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My mother kept one third of our family farm in her name when it was transferred to me and I have been farming it ever since. She now needs nursing home care and I fear losing it under the Fair Deal Scheme. Can you explain how the scheme works? Is the other two-thirds of the farm already transferred to me at risk? How is land valued and what if I feel the valuation is too high? Can you revise the valuation after entering the scheme? If so how often is this allowed?
The average cost of care in a private nursing home is approximately €1,000/week. The weekly cost of care for individual public, private and voluntary nursing homes is published on the HSE website. Unless a farmer can afford to pay for this himself/herself, they will need to look for State support under the Fair Deal Scheme.
The Nursing Home Support Scheme Act 2009 introduced the Fair Deal Scheme which provides financial support for a person who requires long-term residential care. There are two steps involved in an application to the Fair Deal Scheme:
1. A care needs assessment which determines whether or not a person needs care services.
2. A financial assessment determines the level of financial support and the farmer’s contribution to the cost of care.
Care needs assessment
The act provides that there must be an evaluation of a person’s ability to carry out the activities of daily living which would include an assessment of ability to bathe unaided, to feed unaided to dress unaided, ability to communicate, cognitive ability, mobility, etc.
Financial assessment
There are two types of financial support provided for in the 2009 act:
1. State support, which means a payment made by the HSE to assist a farmer in meeting the cost of the nursing home.
2. Ancillary State support (nursing home loan) which means the HSE gives a loan to the farmer to make up the balance of the cost of care.
Nursing home loan
The financial assessment will work out the farmer’s contribution to the cost of care. The HSE will then make up the balance, ie the State support.
The farmer will contribute 80% of their assessable income and 7.5% of the value of any assets per annum. Assets include any assets transferred in the five years before the first application for the Fair Deal Scheme.
The first €36,000 of the farmer’s assets or €72,000 in the case of a couple will not count in the financial assessment.
Where the farmer’s assets include land and property so that they do not have the cash equivalent to pay their portion of the cost of the nursing home, the 7.5% contribution based on the assets may be deferred and collected from the farmer’s estate at a later date. This is known as the nursing home loan. This will be collected on the death of the farmer and will be a debt owing from the farmer’s estate.
If there is not enough cash under a will to pay this debt, it may be necessary to sell some of the land to pay back the debt owed to the HSE.
The Revenue Commissioners are responsible for the collection of the monies advanced under the nursing home loan and the monies must be repaid within one year of the death of the farmer.
However, if the farmer’s spouse is still living in the house and does not own any other house, a deferral of the repayment of the nursing home loan may be applied for. The deferral must be applied for within three months of the death of the farmer. If a spouse is successful with the application for a deferral, then the nursing home loan will become payable when the farmer’s spouse dies.
Three-year cap on value of assets
The farmer’s principal private residence will only be included in the financial assessment for the first three years. This means that the farmer will pay a 7.5% contribution each year based on their principal residence for a maximum of three years. This is known as the three-year cap.
It is important to note that at present there is no three-year cap on farms or business assets except in the case where the farmer/business owner becomes ill or disabled suddenly and there is a family successor identified.
The successor must be a relative of the farmer and regularly and consistently apply a portion of their working day in the farm.
Thus if a farmer is no longer farming the land they own when they apply for the nursing home scheme, the three-year cap does not apply.
Equally, if a farmer’s health deteriorated over a period of time, the cap does not apply. For the three-year cap to apply there must be a sudden illness preventing them from continuing farming, such as a stroke, heart attack, etc.
Next week
In next week’s column, I will cover your remaining queries, ie whether the other two-thirds of the farm already transferred to you is at risk? How the land is valued and what if you feel the valuation is too high? Can you revise the valuation after entering the scheme? If so how often is this allowed?
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