Residents of public nursing homes who have assets will end up paying thousands of euro more for their care under the new "Fair Deal" scheme due to come into effect next year.
The scheme, announced by Health Minister Mary Harney, will allow the State to claim up to 15pc of the value of the estate of residents of public and private nursing homes after death.
Residents will not be obliged to fund the full weekly cost of care during their lifetime, but will have to pay 80pc of their weekly disposable income. The State would then recoup the cost up to a percentage of the patient's estate after their death.
Launching the proposed legislation, which is to go before the Oireachtas, the minister said "it is totally fair, sustainable and affordable". She instanced the predicament currently faced by many people faced with private nursing home bills of €50,000 a year forcing them to sell or re-mortgage their home.
She said the new scheme would relieve the financial burden from people during their nursing home stay and allow the State to recoup the costs of the "loan" instead after a person's death to a value of 5pc of the value of their estate per year, with the recuperation capped at three years.
It will not affect the 22,750 people currently in residential care -- but those in private nursing homes can switch to the new scheme if they feel it would relieve financial pressure.
She said the annual cost of the new scheme to the Exchequer in its first year will be €920m. Currently, the State is spending €790m subsidising this care.
However, the people paying substantially more for their care will be new residents of public HSE-run nursing homes who currently pay 80pc of their old-age pension, even though they could have substantial assets. The minister said: "People with the same incomes can end up with vastly different care costs."
When the legislation is in place next year, everyone will be asked to contribute to their care based on a financial assessment of their means.
Everybody's medical needs will also be assessed to determine if they need nursing home care and other social factors -- such as whether they live on their own in a rural area -- would be taken into account, she added.
Contributions based on the value of a person's home will not exceed 15pc of its value and it will be 7.5pc if one person in a couple needs care.
However, the minister also said the scheme will be capped on an annual basis rather than demand-led. A certain financial allocation will be made and cannot be exceeded regardless of the number of applicants.
There will also be a fee charged to a "bed blocker" -- someone fit for discharge from an acute hospital but reluctant to go until a nursing home place is provided.
Commenting on the scheme, Eamonn Timmins of Age Action Ireland asked what happens if a person is deemed in need of nursing care but refuses to sign up to the scheme's terms. "In effect, it means that people who had been paralysed by stroke or who are suffering from dementia will be charged in a completely different way to people who, for example, have a heart attack or are being treated for cancer in an acute hospital."
He also stressed the need to increase investment in community nursing supports to extend people's time in their homes.
The minister said the new scheme is voluntary and people can continue to pay their weekly costs upfront -- with no State clawback from their assets -- if they wish.
If a spouse dies after being in a nursing home, the other partner can remain in the home and the cost will be recouped after that person's death.
The legislation also allows for certain safeguards for a sibling or dependent child of a nursing home resident who may have shared the home with the deceased nursing home resident.