508. Deputy Michael Cahill asked the Minister for Children, Disability and Equality the consideration that has been given to the impact of pay differentials between Section 38 and Section 39 disability service employees and equivalent HSE staff on the recruitment and retention of nursing and care staff; the measures are being taken to address any such recruitment barriers; and if she will make a statement on the matter. [67155/26]

The March 2025 pay funding agreement for workers in community and voluntary health and social care organisations 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, and 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 €70m per annum for the organisations delivering specialist disability services and supports funded by the HSE.

Taken together with the earlier October 2023 agreement, which provided for an 8% increase, this amounts to a 17.25% increase in available pay funding over a 3½-year period. The final increase provided for in the agreement, a 2% general round increase, is due to be applied from 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 within each service agreement.

In a landmark step by this Government, the arrangements also include an automatic linkage for these workers to the general round increases in any future public sector pay agreements. This linkage is an important step forward for workers.

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.

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 can inform targeted measures on the low pay issues that affect the long-term sustainability of services. It is expected that this work will be finalised in the coming weeks.

These arrangements relate to services funded through statutory grant-aid arrangements. Funding for services commissioned through tendering arrangements is not covered by these negotiated agreements as these are separately contracted with relevant providers. Such contracts are awarded through competitive processes and therefore cannot be covered by the collective pay funding agreement. As noted in the 2025 agreement, related considerations can be dealt with through the existing procurement processes.

It is important to recognise that organisations funded under section 39 of the Heath Act 2004, 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 between the employer and their employees.