Joanna Tuffy (Dublin Mid West, Labour)

This legislation is called a fair deal but it is the opposite of fair. By saying something is fair, everyone accepts it is so even when it is not. There has been little analysis, particularly by the media to whom the public will look, as to whether the scheme is fair. Our duty as politicians is to hold the Government to account and convey the information to those affected so they can make a judgment on whether the legislation is fair. I will set out why I think this legislation is fundamentally unfair.

The operation of this legislation in terms of people's payments involves a redistribution of wealth from the less well-off to the better off. That is how it is being funded. Money is taken from the less well-off so that people who are better-off can come out better under the new scheme. The better-off will pay less under the scheme while those who are less well-off have to pay more. Another reason the scheme is unfair is that is involves a transfer of State subsidy currently paid to public nursing homes to private sector nursing homes. It privatises public nursing home care and long-term care for the elderly. It discriminates against older people, a point made by many Deputies, including Deputy O'Sullivan, Labour Party spokesperson on health.

On the redistribution of wealth, when the scheme was announced in 2006 the Minister for Health and Children, Deputy Mary Harney published a guide to the scheme in which she gave an example of how payments would work. She published examples of before and after scenarios; she set out what people might pay under the current provisions and what they would pay under the so-called fair deal scheme. One example is of a "Mrs. Fitzgerald" who pays a maximum of €120 per week towards the cost of her care, and under the new scheme as a new entrant to a nursing home she would pay a combination of €145.60 and a deferred contribution of €157.69, which is more than €300 per week. She would pay almost €200 more per month under the proposed scheme than she was paying previously.

When the Minister published the details some months ago she gave examples of co-payments under the Nursing Homes Support Scheme Bill 2008 but she did not give before and after examples, and only published what people would pay under the new scheme. I did my own calculations of the figures for before and after. I am making the same assumptions as the Department of Health and Children and the Minister in the document "Examples of Co-Payment under the Nursing Home Support Scheme October 2008" that the cost of a private nursing home bed is €800 and the current maximum payment in a public nursing home is €120.

One fictional example which represents many people in nursing home beds is "Mr. Doyle". He is a widower who lives alone in his home in Kildare and has a house valued at €200,000 which he may have bought from the council under the tenant purchase scheme. His sole income is the contributory pension of €230 per week. If he went to a public nursing home today all he would pay is €120 per week to HSE.

Under the new scheme, if it is passed, if he were to go to a public nursing home, he will pay €341.69 per week, which is €221.69 more than under the current system. The figure of €341.69 is made up of €184 which is 80% of his assessable income which is his pension, and €157.69 which is 5% of relevant assets and is made up of the value of his home minus a €36,000 disregard and divided by 52 weeks. He can pay it now or it can be taken out of this estate after his death, but he will pay €341.69 under the new scheme compared to €120 under the current system. He will pay €221.69 per week more. How is that system fair for him?

People who currently enter a private nursing home bed and receive no subvention from the HSE are treated unfairly under the present system and they will benefit under the fair deal scheme. One example is "Mrs. Smith", a widower who lives alone in a house in Dublin with a market value of €400,000 and has savings of €42,000 and an income of €260 per week. If she went to a private nursing home now she would pay €800 per week, and if she went to one when the new legislation is passed she would pay €598.39, coming out approximately €200 better off under the new scheme. She is much better off than Mr. Doyle. She has a house with a value of €200,000 more, savings of €42,000 and receives €30 per week in income more than him. She benefits under this scheme at his expense and he is subsidising her under the new scheme.

The scheme benefits those in the middle who have a fairly good value on their house and a modest income, but they are benefiting because money is taken from the less well-off who have no other income than the State pension and a modestly valued house. Many people like Mr. Doyle are currently in public nursing homes. According to statistics from the Department of Health and Children from 2006, 40% of nursing home beds are public. Therefore, there will be a substantial redistribution of wealth because many of those people own their houses. They are not well off and have only a State pension, but they will now have to pay much more and that money will go to pay for people in private nursing homes.

This brings me to another issue. The scheme provides for a transfer of State subsidy from the public to the private sector. When the Minister drew up the provisions in 2006, she gave examples of both private and public nursing homes. Her example of co-payments under the nursing homes support scheme October 2008 basically assumes that everybody will go into a private nursing home, including a Mr. Jones mentioned in her document. Mr. Jones is single with no assets who lives in a local authority house on an income of €212 per week. He pays rent to the local authority and does not own his house. The assumption is that he will go into a private nursing home where he will pay €49.60 more under the new scheme.

The scheme is unfair. It is a redistribution of wealth. It cost the State €34 million to provide tax relief for the development of private nursing homes from the year 2004 to 2006. Substantial amounts of money have been provided to private nursing homes and this will provide more. The Bill will bankroll private nursing homes that the Government has allowed under the tax reliefs to private nursing home builders and developers. The provisions in the Bill will give them a secure income. It does this at the expense of those who are less well off. The Bill privatises nursing home care and discriminates against older people because it assumes their nursing home care is a luxury that should be paid for and provided by the private sector. That is wrong and unfair.

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