Dáil Éireann Debate, Wednesday - 6 May 2026
731. Deputy Ken O'Flynn asked the Minister for Children, Disability and Equality the current funding model applied to Section 38 and Section 39 disability service providers delivering residential and supported living services; whether her Department has assessed the financial sustainability of these providers; and the estimated funding gap arising from inflation and pay parity pressures since 2008. [32694/26]
View answerThe Department of Children, Disability and Equality provides funding to the HSE to deliver specialist disability services either directly or via Section 38 and Section 39 organisations following the transfer of function from the Department of Health in 2023. Funding arrangements prior to this year were the responsibility of the Department of Health.
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.
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.
The Government acknowledges this essential role voluntary organisations have in delivering a range of disability services across the country.
As part of a HSE wide requirement to ensure appropriate governance arrangements that underpin the release of the funding of Agencies, a Governance Framework for Funded Agencies (Framework) has been developed which ensures a consistent approach in this regard.
The HSE must have in place appropriate contractual arrangements Service Arrangements (SA) and Grant Aid Agreements (GA) with all Agencies that have funding released to them for the provision of services.
With regards to pay parity, employees of organisations funded under Section 38 of the Health Act 2004 are regarded as public servants. These staff are included within overall public service employment numbers. As a result, employees of Section 38 funded organisations benefit from the terms and conditions set out in public service agreements negotiated between Government, trade unions and representative bodies of public servants.
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.
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 Q2 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 to request funding for the full cost of service provision, including cost increases experienced during the previous year. In advance of the budgetary process for Budget 2027, commencing in July, I look forward to hearing feedback from representatives at the upcoming Pre-Estimates Forum, in May 2026.
