Ireland's disability allowance is a means-tested welfare payment made to qualified residents between the age 16-65 (the payments switches to a pension on the 66th birthday) — see here for rules — and the number of people paid the allowance has risen from 110,000 in 2006 to 154,000 in 2014 — a jump of 40%. However, at 5% of the working age population in 2014, Ireland's rate is lower than several other Organisation for Economic Cooperation and Development (OECD) developed countries.

 

A link to the original data are from the Department of Social Protection and other data can be found in our pre-Budget 2016 post when we reported last October that more than half the Irish population, including farmers in receipt of EU Common Agricultural Policy payments, receive public income supports.

Half Ireland's population paid public income supports in 2014

Ireland's positive demographics suggest it should have a lower disability rate than other countries in Europe.

According to Eurostat, the EU's statistics office, the population of the EU-28 on 1 Jan 2014 was estimated at 506.8m. Young people (0 to 14 years old) made up 15.6 % of the EU-28’s population, while persons considered to be of working age (15 to 64 years old) accounted for 65.8 % of the population. Older persons (aged 65 or over) had a 18.5 % share (an increase of 0.3 % compared with the previous year). Across the EU member states, the highest share of young people in the total population in 2014 was observed in Ireland (22.0 %), while the lowest share was recorded in Germany (13.1 %). Regarding the share of persons aged 65 or older in the total population, Italy (21.4 %) and Germany (20.8 %), while Ireland had the lowest proportion (12.6 %).

Last week we reported that the broad rate of employment was at 19% with 412,000 people on either the Live Register or in publicly funded activation schemes (81,000). Some of the 154,000 disability allowance beneficiaries cited above, are approved to do rehabilitative work and recipients can also participate in the JobBridge activation scheme — however the numbers in these categories is likely not significant.

In Census 2011, the number of the population with a disability was at 595,000 — up from 394,000 in 2006. The total population was at 4.6m in 2011, and the disability rate rose from 9.3% to 13.0% — the data are not reliable. In the 0-14 years age group, there was a 92.1% increase in disabilities in 2002-2006 and a rise of 59.5% in the period 2006-2011.

Comparable rates for disability in the US and UK populations are 19% — here and here.

In 2006 the CSO added a separate National Disability Survey using a sample from the general population:

The inclusion of this general population sample raised the overall disability prevalence estimate to 18.5% although given the small sample size this should be regarded as only an indicative prevalence rate.

In 2011 questions were broadened and the rate rose but it's likely that the overall percentage was still understated. Limerick City had a rate of 18.2% and Galway City 11.9% — it's probable that fear that enumerators would see the potentially embarrassing information was a factor.

In 2006 15.6% of the 394,000 who declared a disability, reported a 'Psychological or emotional problem' while in 2011 14.9% did.

Eurostat reported in 2014, based on Labour Force Survey (LFS) data that about 28% of people aged 15-64 in the EU reported a longstanding health problem or a basic activity difficulty, or both. This varied by country, ranging from 14% in Greece and Ireland (it appears that the CSO did not produce separate data to Census 2011) to over 50% in France and Finland.

A relatively small number of people report having difficulty with basic activities: under 2% of the population in three-quarters of the countries in 2011. Austria and Luxembourg had the highest percentage of people reporting these difficulties, at 5 % and 4 % (see Figure 1). Conversely, longstanding health problems are far more frequent in the EU as a whole (14% of the population), ranging from a comparatively low 4 % in the Netherlands to a considerable 34% in Finland. People in Finland and France had a relatively high proportion (approx. 20%) of people aged 15-64 reporting both a longstanding health problem and difficulties with basic activities (which may be interrelated), while Ireland and Malta had a small proportion of people with these difficulties, at approx. 5%.

When it comes to health how reliable is self-assessment?

Eurostat reported in 2015 that the average interview duration per person for the 2011 LFS AHM varied from 24 seconds for Ireland to around 15 minutes for France (see chapter 2 for the number of questions).

People with disabilities in Ireland had an employment rate of 32% in 2005 according to the OECD and according to the 2015 Eurostat report "the percentage of employed persons was less than 30% for Ireland and Hungary. Conversely, it exceeded 60% in Austria, Luxembourg, Finland, Sweden, Iceland and Switzerland. For all the countries, the percentage of persons employed in the group reporting a disability was smaller for the second definition."

