Disability benefit expansion adds to workless underclass

In 2007, after more than a decade of booming employment creation, Ireland had the second highest proportion of households in the EU in which no adult worked. In many ways this is a greater indictment of the political system than the failure to countenance, never mind prepare for, the possibility that the boom could end in bust.

One of the reasons for such a high rate of household joblessness was a sharp rise in the numbers on disability benefits.

Among the best reasons to believe in the welfare state is the manner in which it alleviates suffering for those born with a disability or those who become disabled during their lives. This is just one reason why I am a believer in the European welfare state model.

But as many countries have discovered, even the best intentioned welfare programmes can have unintended consequences. When those are as potentially serious as generating welfare dependency, they must be analysed and discussed.

If they are found to create poverty traps they must be reformed.

Extraordinary reluctance

In Ireland there is an extraordinary reluctance even to discuss this issue among both the policymaking and scholarly communities. That reluctance exists despite very strong evidence pointing to a sustained masking of the scale of Ireland’s unemployment problem – during the boom years as well as the bust – via the system of disability and illness benefits.

In 2011, just under a quarter of a million working-age adults in Ireland were on one of the four main disability and sickness benefits – disability allowance, disablement benefit, the invalidity pension and illness benefit. Approximately one in 12 people aged 16-65 in the State was in receipt of one of these four benefits.

The proportion of the population in receipt of disability allowance – the most common disability benefit – has been rising fast and without interruption for more than a decade, as the chart shows. In absolute terms, the numbers in receipt of this benefit doubled in a decade to exceed 100,000 people.

The proportion of adults under 60 years of age not working owing to disability has been well above European averages since comparative figures were first collected in 2004. Between 2004 and 2007, the height of the boom era, it was almost twice the euro zone rate, according to unpublished figures obtained from Eurostat. By 2010, the recession had pushed the rate to the highest among the euro zone’s 17 states.

A separate set of Eurostat figures, which covers only 2008-2009, shows that the percentage of adults with a disability who work in Ireland went from the second lowest rate among the EU 27 to the lowest over that 12-month period.

But the health of Irish people has improved, not deteriorated markedly, over time. Nor is there a shred of evidence to suggest that those with disabilities in Ireland are very much more incapacitated by their disabilities than their European counterparts, and thus less able to work.

What actually happened was that, in order to avoid addressing long-term unemployment, governments eased access to disability benefits. By so doing they have expanded and entrenched a permanently workless underclass.

Irish society has a proven capacity to ignore even the most serious problems, only to wonder later why on Earth nobody said or did something sooner. We are doing it again. Failure to address this problem could have grave consequences.