INCOME raised from family homes being rented out while their owner is in nursing home care will be exempt from contributions to the State’s Fair Deal scheme under soon-to-be-revealed plans.
The Government’s Housing For All plan will commit to excluding rental income from the scheme – in order to encourage people in nursing homes to rent out their properties while in care.
Legislation which imposed a three-year cap on annual contributions to Fair Deal from the sale of a family home was recently signed into law by President Michael D Higgins.
And now Housing Minister Darragh O’Brien is hoping his plan to exclude rental income from the scheme can be introduced as an amendment to existing legislation when the Dáil returns after the summer recess.
This could mean people in the scheme will be able to rent out their main residence while in care – and keep all the revenue raised.
The scheme currently provides an exemption for rental income in instances where a partner or child aged under 21 years continues to live in the family property.
In any other circumstance, 80pc of rental income is taken by the Government towards the cost of a person’s nursing home care.
The Housing For All plan will propose that the exemption for family members will be extended to rental income raised from any tenant staying in a person’s principle residence while they are in care.
There are different estimates for how many homes may currently be vacant because a person is currently in State nursing home care. A review carried out by the Housing Agency and the Department of Health in 2017 estimated around 9,300 family homes may be lying vacant while their owner is in State care.
Meanwhile, the Revenue Commissioner has said that there were 7,800 claims for an exemption from the Local Property Tax due to illness in 2020.
However, it has also been suggested within Government that the number of homes which could be freed up by the rent exemption could be closer to 4,800 when other factors such as homes in probate are taken into account.
Mr O’Brien’s plan to exclude rent from Fair Deal contributions has faced resistance from Minister for Older People Mary Butler, who feared the policy shift could result in elder abuse.
Ms Butler raised concerns with her Fianna Fáil colleague over the potential for family members to prematurely put older people in care so they can rent out their home.
However, the Waterford minister is understood to have received assurances that precautions will be taken to ensure that vulnerable people in care are not taken advantage of.
Attorney General Paul Gallagher is working on the updated Fair Deal legislation with the aim of having the changes introduced before the end of the year.
Mr O’Brien will flag the Government’s commitment to exempt rental income in his much anticipated Housing For All plan.
It emerged last week that the plan had to be delayed for a number of weeks as details of how the billions of euro in housing funding will be spent were still being discussed.
Mr O’Brien has been pushing for a new State scheme to allow first-time buyers refurbish old homes. It is also expected the plan will contain incentives to encourage older people living in big homes to move into smaller houses.