Advice: Nursing-home care costs need to be factored into farm succession plans
Q One of my parents is in need of full-time care. Although we have been managing home care up to this point, it is putting too much pressure on family members and the need for nursing-home care is becoming urgent. My other parent is quite well and plans to continue to live in the family home. I am a farmer and find my workload too much to balance with caring for a relative. The farm was transferred to me three years ago as I am a trained farmer. I have farmed it alone for more than 10 years due to my father's failing health.
How does the nursing-home scheme work and will it affect my ability to farm if either of my parents move into a nursing home? Also, what will happen to my parent's home if they must contribute towards their care?
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A Many families face the unenviable position whereby they cannot, for a variety of reasons, provide the level of care that a family member needs, within the home. There are several funding mechanisms available to families prior to the need for residential/nursing-home care, including Carer's Allowance, Carer's benefit and home support.
In-home care supports
Carer's Allowance is a payment to people on low incomes who are looking after a person who needs support because of age, disability or illness (including mental illness). The eligibility criteria for Carer's Allowance include that you must be living with, or in a position to provide, full-time care and attention to a person in need of care who does not normally live in an institution.
You must not be engaged in employment, self-employment, training or education courses outside the home for more than 15 hours a week. Carer's Allowance is means tested. The weekly payment varies depending on age and the number of persons cared for. For example, a person under the age of 66, caring for one person, receives €219 per week.
Carer's Benefit is a payment made to insured people (PRSI contributions made), who leave the workforce to care for a person(s) in need of full-time care and attention. Carer's Benefit can be claimed for a total of 104 weeks for each person being cared for.
The eligibility criteria include that you must be living with. or in a position to provide. full-time care and attention to a person in need of care who is not living in an institution. You must have at least 156 contributions paid at any time between your entry into insurance and the time you make your claim for Carer's Benefit. Carer's Benefit is a taxable source of income. The maximum rate of payment for a carer aged under 66 years, caring for one person, is €220 per week.
In addition, the HSE Home Support Service (formerly called the Home Help Service) provides support to people to stay in their own homes as long as possible. The Home Support Service provides support or everyday tasks, including getting in and out of bed, dressing and personal care like showering. The level of support depends on individual need and is not means tested. It can be provided by a HSE employee directly or through an external provider approved by the HSE. The Home Support Service is free.
Long-term nursing home care
When the need for care requires a nursing home, the Nursing Homes Support Scheme, also known as the Fair Deal Scheme, provides financial support.
Under this scheme, the person in need of long-term nursing home care, makes a contribution towards the cost of the care and the State pays the balance. The scheme covers approved private nursing homes, voluntary and public nursing homes.
When you apply for the scheme, your care needs are assessed to confirm that long-term nursing home care is required. Your financial situation is assessed to see how much you will have to contribute towards your nursing-home fees. If your contribution is less than the amount of the fees, the HSE will pay the rest. For example, if the cost of your care was €1,000 and your weekly contribution was €300, the HSE will pay the weekly balance of €700. Persons in receipt of financial support under the scheme will not be required to pay more than the cost of care in respect of his or her long-term residential care services.
Assets, such as savings and property (including the family farm and home), are taken into account when assessing your financial situation. The Financial Assessment which determines what your contribution will be looks at all your income and assets. In the case of a member of a couple, the assessment will be based on half of the couple's combined income and assets.
You will be expected to contribute 80pc of your income (less some allowable deductions) and 7.5pc of the value of any assets per annum. The first €36,000 of your assets, or €72,000 for a couple, will not be counted at all in the Financial Assessment.
Your principal residence (family home) will only be included in the financial assessment for the first three years of your time in care. This is known as the 22.5pc or 'three-year cap'. In the case of a couple, the contribution based on the principal residence will be capped at 11.25pc, where one partner remains in the home while the other enters long-term nursing home care.
If an applicant opts for the Nursing Home Loan in respect of the principal residence, the spouse or partner can also apply to have the repayment of the loan deferred for their lifetime. After three years, even if you are still getting long-term nursing home care, you will not pay any further contribution based on the principal residence.
In the case of the farm, prior to 2018, farm families and small business owners were required to set aside 7.5pc of the value of their business/land annually to fund a place in a nursing home. Now, if you own a farm, the 'three-year cap' that applies to the family home also applies to the farm, provided you fulfil the following requirements, (i) you have suffered a sudden illness or disability which causes the need for long-term care, (ii) you or your partner ran the farm up until the time of the sudden illness or disability and (iii) a family successor certifies that he/she will continue the management of the farm.
There is a 'claw back' mechanism, which means that farm assets sold or transferred within five years of a person entering a nursing home will be subject to the annual 7.5pc charge with the three-year cap applying. For example, if the farm was transferred seven years prior to the former farm owner requiring nursing-home care, then there is no 'claw back' from the new owner.
The Nursing Home Support Scheme has been the subject of scrutiny and criticism from the farming community as it can place a financial burden on the farm successor, who finds that they must pay a portion of the value of the farm asset towards the care of a relative, even after the farm asset has been transferred to them. This can make the sale of part of the farm necessary to discharge this liability.
The focus on the nursing-home care and the way farms are treated under this scheme places an increased emphasis on the need for succession planning well in advance of the need for nursing-home care by the farm owner.
Theresa A Murphy, Barrister at Law, based in Ardrahan, Co Galway
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