Nursing home residents to keep all the income from renting out their property in major Fair Deal revamp
Nursing home residents will be able to keep all income raised from renting their family home under significant changes to the Fair Deal scheme.
In response to the long-running housing crisis and the ending of the eviction ban, the Government has committed to “eliminate remaining barriers” for older people wanting to rent out their homes when they are in care.
The pledge was made in a counter-motion to Sinn Féin’s private members’ motion seeking to extend the controversial eviction ban, which was debated in the Dáil last night.
The move followed the Regional Independent Group (RIG) demand for an easing of rules surrounding contributions to the Nursing Home Support Scheme (NHSS), or Fair Deal as it is also known.
The group, led by Independent TD Denis Naughten, set out eight emergency housing measures it wants the Government to introduce in return for its support in voting down the Sinn Féin motion and a no confidence motion expected to be tabled by the Labour Party next week.
The Government also committed to significant changes to the Croí Cónaithe Scheme, something the RIG also sought.
The Independents also secured changes to the Housing Assistant Payment (HAP), which will mean landlord payments will be maintained by the State even if tenants default on their contributions.
Under the Fair Deal scheme currently, nursing home residents can keep 60pc of rental income they get from their former residence.
Before changes to the scheme were introduced by Minister for Older People Mary Butler last November, people could keep only 20pc of rental income and 80pc went towards their nursing home care.
The Government is now planning to allow those in nursing homes to keep all revenue raised from renting out their home. However, they will have to pay tax on the income they raise.
Ms Butler has concerns about eliminating rental contributions from the Fair Deal scheme over fears older people will be taken advantage of.
She is concerned people could be prematurely put into State care so their homes could be rented.
Since the changes to the scheme were made last year, just 24 people notified the HSE they would be renting out a home while in care.
Meanwhile, there is increasing concern in Government that schemes set up to avoid a tsunami of evictions in the coming weeks could hit first-time buyers and even drive-up house prices.
The Coalition measures to offset the impact of ending the eviction ban include ramping up the existing local authority “tenant in situ” scheme for those receiving housing assistance, giving tenants first refusal to buy the property they are renting if their landlord decides to sell, and a cost-rental backstop where the State intervenes to buy the property and rent it back to a tenant on a not-for-profit basis.
However, a senior Government source acknowledged the significant policy interventions, which have been described as a “safety net” for tenants, amounted to a “Hobson’s choice” and could affect the market for first-time buyers, who will face competition from the State for properties.
It also runs the risk of driving up house prices. “Every single change that is taken in the housing area has an impact,” the source said.
“We can’t make one decision without having ramifications.”
However, another Government source argued that extending the blanket ban on evictions would have a far greater negative impact on first-time buyers.
The source argued that the first-refusal option would open up more homes for purchase and insisted it was unlikely that renters without support would have the spending power to drive up prices.
It comes after the City and County Management Association (CCMA) told the Oireachtas Housing Committee that tenant-in-situ schemes operated by local authorities are competing with first-time buyers because the council buys properties outright.
“The challenges include…competition with first-time-buyers, among others,” the CCMA told TDs and senators.