Even though she owned the farm “for only a couple of minutes”, the HSE sought €736 a week towards Martina Noonan’s (77) care costs under the five-year transfer rule of the Fair Deal scheme.

The nursing home bill has now gone over €40,000 and the nursing home is threatening action.

What will the family do now? Will th e56-acre farm have to be sold to pay the fees?

The story stems back to 2002. Michael Noonan, husband of Martina and father of Stephen and Anne, approached his solicitor advising that he wanted to transfer the family farm to his son, Stephen, and give a site to his daughter, Anne.

The transfer documentation was prepared and Michael was contacted and asked to call to the solicitor’s office to complete the signing. Nothing happened in spite of reminders being sent to Mr Noonan.

Michael became ill in 2004/2005 and subsequently died in 2006 without completing the documentation.“It was always Stephen’s understanding that his father had come home one day and said: ‘That’s all done,’” says solicitor Peter Loftus of Bourke, Carrigg and Loftus in Ballina, Mayo.

“Obviously, there was confusion on his father’s part as to what he had actually done, when, in fact, he had actually only given us the instructions.”

Following the death of Michael, the family consulted their solicitors only to discover that the farm was still in his name. They sought advice on how to carry out his wishes. A tax-efficient scheme was put together whereby Stephen and Anne would disclaim their one-third share and everything would then go to their mother, Martina Noonan, and thereafter she would transfer the land to her children.

The process involved making an application for a Grant of Administration to Michael’s estate and preparing the necessary documents to give effect to Michael’s original wishes. This involved Martina signing the papers to register the land in her own name and “within minutes” signing the transfer of her interest in the land to her son and daughter.

“That meant that the inheritances were now coming from a parent and inheritance tax wouldn’t have to be paid. This process was completed by September 2009.”

WHAT HAPPENED NEXT?

Martina Noonan then became ill around Christmas 2009 and was transferred from hospital to Ard na Greine nursing home in Enniscrone.

An application was submitted under the Fair Deal scheme for nursing care and the financial assessment was done.

“The HSE assessed Martina Noonan as having an income of €736, based on the fact there had been a transfer of property to her – even though she had owned the farm for only a couple of minutes.

“They based their assessment on the valuation of the farm. The 56 acres has a market value of approximately €610,000, but it doesn’t generate that kind of income. Stephen’s accounts show that he makes only €176 per week – and that includes income from another 80 acres of marginal land that he owns,” Peter Loftus states.

The Noonans’ solicitors then appealed the decision through the HSE internal appeals process. The HSE stood by their decision. The Ombudsman was contacted next.

“Her view was that it was unreasonable of the HSE to come to that finding and so the case was sent back to the HSE for review.

“When the same decision came back we were instructed to issue judicial review proceedings of the HSE’s decision.”

“The case being made was that the HSE decision was incorrect because the transaction was being treated as a trust, in that the asset (the farm) was actually held by Martina in trust for the two children and that she never really had possession or ownership of it.

“There is also a live issue regarding whether the HSE has changed its mind regarding the applicability of the three-year cap applied to her case and, therefore, she should have been reassessed at a much lower rate in March of this year. However, the HSE now wants to review its own decision in that regard.”

It’s a complicated issue, according to the family’s solicitor.

“It does not seem credible that the purpose of the act is to dissipate one person’s farm or livelihood in order to pay for the nursing home care of another person,” he says.

“We would like the HSE to use their discretion. If Martina doesn’t qualify under the three-year cap rule, technically she may be liable to contribute €736 per week for the rest of her life. This could have implication for the farm as it would have to be sold.”

The case was heard in the High Court over two days in June last.

The argument made by the defendant (the HSE) was that this was not a trust. Case law in relation to what is and what isn’t a trust was referred to. The judge ruled in favour of the HSE, that property had not been held in trust by Martina on behalf of the children. While making the decision against the Noonans, Judge Hedigan did not award costs against them, as he considered it to be a unique case.

The decision of the High Court is now being appealed, but it could be one to two years before it is heard in the Supreme Court.

“We will argue that the judge erred in law in several respects, one of which was in treating the lands as a transferred asset under the act,” says Peter Loftus.

CURRENT SITUATION

The nursing home has requested, through the Noonans’ solicitor, that a substantial payment be made immediately, but it is not clear what they mean by “taking action”.

Does getting such letters frighten Stephen Noonan, Martina’s son?

“It’s not frightening at this stage,” Stephen says. “It’s not the first time we’ve got a letter like that.”

Stephen has always visited his mother regularly and has a good relationship with the people in the nursing home who are looking after her, he says.

The nursing home has been told that if they attempt to remove Mrs Noonan, her family will have to consider all options open to them, which may include seeking an injunction from the court, i.e. the family’s solicitor would be instructed to apply to the court for an order to prevent them doing that.

“We would say that they are being totally unreasonable,” says Peter Loftus, “and that there is a case here that may end up in them getting all their money and, until that case has been dealt with, it’s not appropriate that Martina Noonan would be thrown out of the nursing home when she obviously needs care. We are awaiting the HSE reassessment under the three-year cap rule.”

Solicitor Peter Loftus also points out that he does not accept that Stephen Noonan has any liability for the nursing home debt, as it is his mother, Martina, who is the patient, and she just has her pension.

The nursing home was initially paid some money from private family funds, he states.

NURSING HOME STATEMENT

Statement from Seamus Crawley, Ard na Greine nursing home, Enniscrone (the Sonas group – www.sonas.ie).

“Sonas are recognised as the leading professionals when it comes to nursing homes and elderly care homes in Ireland, and are supporters of the Fair Deal scheme and what it is trying to achieve.

“It is unfortunate that, due to the technical nature of the recent Noonan case, Mrs Noonan was refused assistance under the Fair Deal scheme.

Sonas are endeavouring to work with the Noonan family, in particular Stephen Noonan, in relation to payment for the care of Martina Noonan following the decision of the High Court.”

ADVICE

Does Peter Loftus have any advice for readers based on this case?

“It’s very difficult to advise elderly people today in relation to the transfer of a family farm or business asset, given the uncertainty of their future medical care, particularly when there is the possibility of nursing home care being required within five years. You cannot plan ahead with absolute certainty – how can you? No one has a crystal ball. Under the Fair Deal legislation there are now a different set of rules that apply when calculating the contribution that an individual may be obliged to make in the situation where they get sick and then transfer the family farm, as well as the period that the asset is taken into account.

“In addition, there are many of the traditional issues that must be considered when asked about the transfer of farms and assets for clients. Many farmers at the moment do not have children who are going to take up the farm, so they are holding on to their farms for longer.

“Where there is a son or daughter who is interested in taking over the farm or business, we are often asked what happens if he/she gets married and they divorce? Parents don’t like to see the farm being jeopardised because of a bad relationship.”