would like to know more about this type of support. All this suggests that disability and disability supports have not arrived in the employment mainstream.
While employer engagement and outreach is a weak element in Ireland’s policy landscape, the Department of Social Protection has taken steps in the right direction in the past few years through the implementation of an employer outreach unit. Its reach and resources, however, remained rather minimal. To fill this gap and pushed by the CES, the Employer Disability Information (EDI) service was introduced in 2016, as a peer-to-peer service through which employers can obtain the information they need in recruiting and retaining workers with disabilities. This was a timely step as the need for peer support is often expressed, including in the employer survey conducted as part of this project in which peer-to-peer support was found to be the most requested approach. However, the EDI remained small and without impact as it failed to reach small and medium sized businesses, and its funding ended after only a few years. A new contracted-out service was introduced in March 2021, under a new name (Employers for Change) but with a similar objective to provide an effective peer-to-peer service for employers. At this moment, it is too early to tell where the journey will go. The success of the new service will depend predominantly on the amount of resources attached to it: with a current budget of EUR 150 000 per annum, its impact ought to be limited.
Successful employer engagement needs a well-embedded and well-accepted structure, i.e. a service that employers know and can access easily and at no cost. The non-existence of such a structure is a major weakness in the Irish system, and finding the right place for it will be critical. In many OECD countries, the Public Employment Service (PES) has a twofold role as a provider of services for jobseekers and employers (and in some countries even threefold because the PES is also responsible for the training of employees). While Ireland’s PES struggles with its legacy as a service for hard-to-employ workers, it has changed remarkably in the past decade and has the potential to transform into a service for all jobseekers and all employers. The key issue is to resource an employer service appropriately, ideally ensuring every employer has a dedicated contact person to turn to in the nearest Intreo office.
If it was not for the PES to implement a strong employer function as an additional service, another effective structural solution must be sought within the public service. If employers have no place to go to receive advice and support, even better employer measures will remain ineffective. One possible alternative to the PES could be Enterprise Ireland with its network of local enterprise offices, which could take on additional tasks and functions. Another alternative could be the network of Regional Skills Fora, which were created as opportunity for employers and the education and training system to work together to meet the emerging skills needs of their regions but which could take on additional functions. Both alternative solutions, however, will be more costly as the local structure would have to expand. The PES with its network of local offices is the most logical candidate because it is also responsible for many of the programmes to support workers and employers seeking to recruit or retain workers with disabilities, thus allowing it to function as a one-stop-shop for employers and employees alike.
The Irish PES is in a much better position today compared to a decade ago, to deliver good services to jobseekers; not the least because benefits and services are now delivered together. However, comparative data also show that the employment service is under-resourced and the system generally still payment driven rather than employment driven. Activation of jobseekers has become the norm, with jobseekers being triaged (through statistical profiling) in one of three groups, according to their support needs: The most employable 20% is referred to self-service; the least employable 20% and young jobseekers under age 25 have monthly visits with their caseworker; and the remaining group bimonthly.
The PES has various supports in place to help long-term, harder-to-place unemployed people, including through i) Job Path (a contracted programme usually lasting 52 weeks and funded by results), ii) a network of contracted Local Employment Service offices that can offer a range of special supports, and iii) a network of contracted EmployAbility offices for jobseekers with either identified or self-declared health problems or disabilities. Through these additional arms of the PES and a number of special programmes, such as the Department’s Willing Able Mentoring programme (a wrap-around service for graduates with disabilities offering paid work experience), jobseekers with health problems or disability, and their potential employers, can access a range of highly promising supports. However, more could be done to ensure that the PES seeks to co-ordinate service delivery with other public authorities working in fields such as education, health, social, housing and child care, so to address the multiple challenges and barriers faced by those furthest from the labour market.
Contrary to regular jobseekers, persons on disability payments have no obligation to see a caseworker. As soon as one receives a disability payment, formal activation stops. The introduction of a grant of up to EUR 1 000 for jobseekers engaging with the EmployAbility service in the 2021 budget increases the incentives for persons with disabilities to see a caseworker. Nonetheless, the decision to engage remains a personal and voluntary one, contrary to the situation for other jobseekers. A formal consultation of the authors of this report with the disability sector has clearly shown that persons with disabilities often report disappointing experiences when contacting Intreo and its service arms, including for example the lack of a dedicated case manager. This suggests that there is a need for clear guidelines on the way in which Intreo has to engage with persons on disability payments.
