How Fair Deal works: The new plan that delivers a truly fairer deal for farm families
Last week's proposals finally allay fears that farms would have to be sold off to meet Fair Deal nursing care costs
Last week Ministers signed off on proposals to overhaul the Fair Deal scheme, which will cap the payments to be made by farm families when a person enters the care of a nursing home.
The State spends almost €1bn a year providing nursing home care to older people through the Fair Deal scheme.
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This figure is expected to rise substantially in the coming years due to the country's ageing population.
Under Fair Deal, a person pays 80pc of their total income, such as a pension, to help fund their care.
On top of this, they commit 7.5pc of the value of their assets as a yearly contribution, capped at 22.5pc after three years.
The current system sees farm families and small business owners required to set aside 7.5pc of the value of their land annually to fund a place in a nursing home.
Now, under a plan devised by Minister of State Jim Daly, this will be capped at three years.
In order to qualify for the new terms, the person entering a nursing home must appoint a successor who will sign a legally binding commitment to continue the family business.
As part of a commitment to the 'clawback' mechanism, the successor must consent to a charge being applied on land or property if they break the terms of the contract.
This also means that in order to qualify for the cap, young farmers will be tied to the land for at least six years.
This will prevent families who want to get the State subsidy from renting land to third parties.
What is Fair Deal?
Under Fair Deal, a person pays 80pc of their total income, such as a pension, to help fund their nursing home care. On top of this, they commit 7.5pc of the value of their assets as a yearly contribution, capped at 22.5pc after three years.
What about farmers?
Up to now, a farm can be used to help offset the costs of nursing care but the three-year cap did not apply.
For example, if a person spends 10 years in a nursing home, the State is entitled to recoup 75pc of the farm's value.
Now, in order to qualify for a 'fairer deal', the farmer/business owner, their partner or a nominated family successor must have worked the farm or business for three out of the previous five years.
Before the person enters nursing home care, their successor must also provide a statutory declaration that they will work the farm or business for at least the next six years.
Failure to do so would mean the land or business is deemed an "investment asset" rather than a "productive asset".
Conditions include a legal undertaking he or she will repay the full amount of the State subsidy if they fail to complete the six-year period.
Some flexibility will be applied in cases where the nominated successor finds themselves unable to continue working due to illness or death. In such incidences, the family will be able to select a new successor without being hit by additional charges.
What happens next?
The Department of Health will now engage in pre-legislative scrutiny and will engage with the Attorney General in preparing the legislation for publication.
Although the heads of bill have been agreed today, it will be the end of year at the earliest before the necessary legislation to implement the changes is ready.
The Department of Health will now engage in Pre-Legislative Scrutiny and will engage with the Office of the Attorney General in preparing the legislation for publication.
The benefits will be applied retrospectively to anybody already in care or who enters a nursing home in the coming months.
If a resident has been living in a nursing home for one year, their family will have to pay only the 7.5pc for another two years. Or if a resident is in a nursing home for more than three years, those 7.5pc payments will cease immediately.
They will not be able to recoup contributions they have made beyond the three-year cap period.
The Government has also noted that, as the law currently stands and will continue to stand, farm and business assets (along with all other assets) are not considered under the financial assessment in the Scheme if they have been transferred to others, including the next generation, over five years before nursing home care is required, making this the most financially prudent approach.
How to apply
There are four steps to the Fair Deal application process. Complete and sign the application form that can be found on www.hse.ie.
By doing this you are applying for a care needs assessment and financial support.
If a person is unable to apply themselves, a specified person may apply on their behalf. A specified person can be a care representative (a person appointed by Circuit Court); Ward of Court (a person appointed by Office of Ward of Courts); holder of a registered enduring power of attorney (chosen to act on behalf of another person); spouse or partner; relative over 18 years of age; legal representative or registered medical professional, nurse or social worker.
The HSE will contact you to arrange a care needs assessment. This will assess your need for nursing home care. It also looks at whether you can be supported to continue living at home.
A public health nurse or medical professional will assess your: ability to perform daily tasks such as dressing and washing; level of independence; cognitive functioning - levels of attention, memory, learning, and language. You will receive a decision in writing after the assessment.
A financial assessment is then carried out to determine how much you pay towards the cost of the nursing home care. The amount depends on your income and assets.
Finally, you can choose to apply for an optional nursing home loan, if you own property.
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