Public Sector Pay

69. Deputy Joe Cooney asked the Minister for Children, Disability and Equality if she will confirm that pay increases agreed under the public sector pay discussions will automatically apply to health and social care workers employed by section 39 organisations. [65462/26]

In March 2025, a commitment was given that section 39 workers would be brought into future public sector pay agreements automatically. I accept that budget 2027 is not finalised and that public sector pay discussions have not started but I would like confirmation from the Minister today that the commitment given in 2025 will be upheld for the people and organisations delivering front-line disability, older person and community services on behalf of the State.

The March 2025 pay funding agreement for workers in community and voluntary health and social care organisations, whom Deputy Cooney has referenced, represents a significant investment in the sector and provides certainty for workers and their employers on the application of future pay adjustments in the public sector. The agreement was negotiated between Government Departments and unions, with the involvement of relevant funding agencies and employer representatives, with, as always, the assistance of the Workplace Relations Commission. The agreement includes funding for a 9.25% pay increase for workers directly employed by these independently operated organisations. In funding terms, the deal amounts to an increase of approximately €70 million per annum for the organisations delivering specialist disability services and supports funded by the HSE. Taken together with the earlier October 2023 agreement, which provides for an 8% increase, this amounts to a 17.25% increase in available pay funding over a three-and-a-half year period. The final increase provided for in the agreement, a 2% general round increase, is due to be applied on 1 October. The level of funding increase for individual service providers is assessed and validated by the HSE with reference to the service agreements in place. This ensures the uplift takes account of pay-related costs in each service agreement. In a landmark step by the Government the arrangements also include automatic linkage for these workers to general round increases in any future public sector pay agreement. This treatment is an important step forward for workers and has been a landmark step forward by the Government and much sought after by workers. It is a huge assurance and reassurance to them that there is automatic linkage to any general round increase, not only in the upcoming public sector pay agreement but public sector pay agreements going forward also.

Section 39 workers have been left behind. After the crash their pay was cut in line with the public service but it has never been restored in the same way. It has taken over a decade, with the Labour Court and threatened strike action, to begin to close the gap. We are still not there. Even the agreement reached in 2023 was not fully honoured because the funding released to the section 39 organisations did not cover the full cost to employers, including pension and PRSI contributions. Small providers without reserves or fundraising capacity could well be pushed towards cutting services rather than staff. Funding levels for section 39 organisations must cover the full cost of employees' salary increases as well as their pensions and PRSI costs. Has this been raised by the Minister and the Department in the current budget discussions?

I reiterate that the agreements reached in recent years, including the 9.25% increase and the 8% increase in 2023, are a 17.25% increase over a three-and-a-half year period. This is significant. As always, the Government's priority is to protect vital services for those who rely on them while ensuring sustainable employment for the dedicated workers who provide quality supports and services. The phased increases recognise that staff should be fairly paid for the difficult work they do. Notably, the ability of organisations to actively recruit and retain staff has also improved as a result of these funding agreements. To respond to Deputy Cooney's point, as part of the agreement a comprehensive data-gathering exercise is being conducted on pay and funding arrangements in the sector. This exercise is crucial in order to create a shared understanding of the sector. The outcome of the exercise will inform targeted measures on the low pay issues that affect the long-term sustainability of services and it is expected that this work will be finalised shortly. These arrangements relate to services funded through statutory grant aid arrangements, funding for services commissioned through tendering arrangements, which is not covered-----

The consequences of a failure to deliver a fully funded package for section 39 staff and organisations will, unfortunately, fall on the vulnerable people who rely on them. These organisations operate on a tight service level agreement with the HSE. Pay parity for staff must be supported by a ring-fenced, fully funded package from Government that includes the full cost to their employers, which is important. Anything less will move this crisis from staff and organisations directly onto families, unfortunately. Organisations funded under section 39 already find it difficult to compete with HSE and section 38 pay scales. This will compound the existing recruitment and retention difficulties resulting in increased staffing shortages, greater reliance on agency staff and a higher risk to service delivery. Organisations may be unable to adequately support their existing staff or meet the needs of current service users and their families. We need to fix this issue properly, once and for all.

I reiterate that this is and has been recognised by all concerned, including the workers the Deputy referred to, as a landmark step by Government that ensures these workers will be automatically included for any general round increases in any future public sector pay agreements. That is very significant in the first instance. In the second instance, regarding the specific issues raised by the Deputy, an exercise is currently under way, which was agreed to at the time, to get a further, clearer and more transparent insight into the issues within the sector because there are a variety of different issues in the sector. That exercise is under way and nearing completion. It is a data-gathering exercise and the outcome of that exercise can and will inform targeted measures on the low pay issues that affect the long-term sustainability of services. The arrangements relating to the workers the Deputy referred to are arrangements through statutory grant aid arrangements. Funding for services in those circumstances is part of that data-gathering exercise. It is important to say as well that the organisations funded under section 39, while supported by the HSE, are independent entities. They are not public bodies and their staff are not public servants. The terms and conditions of employment for staff in these organisations are ultimately determined by the employer and their employees, notwithstanding the body of work that the State is doing and the commitments that we have given regarding the automatic linkage to public pay.