Family feud threat to Fairer Deal for farms, businesses

Fears of legal challenges on nursing home fees are stalling reform

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Margaret Donnelly, Ciaran Moran and Kevin Doyle

Fears about the potential for family feuds have delayed changes to the Fair Deal Scheme, which had been promised as a massive boost to business owners and farmers.

The Government is preparing new legislation that will limit the financial burden of nursing home fees for parents who pass on the family business or farm to the next generation.

However, the plan has hit a snag after a number of unforeseen 'what if' scenarios were identified by officials.

A key concern is that an elderly farmer or business owner could move into a nursing home on the understanding that one child would take over the business - but ultimately it could be bequeathed to another child.

Officials are concerned that such a scenario could result in a dispute over who pays the nursing home bill, with the potential to end up in court.

Farmers and business owners were expecting changes to be brought before the end of this year around the Fair Deal Scheme to reduce the burden of nursing home fees.

This would work by putting a cap on the amount of money the Government could demand from assets such as these.

The Irish Independent previously revealed that Minister for Older People Jim Daly is to give farmland business assets the same status as the family home under the Fair Deal Scheme.

Under the current regime, farming families and small business owners are required to set aside 7.5pc of the value of their property annually in order to fund a place in a nursing home.

The overhaul will see this bill capped at three years.

However, despite the plans for reform being mooted repeatedly over recent months, a number of previously unknown concerns have now emerged to delay the proposal.

Mr Daly, who is leading the reform of the Fair Deal Scheme, confirmed that "a number of legal issues and anomalies have arisen and a number of 'what if' scenarios have been brought to our attention.

"We have to get the legislation right as we do not want it challenged in the courts," he said.

The minister said that he hopes the Government will approve the draft heads by the end of the year.

But the Irish Independent understands that questions remain over the interpretation of any changes. "We do not want the legislation to be inequitable; we want it to be as fair as it can be.

"We are working on those challenges behind the scenes, but I am hopeful the draft heads will be approved by the Government by the end of the year," the minister told the Seanad.

He said as soon as the draft heads are approved and published, the Dáil can proceed to legislate in 2019. Under the current Fair Deal Scheme, in effect, when somebody decides to go to a nursing home, 7.5pc of his or her farm or business can be deducted indefinitely.

If someone ended up staying in a nursing home for 10 years, potentially 75pc of the assets would go back to the State.

This is a situation that farm organisations say is making it unviable for farms and businesses to be kept within a family. They warned that this is acting as a deterrent to the Fair Deal Scheme as a whole for these families.

Despite proposed reforms, it is understood that issues around ownership and succession could prove problematic.

This is considered particularly pertinent in farms, where the land ownership has not been transferred to the active farmer.

Mr Daly said there is no gain for anyone in delaying entering nursing home care as there will be a retrospective aspect to the legislation.

"At whatever stage in 2019 the legislation is enacted by the Houses and signed by the President, we will apply it retrospectively to anyone who is already in a nursing home," said the minister.

However, it is understood that anyone currently in a nursing home, who has paid more than three years at 7.5pc for each year, will not get a refund. "People will have to pay for three years anyway," Mr Daly said.

As such, a person debating about going into a nursing home or waiting for a change, should of course go in," Mr Daly added.

"We can presume with reasonable confidence that this legislation will be well wrapped up within that three years.

"It will apply then to anyone who has been within the system for three years." The minister added: "While there will be no recoupment for those who have been in there for seven years and we will not be giving any money back, anyone who comes into the system or who is one, two or three years into their phase will see the recoupment stop after three years.

"As such, there is no financial benefit to anyone in delaying the decision to go into a nursing home."

Irish Independent