Bobby Aylward (Carlow-Kilkenny, Fianna Fail)

I welcome the Nursing Homes Support Scheme Bill 2008 and compliment the Minister for Health and Children, Deputy Mary Harney, and her Department for tackling a tricky and sensitive issue. It is a source of great anxiety, not only for the residents of nursing homes but for their relatives as well.

I am glad we have recognised a situation which has been extremely difficult for so many people. The Bill comes up with a practical solution which is innovative, transparent and, most importantly, completely fair. Anyone who has had any dealings with nursing homes, whether they are public or private facilities, is only too painfully aware of the very high costs associated with them, whether they are to the individual resident, their family or to the State. The issue of long-term nursing home care is fraught with heavy financial considerations, including the money which has to be laid out every week.

It also involves intense emotion and trepidation. People have told me that making the decision to admit a father or a mother, a husband or a wife, to a nursing home on a permanent basis was one of the most traumatic events in a lifetime. They tell me they are racked with guilt and remorse, feeling they have let their relatives and themselves down. They think they have condemned a parent or a spouse to an institution which is little more than a departure lounge where people sit and wait until its their turn to exit. Relatives usually feel terrible and inadequate that they were not in a position to look after a loved one in their own home. The nursing home was seen as the last option.

Years ago there was a strong tradition where elderly people were able to remain in their own home or they could move in with a son or a daughter who were only too willing to look after their every need until the end. Regrettably, we have seen a marked trend away from this pattern in recent years. It is due, in large measure, to lifestyle changes, financial demands and social conditions. As nearly every member of a household is in work, they cannot take on the added responsibility of looking after an elderly or infirm relative.

Approximately 22,750 people live in long-term residential care, either in public or private nursing homes. That represents about 5% of the over-65s population, or one in 20 people. Due to demographic factors and our high-age dependency, it is estimated that by 2036, 44,000 people will be in long-term nursing home care. The State foots the bill for two thirds of the care costs, or approximately €790 million per annum. The projected cost to the State — that is, the taxpayer — for this year is more than €1 billion. According to a survey published earlier this year by the organisation representing voluntary and private nursing homes, the weekly cost of private nursing home care can be €1,330, or almost €69,000 per annum. The average weekly cost of care in 2006 was €778. That sort of money, without subvention, would kill Samson. Not everyone has the resources to defray the full amount of these fees. The HSE reckons that private nursing home care can cost an average of €50,000 per annum and, according to the HSE, a bed in a public nursing home costs around €1,700 per week. Of course, the taxpayer bears about 90% of that charge.

At present, the State is spending €790 million to subsidise nursing home care and about half of all payments to nursing homes are in the form of subventions from the HSE. Residents in private nursing homes are means-tested and they carry approximately 60% of these care costs themselves. Where appropriate, the taxpayer subsidises the cost of this care by way of subventions from the HSE. The private and voluntary nursing home sector accounts for around 65% of all long-term places and it accommodates 18,883 residents at present. In contrast, the figure for beds in public nursing homes stands at 9,675.

It is clear that the system as it operates at present is wholly inconsistent and irrational. On the face of it, it appears to be unfair and complicated and to have little or no equitable basis. The State subvention scheme can often be inconsistent and is sometimes very arbitrary indeed. There does not appear to be much logic inherent in the current arrangements for public and private residents. The support system is blatantly unfair and unpredictable. It is ridiculous and unacceptable that there should be such a glaring difference between the public and private costs. As I understand it, the existing system for residents of public nursing homes is such that their contributions towards the costs of their care are based on a flat rate and are irrespective of their means. In contrast, State support for people who are resident in private nursing homes is means-tested. It is of course the case that many private residents receive no State support whatsoever. The existing system means that people on the same incomes can end up with vastly different care costs, which is not tenable. There is no sense to it and, in principle or in practice, it cannot be sustained in the long term.

This new scheme is entirely voluntary and nobody will be put at a disadvantage in any way. For those who wish to apply to avail of the scheme, the new proposals in this Bill confirm that from hereon all nursing home care needs will be assessed in a uniform manner by the HSE and everyone's financial circumstances will be calculated in exactly the same way. Everyone will benefit from financial support from the State if that is necessary. Furthermore, there will be an objective assessment of a person's particular medical requirements and, in a welcome departure, his or her social context, in order to see if the necessary support mechanisms can be achieved while allowing the person to remain in his or her own home and community. For many people, the nursing home option may not be ideal and it may be preferable to continue to live at home provided the necessary care and support is available locally. Under the new scheme, everyone who has assets such as savings, stocks and shares, land or property worth more than €36,000 will have to pay 5% of the value of these assets on an annual basis and for every year of his or her care in a nursing home. Naturally, the principal residence will be excluded from this assessment. Where there is a shortfall and where the individual has qualified for ancillary support, the State will pay the deficit for the duration of the person's stay in the nursing home and it will then be able to recoup that money by placing a fixed charge on the house.

