3054. Deputy Catherine Callaghan asked the Minister for Children, Disability and Equality the measures that are being undertaken to ensure that Section 39 agencies do not need to reduce services and supports in order to meet their mandated and statutory pay obligations; and if she will make a statement on the matter. [59325/26]

The Government acknowledges the essential role of section 39 voluntary organisations who deliver residential services to many people across the country. The Department of Children, Disability and Equality is committed to working with the HSE and the broader disability sector to ensure that valued service providers receive the funding they need to continue to deliver quality services and supports to disabled people in Ireland.

In 2026, the Department is providing €3.9 billion for HSE specialist disability services, an increase of €628m, or almost 20% over 2025. This is the largest ever increase in funding for disability services. It follows significant year on year increases resulting in an overall increase of €1.85bn or 91%, since 2020.

While this Department sets the strategy, policy direction and the overall allocation for the disability sector, decisions on commissioning of services from individual service providers and funding allocations to individual service providers are an operational matter for the HSE as the funding authority, on behalf of the State.

The HSE works in partnership with organisations including Section 38, Section 39, Out of State and private organisations to ensure the best level of service possible is provided to people with a disability and their families, within the available resources. The majority of specialised disability provision (80%) is delivered through non-statutory sector service providers funded by the HSE using allocated budget funding.

Section 39 funded organisations form part of the broader community and voluntary sector. The WRC pay agreement reached in 2025 between Government Departments and unions includes funding for a phased 9.25% pay increase, which will benefit workers in section 39 funded voluntary organisations. Taken with the October 2023 Agreement of an 8% increase, this amounts to a 17.25% pay funding increase over a 3½ year period.

Agencies, organisations and charities providing specialist disability services that will be covered by the new auto-enrolment scheme are those funded under Section 39 of the Health Act 2004. These organisations receive a portion of their funding from the HSE to deliver agreed services. Funding is provided to organisations by the HSE through the grant process to support quality person-centred services.

It is, however, important to note that Section 39 providers, while supported by the HSE, are independent entities, and as such employment contracts and obligations (e.g. auto-enrolment, pay, pensions) are matters between the employer and their employees. As these staff are not public sector employees, responsibility for meeting obligations under the new auto-enrolment scheme rests with their respective employers.

The agreement also includes an automatic linkage to future public sector pay agreements for these workers, to match all future pay increases. In delivering on this 9.25% pay increase, the Government is improving the ability of service providers to actively recruit and retain staff and supporting the overall sustainability of the sector.

As part of the 2025 WRC pay agreement, a comprehensive data gathering exercise is underway, which is due to be concluded before end 2026. The completion of this exercise will provide a more robust evidence base to continue discussion on pay funding in the voluntary sector.

Each year the Estimates process allows the HSE, as the funding authority, to request funding for the full cost of service provision, including cost increases experienced during the previous year and to expand service provision through proposed new development measure funding, for consideration by the Department. Until the budgetary process is completed, it would not be appropriate to comment further on the overall budget allocation for specialist disability services for 2027. Section 39 providers should reach out to their local HSE office for next steps for submitting funding proposals in conjunction with estimates 2027. The Department also welcomes pre-budget submissions from service providers.

I trust this information is of use and thank you for raising this issue. I would like to thank all Section 39 providers and staff for the work they do in improving people’s lives.