Mr. Seamus McCarthy:

Note 13 of the HSE's annual financial statements shows that in 2015, it incurred expenditure of €968 million on the provision of long-term residential care. As indicated in the graph shown on the screen, the expenditure, which has remained relatively stable, involves payments to private nursing homes of approximately €600 million, accounting for just under two thirds of the total, and expenditure on public nursing home costs accounting for around one third.

The nursing homes support scheme, also referred to as the fair deal scheme, was introduced in 2009. It provides financial support to individuals deemed to be in need of nursing home care. The scheme is cash-limited, rather than demand-led. That means the HSE can only approve support for new applicants to the extent that its budget allocation allows. As a result, waiting times for admission to the scheme vary over time.

Operationally, the HSE carries out a financial assessment to establish how much an individual deemed to be in need of nursing home care can contribute to the cost of his or her care. The assessment takes into consideration both the applicant's income and assets. An individual's contribution, which cannot exceed his or her cost of care, comprises inpatient charges up to a maximum of 80% of his or her income and up to 7.5% of the value of property assets over three years. The HSE's inpatient charges income has remained stable at around €80 million a year, and is included in the HSE's income as reflected in the annual financial statements.

Individuals who own land or residential property, including a family home, have the option to defer the associated assessed care contribution to a future date. This option is referred to as ancillary State support or the nursing home loan. Such loans fall due for repayment usually on the death of the individual, or the prior sale of the asset. The Revenue Commissioners are responsible for collection of the repayments, the amount of which is notified to them by the HSE. The receipts collected are paid directly to the Exchequer. The cumulative position in regard to nursing home loans over the period 2012 to 2015 is indicated in the following graph which is now onscreen. The committee may wish to note that the cumulative amount the HSE notified the Revenue to recoup up to the end of 2015 was €50 million. At 31 December 2015, Revenue had collected 64% of the total amount advised to it for collection, leaving a balance outstanding at that date of €17.8 million.

The Health (Repayment Scheme) Act 2006 provided a legal framework for the repayment of charges that were incorrectly imposed by the former health boards on persons in long-stay care who, since 1976, had a medical card, or who were entitled to a medical card. That included the establishment of a special fund account, separate from the HSE's financial statements, to manage the payments. Since the establishment of the scheme, around €453 million has been repaid through the account, to just over 20,000 claimants. As the graph which is now onscreen indicates, the bulk of that was paid between 2007 and 2009. Payments amounting to €1.7 million were made in 2015.

The 2006 Act also provided for the establishment of a parallel fund account into which claimants could make a voluntary donation towards once-off improvements in public health services for dependent older persons and persons with disabilities. Since 2007, around €356,000 has been donated to the fund. Those donations, along with any interest earned, have been paid over to long-stay units. There was no activity on the donation fund account in 2015.

The 2006 Act also provided a framework assigning the HSE statutory responsibility for the operation of patients' private property accounts. The funds in the accounts are held by the HSE, in trust, on behalf of individuals living in long-stay care institutions run by the HSE. At 31 December 2015, the total value of funds held was around €129 million in over 9,600 patients' private property accounts in operation in 156 care centres throughout the country. The sum of €119 million, or 92%, was being held and managed centrally by the HSE. The remaining 8% or €10 million was held and managed by local care centres, in commercial bank accounts. Accounting records held locally record each individual patient's current balance and transactions.

The statement on internal financial control associated with the patients' private property accounts draws attention to a number of important controls in the management and operation of accounts of this nature. The statement also sets out the actions being taken by the HSE to address control weaknesses noted by our audits, for example, the absence of required routine reconciliations, insufficient segregation of duties in some care centres due to low staff levels, and inadequate documentation by some care centres over withdrawals from patient accounts.

Note 9 of the accounts discloses that at 31 December 2015, the HSE was holding interest earned totalling around €14 million which had yet to be allocated to patients. Although a central unit was established in 2006, care centres continued to hold significant funds in local bank accounts for some time thereafter. Interest earned during that time was not credited to individual patient accounts. The HSE is currently in the process of examining how those funds should be allocated.

Note 8 of the accounts also discloses that prior to the establishment of the HSE, the health boards had, based on legal advice then available to them, retained interest earned on patient account balances as a contribution towards their costs incurred in managing the accounts. Subsequent legal advice noted that they did not have the legal authority to use the funds in that way.

Additional funding will be required to repay these amounts, which relate to periods prior to 2005. The total amount involved in this regard is estimated at approximately €30 million.