AÑOS ATRÁS
M: No (repitió ahora con un pequeño deje de angustia al verlo tan enfadado) no lo haré, y si hace falta me voy de casa y me busco yo misma la vida
the
Relationship
Between
Disability and
Poverty
38 See Chapter 7 and Appendix V of the Report for details.
39 Once again, these are the Report of the Working Group on the review of the Illness and Disability Payment Schemes (2003) See Chapter 7 and Appendix V of the Report for details.
It is useful in this context to distinguish between adults of working age and those aged 65 years or over. Disability itself is strongly related to age, and there is also a marked relationship between age and poverty. The percentage of adults in the 2001 LIIS reporting a chronic illness or disability rises from about 12 per cent in the 25-44 years age range to about 16 per cent between 45 and 64 years, and then rises much more sharply to 35 per cent for those aged 65 years or over. As a consequence, 35 per cent of the adults reporting a chronic illness or disability in the survey are aged 65 years or over; of those aged between 15 and 64 years and reporting such an illness/disability, half are aged between 45 and 64 years.
Table 8.5 shows how both poverty risk and consistent poverty vary by age, for those who do versus those who do not report a chronic illness or disability. There is a heightened poverty risk for ill/disabled people throughout the age groups, but the gap between them and others is proportionately greatest in the 45-64 year age range. On the other hand, poverty risk itself peaks in the age group 65 years plus. While risk of poverty rises sharply for over-65s among those not reporting disability, though, for those with a disability there is a much more gradual increase with age in the risk of poverty.
Table 8.5: Poverty and Illness/Disability by Age, Adults, Living in Ireland Survey 2001
% “At Risk of Poverty” % Consistently Poor Years Ill/Disabled Not Ill/Disabled Ill/Disabled Not
Ill/Disabled Age 15-24 28.0 14.7 2.2 4.3 25-34 15.1 10.8 3.8 2.5 35-44 18.2 15.8 5.9 2.8 45-54 37.6 12.6 11.2 1.6 55-64 46.3 19.1 13.5 4.7 65+ 49.5 37.3 6.0 1.6
Focusing on consistent poverty, the consistent poverty rate is higher for the ill or disabled group than for all others throughout the age range, except in the youngest age category. The gap between the incidence of consistent poverty for the disabled and others is now proportionately greatest in the 45-54 and 65+ age ranges. However, the rate of consistent poverty for those reporting chronic illness/disability is highest in the 45-64 year range, not among those aged 65 years or over.
Among those of working age, those with a disability are much less likely to be in work than others in the same age group, and this is the most obvious and direct channel of influence from disability to poverty. Gannon and Nolan (2004) found that about 40 per cent of those reporting a longstanding/ chronic illness or disability and of working age in the Living in Ireland Survey were in employment, with the remainder mostly not active in the labour force (rather than unemployed). This compared with an employment rate of close to 70 per cent for those not reporting such an illness or disability. Other data sources such as the Census of Population and the Quarterly National Household Survey also show people with disabilities having much lower employment rates than others (see also NDA, 2005). (Those who are at work are also more likely to be part-time: the QNHS
shows that one-quarter of those with a disability at work are working part- time, versus 16 per cent for the rest of the working-age population.)
Not all of that difference in employment rates may be attributable to the presence or absence of disability per se, because those who report disability may also have other characteristics that disadvantage them in the labour market – for example in terms of age, gender, education and skills, or geographic location. (Some of those other disadvantages may themselves have been affected by the presence of a long-standing disability, of course, for example, level of education). Analysis of cross-sectional data incorporating such characteristics in Gannon and Nolan (2004a,b) showed that those reporting a longstanding/chronic illness or disability that hampers them in their daily activities or restricts the kind of work they can do have a significantly reduced probability of participating in the paid labour force. For men who report being severely hampered or restricted, that reduction is as much as 60 percentage points or more, while for women it is about 50 percentage points. For those who report being hampered or restricted “to some extent” rather than severely the effect is much smaller but still substantial. On the other hand, for those reporting a longstanding/chronic illness or disability that did not hamper or restrict them, the probability of being in the labour force was similar to others of the same age, gender and educational attainment and not reporting any such condition. Gannon and Nolan (2006) showed that disability that persisted over the life of the Living in Ireland Surveys had a particularly pronounced impact on employment rates and consequently on poverty outcomes.
As well as the work status of the individual with a disability, the numbers in the household at work have a crucial impact on poverty and poverty risk – and this is the case both for working-age individuals with disabilities and those with disabilities aged 65 years or over. Nolan and Gannon (2006) brought this out by distinguishing three sets of persons, within different age categories:
1. Those not reporting a chronic illness or disability,
2. Those reporting a chronic illness or disability but not “at risk of poverty” (i.e. in households above the 60 per cent of median income threshold), and
3. Those reporting a chronic illness or disability and “at risk of poverty” (i.e. in households which are below the 60 per cent of median income threshold).
