Reformed Fair Deal plan may still not be attractive enough for many farmers

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Shane Phelan and Ciaran Moran

The Fair Deal scheme could still end up being ruled out as an option for nursing home care by many elderly farmers, despite the Government's bid to make it more attractive.

Agricultural solicitor and tax consultant Aisling Meehan warned proposed changes may not make much difference. She warned farmers will always be resistant to participating in any scheme where there is a risk land may have to be sold.

The comments came following revelations proposals to cap the contribution farmers and small business owners have to make under the scheme have been delayed to iron out legal issues.

Ms Meehan said while the proposals were welcome, typically a farmer doesn't want to risk 1pc of their farm, never mind the proportion that may have to be sold off under the Fair Deal scheme.

The scheme provides financial help for people who need long-term nursing care, with those taking part making a contribution, while the State pays the balance.

An assessment of a person's income and assets is done to decide what someone should pay. There are two elements to the contribution - 80pc of a person's income, typically a pension, and 7.5pc of the value of their assets per annum.

A person's principle residence is counted as an asset, but only for three years.

But there is no three-year cap at present for farms or family businesses and, in theory, someone who stays in nursing home care for a decade could end up owing 75pc of their farm or business to the State.

The Government is now planning to apply the three-year, or 22.5pc, cap to farms and family businesses if they continue to be operated by a close relative.

But Ms Meehan said she was unsure if the changes would make much difference as many farmers are transferring land while they are alive, rather than leaving it in a will.

"They want to have it transferred over before the child or nephew or niece is 35 to save on stamp duty. The biggest driver of farm transfers is the fear of a risk of a farm being taken into account in the Fair Deal scheme," she said.

Meanwhile, Irish Creamery Milk Suppliers Association president Pat McCormack welcomed a commitment that the proposed cap will apply retrospectively. He said this was important for farm families affected by the current rules of the scheme.

The scheme change should be retrospective to all current participants in the interest of fairness, he said.

"In addition, we would think it is important that the legislation is passed as soon as possible to remove any uncertainty for people impacted by this change and to ensure that family farms can pass from one generation to the next in a financial stable and viable manner," he said.

Irish Independent