Minister for Older People Mary Butler made a late-night intervention to stop a government plan to allow nursing-home residents keep all income they raise from renting their family homes.
Ms Butler raised concerns over the impact of such a move on the pension payments and medical cards held by those staying in nursing homes under the State scheme.
The minister also feared ditching the need for people to make contributions to Fair Deal from income raised from rent could potentially result in elder abuse.
Following the intervention it was agreed to reduce contributions to the Nursing Home Support Scheme – which is also known as Fair Deal – on rent to 40pc.
This means a resident of a nursing home will soon be able to keep 60pc of any income raised from renting their main residence while they are in care.
Housing Minister Darragh O’Brien and Health Minister Stephen Donnelly had agreed to cut contributions from 80pc to zero on any rent income to encourage people in nursing-home care to rent their homes.
Changing the rules for rental income has been in the pipeline for some time, but the Ukraine refugee crisis meant the Government decided to fast-track plans to change the scheme.
A memo outlining the plan was drafted and submitted to the Office of the Taoiseach.
However, yesterday evening, Ms Butler raised a series of objections to plans to ditch the need for residents of a nursing home to make any contributions to the scheme from rental income.
Central to her concerns was the potential impact of such a move on the pension entitlements of someone staying in a nursing home under the State scheme.
She feared nursing-home residents would lose their entitlement to non-contributory pension payments if they were in receipt of significant income from rent.
The minister was also concerned about the impact of the additional income on holders of medical cards who are in nursing-home care.
She also said in some parts of Dublin people could end up profiting from the Fair Deal scheme if they are charging significant rent for their house for far more money than they are contributing to the scheme.
The minister was especially concerned that some people may be prematurely put into nursing homes by relatives who want to take advantage of the new rules on rental income.
She agreed to proposals to allow residents keep 60pc of rental income.
Minister O’Brien is planning to expedite changes to the Fair Deal scheme through amendments to building regulation legislation which is currently at committee stage in the Oireachtas.
It is hoped the changes to the scheme will be introduced before the Dáil summer recess.
The Government wants to make the changes as soon as possible in the hope it will free up 8,000 homes owned by people who are currently resident in nursing homes.
However, some in government believe the number of houses which will be put up for rent will be a fraction of that figure
In many cases, relatives of the person in care are still living in the home, while other people will not want to rent their family home – even if they are in care.
It is hoped around 2,000 homes will eventually be put on the rental market once the changes to the Fair Deal scheme are enacted.