New legislation will cap Fair Deal charges at 22.5% of assets value

Existing annual levy of 7.5% on assets such as farmland challenged farm or business viability

For persons availing of the Nursing Home Support Scheme (Fair Deal),  the maximum charge on their properties for nursing care services will be 22.5% of value, in legislation now making its way through the Oireachtas.

Owners of farms or businesses will be able to operate in the knowledge that the maximum charge on their properties for persons receiving nursing care services will be 22.5% of value, provided all of the future conditions of the Nursing Homes Support Scheme are met, said Minister of State at the Department of Health Mary Butler, as the legislation to amend the scheme was moved to Committee Stage in the Oireachtas.

She said the core aims of the legislation are to ensure fair treatment for farm and business-owning families, without impacting negatively on the future sustainability of the scheme, thereby preserving access to care for those who need it.

The legislation proposes to cap Nursing Home Support Scheme (Fair Deal) financial contributions based on farm and business assets at three years, where a family successor commits to working the productive asset.

It has had a trouble-free passage through the Oireachtas so far.

The Fair Deal Scheme is a system of financial support for those in need of long-term nursing-home care.

However, unintended consequences have affected farmers and small-business owners whose loved ones have been in nursing homes for periods longer than three years.

This left many family successors facing onerous burdens which could challenge their future farm or business viability, due to the annual levy of 7.5% on assets such as farmland for every year of long-term nursing care.

The existing terms and conditions of the scheme limited the 7.5%-per-annum levy for nursing home care to the first three years of care — for all but farmers and business owners. The new legislation will bring farm and business assets within the three-year limit. 

Minister of State Butler has the new legislation will not be “backdated”. Retrospective payments will not be possible, after the new legislation is enacted. Retrospective payments for contributions to the cost of care already paid by nursing home residents with farm or business assets “would create a challenging precedent, involving high legal and administrative costs and risks”.

“However, the absence of retrospective payments does not prevent a person who is already in the scheme from availing of the three-year cap.

“If, therefore, a person has spent five years in care, he or she can qualify for the relief from further contributions straight away, once he or she appoints a family successor and meets the other conditions of the relief.

“Similarly, if a person has spent two and a half years in care, he or she can avail of the cap after he or she has paid contributions for the final six months and has met all the other relevant conditions, including the appointment of the family successor.

“However, the family successor must still be committed to working the farm or business for six years from the date he or she is appointed.”

Applicants would be advised to appoint their family successor as soon as possible after they enter care services, so that the six-year period which the family successor must commit to can begin.

When applying to appoint a family successor, the applicant must declare, by way of statutory declaration, that the farm or business asset had been actively worked for at least three of the five years before he or she entered care services.

The family successor does not have to have worked the farm in that period, but it must have been actively worked for at least three of the five years by the person in care, or his or her partner.

The family successor does not need to provide proof of income, or having worked the farm, at this point.

The current legislation would allow a person in care to appoint multiple family successors to multiple different assets.

The HSE will review each appointed family successor to ensure compliance with the conditions of the scheme.

There will be an appeals process for all decisions made by the HSE.

Minister of State Butler said the scheme should not be extended to change the method of assessing income from productive assets that are subject to a lease agreement.

“The policy intent of this amendment is to protect family farms and businesses that will remain within the family as a source of employment and income into the future.

“This policy would not be advanced if income from leasing arrangements was included in the cap.”

The Minister said she is committed to working towards bringing forward an amendment in the Committee Stage on extending the three-year cap to the proceeds of the sale of a principal private residence.

This seeks to remove a disincentive to those who would otherwise choose to sell their home.

It is also targeted at bringing into use homes that would otherwise be vacant for many years.