Farmers are being encouraged to be prudent in their financial planning to avoid the stress and debt many are exposed to when applying for the Nursing Home Support Scheme, (Fair Deal) scheme.

A lack of detailed knowledge about the scheme among legal, tax and finance professionals has led to a demand for advice to navigate a system that has been described as onerous and complicated.

With many farmers tending to be asset rich and cash poor, the current scheme can penalise landowners who have not transferred their farms to approved successors within a strict time frame. This is due to the fact that land is in included in the means test, which takes into account all assets held by the person in need of care.

Tom Murray is a health care consultant who offers independent advice on the Fair Deal scheme. Based in Clonakilty, Tom has delivered information talks to IFA branches around the country and also lectures with LIA, the education and training body for independent financial advisors in Ireland.

He tells Irish Country Living that the Fair Deal scheme is often overlooked in financial planning.

Fair Deal advice

“One of the biggest problems around Fair Deal is that it is quite a small area of financial planning so the professionals involved in advising farmers on succession – the solicitors, the accountants, the tax advisors, don’t always have the information to advise clients accordingly,” he explains.

“The other problem is people don’t consider Fair Deal until they are in crisis, whereas their options would be a lot greater if they factored it into their overall financial planning at an early stage.”

Fair Deal has faced criticism from many farming families who have received substantial Revenue bills regarding the repayment of loans taken out to cover the care of their loved ones, through the Nursing Home Loan (Ancillary State Support).

Tom explains that where land hasn’t been transferred to a successor within the time limits posed by the scheme, the loan is often the only way families can fund nursing home care.

“Fair Deal is not easy unless your circumstances are simple. As soon as you introduce wealth and assets, it becomes complicated,” he says.

“I regularly give talks to IFA branches and when I bring up the subject of succession and the transfer of assets, I’m met with a crowd of farmers who have their arms folded and are not very receptive.

“This means that if they end up needing nursing home care, and haven’t transferred the land to an approved successor, the total viability of the farm could potentially be at risk. They may not qualify for Fair Deal if their land is in their name, as it is taken into account under the means test and can push them over the threshold.

“The cost of their care then falls to their children who end up having to take out loans to pay nursing home bills which can be as much as €1,500 a week.

“But if farmers stop being stubborn about the very concept of land transfer and get proper advice, they can protect themselves and their land and still ensure they will be cared for if the need arises.”

Legal safeguards

Tom says those who are serious about future proofing their financial security need to act before they reach 70 years of age.

“There is a higher risk of needing care the older you get and the hope is that you continue with your health for at least the three years after you’ve transferred your farm, after which the land won’t be counted when you’re being assessed for Fair Deal,” he adds.

“By making a plan in advance, you can put legal safeguards in place to ensure that the finances will be there should they be required to pay for your care. I regularly get calls from solicitors asking for advice on the implications of land transfer for Fair Deal and it very much depends on the person’s individual circumstances.

“But the nursing home loan is only available where the person requiring care owns the land, and this has to be repaid after that person passes away. These are the bills that are causing so much stress and upset to families whereas if the proper advice and planning is put in place, people can protect themselves and their assets and avoid a lot of stress.

“If the land has been transferred and a legal clause has been inserted into the agreement that the successor lodges a certain amount of money to a designated account to cover future care needs, then there is no loan and no debt and no need to sell land to pay off nursing home bills.”

The IFA is continuing to lobby the Government for changes to the Fair Deal scheme. Teresa Roche, national chair of the IFA Farm Family and Social Affairs Committee says Fair Deal is her top priority for the year ahead.

“We are actively working to secure a meeting with Minister of State Kieran O’Donnell who has responsibility for Fair Deal to raise the very real concerns farmers have around the criteria for successors,” she says,.

“We are hopeful this meeting will happen in the coming weeks and that the support we have from the Minister for Agriculture Martin Heydon, and Tánaiste Simon Harris on this issue, can deliver the changes farmers need.”

Tom agrees that the current model could be tweaked.

“The very fact that the application form is the bones of 40 pages is enough to deter most people, as is the expectation that everyone has an email address or access to a computer,” he remarks.

“The other problem we have is the ‘Irish expert’ who will offer unsolicited advice from the high stool or Mart ring, regardless of the fact they know nothing about Fair Deal. All they do is put fear into people who would be better off getting proper advice on how to navigate the process.

“In saying that, Fair Deal does work pretty well for the majority of those under the scheme and of all those currently in nursing homes throughout the country, 97% are receiving support through the scheme.

“But the systems surrounding successors are overly complicated and onerous and could be refined.”

One of the areas Tom feels could be changed is an exemption on leased land, which currently is taken into account as part of the overall assets in the means test. He also thinks the terms and conditions placed on the successor could be relaxed.

“The six-year condition for a successor to actively farm the land after transfer could be adjusted as this is a long time and circumstances change. It’s one of many conditions that are overly complicated and there is no need for it to be.

“The other huge misconception out there regarding Fair Deal is that people who are in receipt of a medical card, which everyone over 70 is entitled to, will be admitted to a public nursing home free of charge.

“This is not the case and more needs to be done to get this message out because many older people are convinced this is the situation and they have nothing to worry about.”

Tom also believes it is not just those who are getting on in years who should consider financial planning to include a Fair Deal plan. Farming is a hazardous occupation and he believes middle-aged farmers would benefit from having a plan in place sooner rather than later.

“So many people find themselves facing emergency nursing home care, due to sudden illness or accidents, and where they have not made any plans regarding succession or Fair Deal, it can quickly become a nightmare.

“The one basic piece of advice I would give every farmer, regardless of age, is that where you aren’t prepared to talk to your family about what you want to happen to the land after you’re gone, is to at least have a file with all the basic financial and legal documents to hand in the event something happens you. And tell someone where that file is.

“No one wants to add to a family’s grief by having them chasing institutions or services for information. If kept in the one place, with access shared to even one member of the family, it can make a huge difference.”

For further information on Fair Deal go to hse.ie/fairdeal. Tom Murray is a healthcare consultant who can be contacted at 086 601 5042, email; advice@fairdealadvice.ie.

To qualify for the scheme an applicant needs to undergo two assessments:

1. Care Needs Assessment: this assesses whether the applicant requires long-term care.

2. Financial Assessment: this determines the level of contribution from income and assets that the applicant will

have to make towards their cost of care.

To avail of the Fair Deal/Nursing Home Support Scheme the applicant or their representative needs to complete a detailed application form for the Fair Deal support and the Nursing Home Loan.

It is very important that these forms are completed correctly as failure to do so will cause delays in the processing of the application and may have serious financial consequences for the applicant and in the future for their estate.