For each of these groups it then looks at the proportion in households where no-one was at work, where one person was at work, and where more than one person was at work. The results for those aged under 65 years showed that those reporting a chronic illness or disability who are “at risk of poverty” are mostly in households where no-one is at work; very few indeed have more than one person at work. In the 45-64 year age range, for example, four-fifths of those reporting chronic illness/disability are in households with no-one at work. So this is clearly a central influence on the income of the household and its poverty risk. For those reporting chronic illness or disability but not “at risk of poverty”, by contrast, only a small minority are in households with no-one at work, and a high proportion are in households with two or more people at work (close to the proportion for those who are not ill or disabled).
For those aged 65 years or over, the number at work in the household is less important but still has a role to play. For over 65s who are ill or disabled but above the poverty risk income threshold, about 30 per cent are in households where someone is at work, and about 10 per cent have two or more at work. For over-65s with a disability or long-term illness and whose incomes are below the threshold, on the other hand, only 10 per cent have someone in the household at work and hardly any have more than one.
The related issue of sources of income coming into the household, and in particular the extent of dependence on social welfare payments, is examined in a summary fashion in Table 8.6. This shows that for non- disabled people, on average over 80 per cent of the income of the household came from work – from earnings or self-employment income. For those with a long-term illness or disability but above the risk-of poverty line, while the share was lower, still about two-thirds of household income was from work. For people who were ill or disabled and “at risk of poverty”, by contrast, only 10 per cent of income was from work and 86 per cent was from social welfare payments.
Table 8.6: Poverty Risk, Illness/Disability, and Main Source of Income, Adults, Living in Ireland Survey 2001
Main Source of Income
Not Ill/Disabled %
Ill/Disabled but Not “At Risk of
Poverty” % Ill/Disabled and “At Risk of Poverty” % Work 81.4 67.0 10.0 Private Pension 4.2 13.7 0.7 Social Welfare 13.3 18.3 86.5 Other 1.1 1.0 2.8 Total 100.0 100.0 100.0
So what distinguishes people with a long-term illness or disability in households below the “at risk of poverty” threshold is that their households have little engagement with paid work and are highly dependent on social welfare. Statistical analysis shows that even when one controls for age, gender, region and household composition, the estimated effect of having a hampering chronic illness or disability on the likelihood of being “at risk of poverty” and consistently poor is pronounced.40 Overall, the increase in the proportion “at risk of poverty” where the individual was severely hampered, was 22 percentage points; where the individual was hampered to some extent the increased rate of being “at risk of poverty” was 12 percentage points. Whereas the consistent poverty rate was about 7.5 per cent for someone without an illness or disability, an individual with a severely hampering illness or disability was predicted to have a rate between 6 and 13 percentage points higher. Someone with an illness or disability that hampers them to some extent had a predicted rate of consistent poverty that was 2-4 percentage points higher. A substantial proportion of this effect (perhaps up to half) operates through the individual’s education level and whether he or she was in work.
I
n thinking about policies designed to address poverty among people with a disability, income support is of central importance but is by no means the whole story. As highlighted in the Report of the Working Group on the Review of the Illness and Disability Payment Schemes (2003), promoting employment also has a key role to play, and a variety of measures across different Departments and agencies are involved in that context. Without looking in any detail at these measures and how their effectiveness might be improved, we can examine the impact that greater success in promoting employment among people with a disability would have on the incomes and poverty risk of their households. First, though, we concentrate on income support and on the potential impact of channelling more resources through existing schemes and/or introducing a new scheme to help meet the costs associated with disability.8.5
Policies
Aimed at
Reducing
Poverty for
People with a
Disability
As far as the current structure of income support is concerned, a person who is ill or disabled may qualify for one of the following:
• Illness Benefit (called Disability Benefit up to 2006) for people who are currently incapacitated for work;
• Invalidity Pension, for people who are permanently incapacitated for work;
• Occupational Injury Benefits (including Injury Benefit and Disablement Benefit) for those who are injured at work or contract a prescribed occupational disease;
• Disability Allowance and Blind Person’s Pension, means-tested support for people whose employment capacity is substantially reduced because of their disability;
• Supplementary Welfare Allowance, means-tested support for people who are incapable of work and not entitled to Illness Benefit (e.g. because they do not meet the social insurance contribution conditions).
We look at the impact of a rise of 10 per cent, and of 20 per cent, in the welfare payments on these schemes, in the context of an overall rise in welfare payment rates at these levels, and here try to identify the impact of such a policy change on the risks of poverty facing people with a disability. Table 8.7 shows the main results.