As I said earlier, for all those confronted with the decision on whether to go into a nursing home or whether to consign a relative to long-term nursing home care, this matter is very distressing and the decision process is often riddled with agonising soul-searching. It is a momentous decision for anyone and, naturally, the major expense involved is a significant worry. For those faced with private nursing home care, the ongoing costs can be horrendous and are often very difficult to meet in the longer term. We are all familiar with cases in which the costs are such that the cash runs out. I for one have witnessed people being forced to sell land or other property to pay for their care. Circumstances are even more stark when one member of a couple is in a private nursing home while the other remains in the family residence. For many people there has been no choice but to sell the family home, with both members of the couple then having to reside in the nursing home. There is no doubt that such costs have placed an enormous financial burden on ordinary people and their families and the pressure is often hard to withstand. Elderly people can be vulnerable and fragile, and the escalating costs of nursing home care have placed a huge worry on them.

It is my firm belief that all those who can afford to make a contribution towards their nursing home costs should do so and it is only fair that everyone's assets and means should be assessed in accordance with common criteria to ascertain exactly how much they can reasonably afford to pay. I fully support the idea of attaching a charge to the home, and allowing that charge to be recouped from the person's estate after his or her death is a very sensible measure. Many people do not realise until they are actually in the nursing home for some time — maybe longer than they had expected — that the ongoing expenses can be astronomical. It is only when they are in the nursing home, perhaps with diminishing faculties, that they begin to experience real financial hardship. For anybody, young or old, this is a terrible torment and it must be awful to contemplate selling the family home as a last resort when the money begins to dry up. For very many people, there is no alternative.

The new proposal should give great peace of mind and reassurance to many people. They can now be comfortable in the knowledge that the family home will remain intact until after their deaths or until the estate of the surviving member of a couple is settled. From now on the State, rather than the family, will assume the task of managing the rising costs of nursing home care and will be charged with negotiating the most competitive rates with the various nursing homes. In effect, participating nursing homes will enter into a contract with the State, thereby ensuring that costs are predictable and are managed adequately. This is in everybody's interests.

The proposition essentially means that people will not be forced to come up with the necessary cash on a weekly or monthly basis. Instead, the State will move to meet the shortfall and can subsequently claim up to 5% of the value of the house every year up to a maximum ceiling of three years. Thus, the greatest proportion of the value of the house that can be secured by the State will be 15%. This is a fair and reasonable deal for everyone. Everybody will be expected to contribute according to his or her individual means and assets, no more and no less. New entrants to the scheme will be obliged to pay up to a percentage of their annual income towards the cost of their care, regardless of whether they go into a public or a private nursing home. The amount will always be less than their disposable income. If that proportion of a person's income is not sufficient to meet all costs, the State will fill the breach and pay the remainder. Overall, it is expected that the State will continue to meet two thirds of the costs of long-term care.

The current annual cost to the Exchequer of subsidising nursing home care is €790 million. The expected cost of this new scheme will be in the region of €920 million in its first year of operation and it will be accessible to everyone in need of long-term residential care, irrespective of age. The proposed legislation will alleviate much of the hardship and stress which has been visited on people and their families over the years. The need to come up with regular cash contributions will be eliminated and nobody will end up in the lamentable position of having to sell off the family home during his or her lifetime. For many people, in a nursing home or otherwise, the family home represents their last bastion of security and the thought of having to dispose of that home can be devastating.

It is important to reiterate that the new system will eliminate the anomalies and the discrepancies that prevail at present. At last, we are presented with a clear and coherent framework which will ensure that long-term care is affordable and accessible to everyone in accordance with his or her ability to pay. It is timely that we address the strain and the difficulties people have experienced as a result of high nursing home costs. Now that we are facing the prospect of ever-increasing numbers requiring long-term nursing home care, we must consider realistically the level of State support available to offset the burden of the charges. We have to take into consideration that State resources are finite in this regard. The new system is imaginative and workable and is one the State can afford. The days when we could afford to hand out money willy-nilly are gone. It is extremely difficult to justify a system which does not treat people equally and appropriately to their means.

The generality of people who are struggling to pay their nursing home expenses have welcomed this initiative. The truth is that nursing home fees have crippled many individuals and families in this country, who have had no choice but to take a place wherever it was available and pay the going rate. The fair deal represents a sound strategy which will usher in a new era for everyone, particularly the elderly, in the 21st century. Those who need financial assistance to defray the cost of their care will get that help from the State and this will ease what has been an intolerable burden on everyone for a long time. I am satisfied to commend the Bill to the House.

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