I got a lot of queries about the Fair Deal scheme and its implications for farmers. Some people didn’t realise changes had been made, while others contacted to say that you can now be on the waiting list for up to 15 weeks.
Under the Nursing Homes Support Scheme you make a contribution towards the cost of your care and the State will pay the balance. This applies whether the nursing home is public, private or voluntary. Nursing home care is expensive, typically ranging from €850/week to €1,350/week in private nursing homes. It is set to become a major issues for many farm families.
The IFA released an interesting guide on the scheme, with clarifications especially around when families don’t qualify to have their farm assets capped at three years due to the sudden illness policy.
The objectives of the scheme are to ensure that long-term nursing home care is affordable for all and to provide a uniform system of financial support for individuals in public and private nursing homes.
The scheme is operated by the HSE and co-funded by the individual and the HSE. The principles underpinning the individual’s co-payment are as follows:
The person’s co-payment (ie contribution) is calculated in accordance with the principle of ability to pay. The person’s contribution is based on 80% of assessable income and 7.5% of the value of assets, including the principal private residence. (This was increased from 5% of assets if the application was made prior to 25 July 2013). However, a number of further factors determine the actual level of co-payment:
1 The first €36,000 of any assets owned by the individual, or €72,000 for a couple, will be disregarded.
2 Thereafter, the 7.5% charge on assets per annum will be implemented as follows:
3 In the case of couples, each individual’s assessed income and assets will be considered as half of the couple’s combined income and assets. This means that the co-payment in cases where one of the couple enters long-term care will be based on 50% of the couple’s combined income. So 50% of 80% = 40% of combined income and 50% of the 7.5% = 3.75% charge on combined assets. This also means that the deferred charge on the principal private residence, where only one of the couple enters long-term care, will be capped at 50% of 22.5%, in other words 11.25%.
4 All assets transferred for five years or more are excluded from the assessment of means.
5 A person’s spouse/partner who remains in the home must not be left with an income less than the maximum weekly rate of the State non-contributory pension (€219).
6 No one will pay more than the cost of his or her care.
Taking the farm into account
The farm or farm business is taken into account in the financial assessment of assets, ie a charge of 7.5% per annum. However, in certain circumstances a three-year limit similar to the situation with a principal residence, where the charge is capped at 22.5% (ie payable for at 7.5% per year for the first three years in care only) can be applied:
1 Where the person has suffered a sudden illness or disability, which causes them to require long-term residential care. The term “sudden illness or disability” is not further defined, eg it is not limited to any specific list of illnesses. It will be a matter for the HSE at local level to carry out the assessment.
2 Where the person or their partner was actively engaged in the daily management of the farm or relevant business up until the time of the sudden illness or disability.
3 Where a family successor certifies that he or she will continue the management of the farm or relevant business. A family successor includes not only a son/daughter, but also a spouse, partner, stepchild and niece/nephew. The family successor is obliged to continue the management of the farm, ie a formal transfer of ownership is not required.
In the case of couples, the measure should apply where the applicant suffered a sudden and unforeseen illness, and either or both members of the couple have been engaged in the running of the family farm. This stipulation is in keeping with the principle of joint assessment of couples. The limit of the three years referred to above is retrospective in the case of a person already in an approved nursing home.
At a technical meeting between the IFA and the Department of Health, some options available to farm families under the new scheme in particular circumstances, in the event that they do not qualify under the three-year sudden illness limit, were clarified. See case studies below.
Case A
Farmer transferred farm to son four years ago and now needs nursing home care. However, on application he fails to qualify under sudden illness. He has the option of paying his own costs for a year and applying for the scheme when the five-year limit for transfer of assets has expired.
Case B
Farmer transferred farm to son two years ago and now needs nursing home care. He proposes that his son would agree to pay the deferred charge from his assets on the death of the father. The HSE will only make a contract with the person entering a nursing home.
He is not the legal owner and the HSE will not make a contract with another person, as they have no basis to collect the deferred charge. However, the applicant has the option to reapply when the five-year limit for transfer of assets has expired. CL
In brief
SHARING OPTIONS