Research from other countries has demonstrated the effectiveness of activation and the drawbacks from voluntary engagement with employment services. However, there is no consensus in Ireland about the form participation requirements could take for persons on disability payments. For some among them, such requirements may indeed be inadequate, but the large majority of recipients of disability payments could (and would like to) work. There is a widespread misconception of activation as a policy instrument aimed at forcing people into work, rather than being a measure to keep benefit recipients engaged, and to work on identifying abilities and opportunities and on taking steps towards better employability and employment for all. The lack of any participation requirements for persons on disability payments in Ireland certainly contributes to the low take-up of programmes and services for this group.
Take-up of programmes and services available for employers is equally low. There is a strong belief that employers are unaware of the supports available for them. Employer surveys, including the one conducted as part of this project, support this belief. However, there are broader issues, which awareness-raising campaigns alone – which are also necessary – cannot address and solve. Employers and small and medium-sized enterprises in particular tend to avoid engagement with government agencies, fearing bureaucracy and paperwork. When looking for new recruits, employers will look for the best-qualified or best suitable candidate. Also this was confirmed in the employer survey as part of this project: employers who have recruited a person presenting with a disability have in almost all cases done so because the applicant was the best candidate. There is a need to ensure that persons with disabilities are not excluded from the recruitment process – a frequently raised experience by such workers – but the key success factor for an eventual recruitment are the skills of the job applicants.
In the skills space, two aspects matter: initial skills formation and further education and training in adulthood. The high share of persons with disabilities leaving the education system prematurely is a huge challenge, which no adult learning system can easily correct. While initial skills formation goes beyond the scope of this report, it is critically important for labour market outcomes later in life. It appears that inclusive education, introduced in Ireland later than in many other OECD countries, has yet to translate into inclusive learning outcomes and inclusive transitions into the labour market. Related to the latter, apprenticeships, which can provide an effective bridge to employment, are used less in Ireland than in other OECD countries and used very little by persons with lasting health problems or disabilities.
The adult learning system in Ireland is in a good position in principle with SOLAS as a state agency and national funding authority for skills programmes and the above-mentioned network of Regional Skills Fora, which are well embedded in the regional labour market. Participation in adult learning nevertheless remains a challenge. SOLAS data suggest that learners with (self-declared) disability are under-represented among all learners and tend to take low-level courses more frequently and that many of them are outside the labour market and relatively few of them employed. Data from population surveys suggest that workers with disabilities are much less likely than their peers without disabilities to participate in both on-the-job training and formal training paid by the employer.
Programmes delivered by the PES and by training providers therefore struggle with the same challenge or limitation: participants with disabilities are highly under-represented. More efforts are necessary to ensure a higher representation of persons with disabilities on mainstream programmes for the entire population. The current mainstreaming approach in Ireland is one of allowing everyone to access mainstream support but the concept of mainstreaming goes much further than this. Training providers and the PES must reach out to disadvantaged groups, including persons with disabilities, to ensure their equal representation on successful programmes. This is especially important without any form of participation requirements for persons on disability payments. Better inclusion of persons with disabilities is often a matter of inclusion in mainstream support, not one of developing more and more specialised support.
Nevertheless, successful special programmes for persons with disabilities must be in focus also, such as supported employment interventions, which place jobseekers with disabilities in a job in the open labour market and provide ongoing support to the worker and the employer to sustain the work relationship. The national scale up, since 2018, of Individual Placement & Support (IPS) for persons with mental health conditions is, therefore, most welcome. A number of issues are at stake during this roll-out. First, successful programmes are capped and therefore do not reach many; programme evaluation should demonstrate the cost-effectiveness to stimulate further investment in IPS. Secondly, while IPS has shown repeatedly to facilitate transitions into employment, it will also be important to sustain these jobs and facilitate mobility and career progression. Thirdly, with the trials outsourced to employment providers but funded by the Department of Health, not the PES, IPS demonstrates the critical importance of strong co-operation across government departments and agencies. At the same time, the current funding situation also – yet again – reflects the medical focus on disability taken in Ireland. Funding shared between departments would probably be the best way to stimulate co-operation between the health and the employment sector.
Disability management for many companies has become part and parcel of a wider diversity strategy. This can be problematic where disability finds itself at the very bottom of all diversity issues. Adopting a Universal Design approach is thus key to creating an inclusive work environment. By adopting a Universal Design approach, employers are ensuring their products, services, communications, public services and the built environment are universally designed and easy to access, understand and use for everyone.
Good people management is equally important. Jobs of high quality and high-performance work practices have the largest impact on making labour markets inclusive and, thus, also disability inclusive. Such management practices are less widespread in Ireland than on average in OECD countries and much less widespread than in the Nordic countries, the vanguard countries for good people management. Good human resource and workplace policy that supports the development and spreading of high-performance work and management practices is good disability policy.
