Farming finance: Prudent planning needed to beat the Fair Deal 'Catch 22' of farm families
New legislation could lessen the burden of nursing home costs on farm families, but the Fair Deal scheme still poses complex issues
The Government has approved a proposal to change the treatment of farms and businesses under the Nursing Home Support Scheme, also known as the Fair Deal Scheme. A review of the scheme carried out in 2015 undertook to examine how farm land and business aasets are assessed under the mean test.
Following that, the Programme for Government committed to remove discrimination against small business and family farms under the scheme.
In essence it is proposed to extend the three-year cap which applies to principal private dwellings to farms and businesses where a family successor continues to operate the farm or business for a period of six years.
While the government has approved the proposal, it requires a change in legislation and is not likely to come into force until the autumn at the earliest.
Nevertheless, it represents a measure of welcome relief for many farm families who find themselves facing the prospect of nursing home care cost that could threaten the future viability of their farms.
The change will not provide for free nursing home care for affected farmers, far from it. Nevertheless, it may limit the burden on the farm in many cases to the equivalent of three years care cost. The following case study sets out a typical scenario.
In the example Joe's and his wife's combined annual assessed means is €104,101. Joe is personally assessed on 50pc of this figure for the first three years. The net result means that Joe or his family will have to contribute €52,050 towards his care for each of those three years.
However, as his dwelling and land are not counted from year four onwards his assessed means share reduces to €11,175 resulting in the cost of care reducing to €11,175.