When an elderly person is no longer able to live at home, nursing home care typically costs an average of €1,000 per week, but different nursing homes can charge from approximately €800 to €2,000, and more.

In addition, a recent report by Age Action revealed that additional charges not covered by State schemes can add between €15 and €100 to the weekly bill.

The most important aspect to consider when planning ahead for your retirement is that under the current Fair Deal Scheme rules, any assets you own in the five years prior to entering a nursing home will be included in the means-testing equation.

Many farmers who retire transfer most of their farm to the next generation, but retain some property such as a small number of fields for their own financial safety.

Value of the property

You must be aware that the value of this property will be included in the calculation of your nursing home charges, as explained below.

Waiting until your health forces you to leave your home to transfer the rest of the land at the last minute won’t do, because of the five-year rule.

Upon entering a nursing home, an applicant to the Fair Deal Scheme will pay the sum of the following:

  • 80% of their regular income including state and private pensions, leasing income, etc.
  • 7.5% of the value of their home each year, for three years only.
  • 7.5% of the value of their other assets each year, without a time limit. This includes farm assets such as land, financial assets such as co-op shares – in one word, everything you own.
  • The first €36,000 of a person’s assets (or €72,000 for a couple) is exempt from the charges.

    If a person needs full-time care because of a sudden illness – and the criteria here are very strict – the charges on all assets end after three years.

    Deferring payment

    One option is to defer the payment of these charges until after the person’s death, effectively borrowing the nursing home costs applicable in their case against their estate.

    Solicitors met by the Irish Farmers Journal recently pointed out that elderly landowners had entered this loan option without receiving legal advice.

    They said that this would not be allowed when signing a mortgage, which involves a similar charge on property.

    They encouraged farmers to explore options with their solicitor including early land transfers and leasing back within the family well in advance of needing nursing home care.

    An IFA-led campaign to reduce Fair Deal charges to the productive assets of small business owners, including farmers, has been gaining political traction and the Government is expected to announce changes in the next Budget. Until this happens, be aware of the rules above when making plans.