A related issue is the scarcity in Ireland of high-quality part-time employment, which could offer jobs and pathways for people who are not able to work full-time. Good part-time jobs could also be a building block in improving job retention for workers acquiring a disability. It is often not very costly to accommodate workplaces and work routines to allow people to continue working with a disability, and employers also have an obligation to provide reasonable accommodation that is not a disproportionate cost. In particular, the use of assistive technology is in most cases an inexpensive way to facilitate job retention and job hiring alike. Even if costs for employers may arise, Ireland has a well-resourced Reasonable Accommodation Fund, which can cover a significant share of the cost of work accommodation. Like with other public programmes, however, the awareness and use of this fund by employers is disappointing.
In this context, another element of the Irish policy environment comes to fruition. Irish employers have lower responsibilities and financial incentives than in many other OECD countries to ensure good working conditions and prevent sickness and disability of their workers. The costs of ill health are socialised almost entirely. Ireland is one of the very few OECD countries without statutory sick pay, for example, implying that many workers rely on a rather low Illness Benefit when falling ill. Data on the share of workers covered by voluntary sick pay are not available but the limited information that is available suggests it is only a minority of workers. Ireland is also among the minority of countries in which the cost of workplace accidents and occupational diseases are fully socialised. Such setup makes it unattractive and almost unnecessary for employers to invest in workplace health and safety.
The introduction of statutory sick pay planned for 2022 will be an important albeit small step in the right direction. Most importantly, sick-pay regulations should be complemented by return-to-work support and corresponding obligations for both employers and employees. Additional steps to internalise the cost of work-caused injuries and diseases would also be welcome. This may seem unpopular with employers but will eventually benefit employers investing in health promotion and applying good management practices.
While this report focuses on priority six of the CES, employer supports and engagement, the impact of other relevant building blocks of the Irish disability policy system are equally important. Despite recent reforms, for example, work disincentives remain a critical barrier for persons with disabilities. Larger earnings disregards for Disability Allowance (DA) recipients and Medical Card holders can alleviate the situation but cannot do away with the structural barrier. Linking health care access with benefit entitlement is a structural mistake from both an equity and a work incentives perspective. A much more fundamental and equitable solution – and one that goes way beyond the scope of this report – would be to ensure access to universal health care which would allow the government to abolish the Medical Card.
Despite reform, DA numbers keep increasing. Ireland should revive and implement quickly its early engagement plans for those under age 22 who transition directly from education into DA, paused during the pandemic. Evidence suggests that every second DA recipient is interested in working. Foregoing their interest and work ability is a costly mistake. Other OECD countries are not granting disability benefits before having exhausted all possibilities of vocational rehabilitation, and some (such as Denmark) go as far as not granting any long-term disability benefit before age 40, thus putting massive pressure on the public authorities to improve employability and find employment for young adults with disabilities. Ireland should also consider implementing a clear vocational rehabilitation pathway, with shared responsibilities for the employer. Vocational rehabilitation helps to restore and develop skills and capabilities of employed persons with disabilities, so that they can continue to participate in the general workforce.
The lack of early engagement also largely explains both the low uptake and the low employment impact of Partial Capacity Benefit (PCB), introduced about a decade ago. Recipients of Illness Benefit or Invalidity Pension eligible to apply for PCB will often have been away from their job or the labour market altogether for a long time. The system does not appear to have the capacity to expand services for PCB clients, and the voluntary nature of PCB, the entitlement conditions and the associated loss or reduction in secondary benefits are not conducive to a higher take-up. A combination of measures could help to improve the effectiveness of PCB, including making it mandatory for those fulfilling the entitlement criteria, bringing it forward in time, improving the employment support coming with it, and turning part of PCB into an in-work payment, similar to partial disability benefits in the Netherlands.
Disability reform is a challenging task for a government as any change is perceived to create losers, and winning the support of the disability sector may seem difficult. Leadership across a number of different departments to work together to address structural issues is therefore critical. In practice, structural reform includes two interlinked challenges: agreeing on a better system and transitioning to the new system. Grandfathering current recipients and applying new regulations to new applicants only can ease the transition even though such an approach also creates inequalities. Some types of reforms, however, such as measures affecting employer incentives, will have to be more abrupt.
Disability reform requires a whole-of-government approach, as the potential savings resulting from any change under the responsibility of one department may accrue in another department and vice versa. Disability reform also requires political leadership. The ratification in 2018 of the UN Convention on the Rights of Persons with Disabilities may help to drive the appetite for change. Ultimately, higher employment participation is much better for persons with disabilities and for the economy.