Get a rundown of the Fair Deal Scheme and IFA’s campaign for changes to protect the viability of family farms.
Where an individual requires nursing home care, there are two options: either the individual pays entirely from their own resources for care, or they can apply to the State through the Fair Deal Scheme, for support towards the cost of meeting their care needs.
The Fair Deal scheme provides great assistance and professional care for many older people. However, the treatment of productive income generating assets, such as the family farm, has potentially serious ramifications for the viability of some farms.
IFA has been campaigning since 2012 for changes to how the scheme operates for farm families, and most recently in October 2016 made a detailed presentation to the Working Group on the Fair Deal Scheme, seeking:
- a reduced charge on farm assets that reflects the ability to pay;
- a reduction to three years in the time for which a financial assessment would apply to assets transferred prior to entering the scheme; and,
- a broadened interpretation of ‘sudden illness or disability’.
How does the Fair Deal Scheme work?
The Fair Deal Scheme essentially works out what an individual can afford to pay from their own income and assets, and the State pays the remaining balance. Nobody will pay more than the cost of actual cost of care.
A key feature of the scheme is the optional Nursing Home Loan, which facilitates the deferral of payment to be collected from the person’s estate after their death.
An individual contributes up to 80% of their assessable income and a maximum of 7.5% of the value of any assets per year towards the cost of care. The first €36,000 of an individual’s assets, or €72,000 for a couple, is not taken into account during the financial assessment and the principal private residence will only be included in the financial assessment for the first three years.
How does the Fair Deal Scheme differ for farm families?
The value of farm assets is taken into account in the Fair Deal financial assessment and. unlike in the case of other individual assets, the 3-year limit does not apply – A 7.5% per annum contribution applies for the duration of an individual’s stay in the nursing home.
In very limited circumstances, the three year cap may apply but only where a farmer has been involved in the daily management of the farm but suffers a sudden illness or disability that requires nursing home care and a family successor certifies that he or she will continue the management of the farm to qualify.
If a farm asset was transferred less than five years before entering the scheme it is still included in the financial assessment meaning a successor is held liable for nursing home costs. This causes huge difficulty as the successor is then limited on the investments they can put into the farm due to the potentially high liability that remains on the asset. There are real concerns that the viability of some farm businesses may be undermined or lost while trying to meet the cost of care.