Changes to law to help bachelor farmers with care home costs

Farmers in nursing homes for up to six years could end up paying 45% of the value of their stock, lands or business.

Legislation now going through the Oireachtas will help farmers who require nursing home care but who do not have Fair Deal scheme "family successors".

The new legislation is designed to adjust the Fair Deal scheme (also known as the nursing home support scheme), which is run by the Health Service Executive (HSE).

Currently, 22,500 residents in long-term residential care are being supported by the scheme, at a cost to the State of €1.5bn.

People needing care in a nursing home can apply to the scheme to help pay for their care. The applicant pays part of the nursing fees and the scheme pays the balance.

For a single person availing of the scheme, the contribution is 80% of their income, in addition to 7.5% of the value of that person's home and his or her assets, which can include cash, a business, or farmland. For a married person availing of the Fair Deal scheme, it is 40% of the person's income, in addition to 3.75% of the value of assets. However, the first €36,000 of assets, or €72,000 for a couple, is not counted in the financial assessment.

When the scheme was introduced in 2009, the 7.5% or 3.75% annually of the value of a person's principal private residence was taken for three years only. Unfortunately, there was no three-year cap on the nursing home payments taken out of the value of a family business or a farm. 

This became a major financial burden on working farms and family businesses where a family member needed long-term nursing home care. In some cases, parts of farms were sold to pay the nursing home bill.

For example, farmers in nursing homes for up to six years could end up paying 45% of the value of their stock, lands or business.

In 2021, there was an amendment to the Fair Deal legislation designed to safeguard and protect the viability of family farms and businesses and to ensure more family farms and businesses would be handed down to the next generation. It was agreed to extend the three-year cap to family farms and businesses, if a "family successor" was appointed by the person entering nursing care, and continued to run the farm or business for at least six years.

Another condition is that the farm or business must have been actively run by the person entering nursing care or their spouse or partner or proposed family successor for at least three of the last five years prior to entering long-term care.

However, the "family successor" must be aged 18 or older and be either the Fair Deal applicant's spouse or partner, or the spouse or partner’s child, grandchild, brother or step-brother, sister or step-sister, uncle, aunt, nephew or niece, son-in-law or daughter-in-law, or parent or step-parent.

Again, there were unintended consequences.

Because only specific people could be appointed as successors, bachelor farmers who did not have wives or partners, nieces or nephews, brothers-in-law or sisters-in-law were often excluded from availing of the three-year cap.

That is why yet another amendment is now being brought through the Oireachtas by Minister of State at the Department of Health, Mary Butler. She said it will allow, for example, a bachelor farmer to appoint a first cousin once removed, second removed, or thrice removed, to be their family successor.

It will address, for example, the case of an elderly bachelor farmer who never married, is now in their 80s, and did not have any family member to appoint as a qualifying successor in order to qualify for the three-year cap on nursing home payments from their assets.

This amendment to broaden the scope of who can qualify as a successor was first tabled by Tipperary Fianna Fail TD Jackie Cahill.

Last week, this and other amendments to the Health (Miscellaneous Provisions) (No. 2) Bill 2024, completed the Report and Final Stages in the Dáil, and the Bill was sent to Seanad Éireann for the next legislative stage.

In last week's Dáil debate, Deputy Butler emphasised that the role of a family successor in the nursing home support scheme is completely different from that associated with inheritance.

Independent Roscommon-Galway TD Denis Naughten was critical of the HSE's "very rigid" interpretation of the Fair Deal law description of a "family successor". He said he was dealing with the case of a person’s nearest living blood relative who had taken over the operation of a farm and was rearing a young family on it, but has had to pay a substantial fee for long-term nursing home care for over six years.

Deputy Naughten also warned that the family successor's requirement to farm the land for six years could result in the Fair Deal clock starting again if the successor is no longer able to farm, for example, due to illness.