Ireland disability claims, jobs, employment

Rise in disability claims

Public spending on disability benefits totals 2% of GDP on average across the OECD in a 2010 report, rising to as much as 4-5% in countries such as Norway, the Netherlands and Sweden. Around 6% of the working-age population rely on disability benefits, on average, and up to 10-12% in some countries in the north and east of Europe

The OECD added:

Mental health problems are now the biggest single cause for a disability benefit claim in most countries, in Denmark, the Netherlands, Sweden and Switzerland accounting for almost half of all new claims; and employment rates of those suffering from mental ill-health are particularly low. Disability policies are not well suited to deal with mental health problems, and they do not work well for people suffering from mental ill-health ( e.g. the take-up and effectiveness of employment services is even lower for this group). There is still substantial uncertainty as to the key drivers behind this development, but they seem to include changes in the acceptance of mental health problems in society and the associated changes in attitudes of doctors and disability systems in addressing problems that have long existed, as well as improved diagnostic tools.

The rise in Irish disability allowance beneficiaries by 40% in 2006-2014 compares with a 7% rise in the population over the period.

Norway, an oil producer and Europe's richest country, has disability benefits at a low double digit rate of its working age population and it also has high sickness benefit.

The OECD said in 2103:

...one in five Norwegian workers and one in two unemployed people have a mental disorder. Spending on sickness and disability benefits is the highest in the OECD at USD 18 billion per year. This is equivalent to nearly 6% of Norway's annual GDP or 40% of the government revenues from its oil and gas exports. Mental disorders account for a steadily increasing share of this spending. Productivity is also affected, with around four in five workers with a mental health problem underperforming for health reasons on any given day. While unemployment is low in Norway, sickness and disability benefit caseloads are the highest in the OECD. The poor labour market outcomes for Norwegians with mental ill-health are striking given the country’s high spending on education, health care and vocational rehabilitation. The generous welfare system is partly to blame because it is a trap for vulnerable people, says the report.

Norway's retirement age is 67 and as in other countries, the disability system is used to facilitate early retirement. Canada has a low rate of beneficiaries and a low level of payments.  

The OECD said in March in its 'Fit Mind, Fit Job' report:

Early action in the benefit system brings to the fore two policy tools critical to helping people back to work quickly and successfully: unemployment benefit and (where it exists) sickness benefit. Few unemployment systems are equipped to deal with mental ill-health despite its high and growing incidence. Indeed, prevalence is growing in many countries – as data from countries like Austria, Australia and the United Kingdom attest. The chief reason is that structural reforms to the disability system in many countries, which seek to restrict access only to those unable to work, have meant that more people with health problems and reduced work capacity are remaining in the unemployment system.
Unemployment systems should therefore seek to identify jobseekers’ underlying mental health problems, the obstacles those problems create to labour market reintegration, and the treatment needed to secure sustainable employment. Among the countries reviewed by the OECD, Belgium has moved furthest in this direction: in the past years, 12% of the longer-term unemployed in Flanders were submitted to an in-depth screening (OECD, 2013a). In the United Kingdom, the Employment and Wellbeing Toolkit was introduced in 2014 to support employment coaches in identifying well-being needs for employment and appropriate interventions to enable job attainment among claimants with mental health problems.
...in some OECD countries, such as Sweden and Norway, the sickness benefit system encourages partial sick leave to maintain the workplace connection and foster gradual return-to-work (e.g. OECD, 2013b). To ensure timely return-to-work, sickness benefit policies should have well-established procedures for ensuring regular contact between sick workers and employers though not ignoring issues of confidentiality. In a few countries this is being realised by including the treating doctors and the development of individual return-to-work plans, but even in these cases this policy is not always well implemented and monitored.
Data show that many people with common mental illness struggle at work. For example, 69% of the people with moderate mental health complaints report having problems in job performance compared to 26% of the people without mental health complaints. There is a strong business case for addressing the issue, yet employers hold on to poor workplace practices. A first step in the right direction in many countries is the amendment of labour law to include obligatory and far-reaching psychosocial risk prevention. It would be especially effective if complemented with clear guidelines and concrete tools for employers and labour inspection authorities, as in Denmark (OECD, 2013c). In all of the reviewed countries, however, the implementation of psychosocial risk prevention is slow, as traditional issues continue to dominate health and safety policy and the widespread psychosocial issues remain neglected.