Farm Ireland

Thursday 14 December 2017

Farmers transfer homes to heirs to beat Fair Deal claim on assets

Laura Lynott

Farmers are growing increasingly concerned about losing their homes to the Fair Deal scheme and are seeking legal advice to transfer their homes to their heirs at a much younger age.

Aisling Meehan, an agricultural solicitor from Newmarket-on-Fergus, Co Clare, said she receives calls from farmers in their 50s and older, looking for solutions to stop the State claiming assets if they need nursing home care in future.

Ms Meehan (35) said that she's advising farmers to transfer their homes into the next generation's names but she said this has to be done five years before they go into a nursing home.

Many are doing this in their 50s, when the adult heir is in their 30s.

The tax consultant, who specialises in agricultural law, said there's "less" she can do for older farmers in or about to go into a nursing home, as the State looks for assets in a person's name as far back as five years.

"Some people can be very distressed," Ms Meehan told the Irish Independent. "Especially if they hear from friends or relatives affected by this (the scheme).

"If a person is in their 60s or 70s and if they have the mental capacity and want to transfer their farm, you can act on that instruction, but if the person is in need of nursing home care already or within the next five years, there's less that can be done."

Ms Meehan said the Fair Deal system was "unfair" and she encouraged farmers to "protect" themselves by researching the matter well in advance of their most senior years.

Also Read

"It goes back to the fact that farmers are asset rich and cash poor," she said.

"The farm can potentially be sold to pay (for care) and to avoid that, a lot of farmers transfer their farms to the younger generation, so if they need care, their assets aren't taken into account, but they (the State) can look at assets from the previous five years so you need a clean five years.

"It's the only real alternative - farmers don't want to work all their lives, pay tax and lose their farms, which also often provide not only a home but an occupation to the next generation."

It costs around €2,000 to transfer a home and two solicitors are needed - one for the heir and the other for the property owner. Some farmers also ensure they avoid stamp duty by transferring their farms to the heir before they turn 35, Ms Meehan added.

Under the HSE Fair Deal scheme, a person makes a financial contribution towards their care and the State pays the balance.

A person's financial situation is assessed to see how much they have to contribute towards nursing home fees. Assets, including property and savings, are examined, when assessing the applicant's financial situation. It's also possible to apply for a Nursing Home Loan to defer making the contribution based on a home or other property.

Ms Meehan said: "With a farm, if it has to be sold, it might be difficult for the younger generation who may live there.

"The Fair Deal ought to be linked to PRSI contributions and a person pays for a nursing home over a period of years.

"No one expects this money to come from nowhere to care for the elderly, but there should be some fairness involved."

Meanwhile, Health Minister Simon Harris has said he plans "to provide more support" to farmers and small business owners by looking at issues surrounding their assets.

"I'm very much of the view that we need to take action in relation to farmers and small business owners but that has to be done in the context of a normal budgetary process," he said.

Irish Independent