Table 8.7: Reduction in Poverty Risk for People with a Disability from Increases in Welfare Payment Rates
No Chronic Illness/Disability Chronic Illness/Disability and Somewhat Hampered Chronic Illness/Disability and Severely Hampered Baseline 2007 12.9 33.8 40.4
With 10 per cent increase in welfare payments
10.3 26.2 31.0
With 20 per cent increase in welfare payments
8.5 21.2 22.0
It is clear from these results that welfare payment increases could play a substantial role in reducing the risks of poverty facing disabled people. A 10 per cent rise in welfare payment rates leads to a fall in risk from about 40 per cent to around 30 per cent for those who are “severely hampered” and to a fall of about 8 percentage points in the risk for those who are “somewhat hampered”. An increase of 20 per cent would have further, substantial effects. These results are discussed further in Chapter 12.
Many people with a disability are not in receipt of disability-related income maintenance schemes, and for the most part these schemes are designed with an income maintenance function in mind, that is they are intended to substitute for income from work, rather than to meet the additional costs associated with disability. (Disablement Benefit is an exception in that it is intended to compensate for loss of physical and mental faculty and can be paid regardless of the labour force status of the claimant.) 41 The Report of the Working Group on the Review of the Illness and Disability Payment Schemes took the view that needs arising from the additional costs of disability should be addressed separately to income maintenance needs, echoing the Report of the Commission on the Status of People with Disabilities (1996). A Working Group under the partnership process spent some time considering such a costs of disability payment, and at present there is a commitment in the Disability Sectoral Plans and in the partnership agreement Towards 2016 to consider this as Independent Needs Assessment of those with disabilities is rolled out.42
The core difficulties in framing such a scheme are the accurate identification of the costs involved, which vary very widely across individuals, and the design of an administrative mechanism that would allow varying levels of support to be delivered. A report by Indecon for the NDA (2004) examined the costs associated with disability in Ireland and reviewed international evidence. Because of gaps in data on disability and the wide variation in the needs of different individuals, this did not establish a definitive figure of the average cost of disability, but did show that there were extra costs of living related to disability over and above those which are currently met by state services or supports, for example, extra costs for heating or transport. It quotes studies elsewhere estimating the extra cost of living for people with a high level of disability at €40 a week or more.
Here we have only quite crude information on the severity of the impact of disability available in the Living in Ireland Surveys, namely whether the person reports that they are hampered severely, to some extent or not at all. As a preliminary and necessarily very tentative exercise, we look at a scheme that pays those reporting severe limitations €20 per week, those reporting some limitations €10 per week, and nothing to those who report a disability but say it does not hamper them. The additional costs associated with disability might not in fact be closely linked to the degree of
41 See Report of the Working Group on the Review of the Illness and Disability Payment Schemes (2003) para. 2.14-2.16 on this distinction.
42 The reference in Towards 2016 states that “…issues around cost of disability will be considered following the development of a needs assessment system provided for under Part 2 of the Disability Act, 2005”.
hampering involved, but this may serve to illustrate the very broad impact such a scheme might have.
Table 8.8 shows the estimated impact of such a scheme on measured risk of poverty. The €20 per week supplement for those who are severely hampered by a disability leads to a 5 percentage point fall in the “at risk of poverty” measure from 40 per cent to about 35 per cent. The €10 per week supplement for those “somewhat hampered” by a disability leads to a smaller, but significant, fall of about 3 percentage points.
Table 8.8: Estimated Impact of a “Tailored” Disability Supplement Category Baseline Poverty Risk Poverty Risk with a
Supplement
Persons with a chronic illness/disability, somewhat
hampered 33.8 30.6
Persons with a chronic illness/disability, severely
hampered 40.4 34.9
All persons 16.9 16.0
Finally, we return to the issue of employment and on the impact that increasing the employment rate of people with a disability would have on poverty risk. Here, we simply explore the potential impact of an increase in employment for people with a disability. This is intended to give an idea of how much can be expected from this source in terms of reduction in poverty risk. Currently, the employment rate for people with a disability stands at about 33 per cent. The employment rate for persons without a disability is about twice that level. What would be the impact of a substantial rise in the employment rate for people with a disability? We consider the impact of a 10 percentage point rise in the employment rate, assuming that the risks of poverty remain the same for individuals in the same employment and disability classification. Thus, the risk is reduced from about 50 per cent to about 12 per cent for a person with a disability moving from unemployment or non-employment into employment. On this strict assumption, we find that the risk of poverty for people with a disability would fall from an overall level of about 37 per cent, to around 34 per cent. While this is a significant fall, and there are gains beyond the income gains taken into account in this calculation, this result does point to the fact that employment is not likely to provide a complete solution to the heightened poverty risks facing people with a disability.