Kieran O'Donnell (Limerick East, Fine Gael)

I am pleased to contribute to the debate on this Bill. We all know of families who are worried about the cost of nursing home care, which is the biggest single issue facing elderly people at the moment. In addition to being worried about the costs involved, such people and their relatives are concerned about how they will be looked after in their later years. We must get the details of this legislation correct so that such people's worries will be alleviated and they will be able to avail of proper nursing home care in future.

The Bill must deliver what is expected of it. There is a feeling among elderly people that it will enable them to afford comfortable nursing home care. We have all been approached by constituents asking about the details of the Bill and whether it will benefit them. The general thrust of the legislation is welcome but I am concerned about some elements of it, which will have to be examined on Committee Stage. We must deal with people's concerns by ensuring that the Bill's provisions are correct.

Deputy Kennedy referred to the cap on elderly people's assets, but the cap is only on the principal private residence which, at 5% for three years, is 15%. However, there is no cap where people have non-principal private residence assets. There is 5% per annum for the time they are in the nursing home and it is stated that it will not exceed the cost of nursing home care. That was not the purpose of the Bill, however. It was to make such care affordable for people. That provision needs to be examined. Typically, a retired farmer may have a house and a farm. His house may be worth less than the farmland and he may not be earning a large income. He will be assessed on 5% per annum for three years on his house — his principal private residence — plus one acre, but he will be assessed for 5% per annum for the duration of the period he is in a nursing home. That measure needs to be examined because it is penal. Equally, a person's assets could be tied up in their home, which may be worth €2 million or €3 million, and would be capped at 5% for three years.

My second point concerns the interest the State will apply to the time for which people are in a nursing home and the moneys advanced by the State during that period. Schedule 2 states that moneys advanced by the executive pursuant to ancillary State support in a year shall be aggregated and the consumer price index, which relates to mid-December in that year, shall be taken to be the base figure in respect of those payments.

There is an inherent flaw in that provision, however, because the consumer price index over the last ten years has, in many cases, exceeded the market interest rate. The consumer price index could exceed the cost of borrowing money and therefore such people would be penalised. On Committee Stage we should consider applying a charge which would be the lower of either the consumer price index or the market interest rate applying on that date. That would be fairer and would not penalise the elderly who constitute one of the most vulnerable sections of society. Take, for example, the issue of medical cards for over 70 year olds. When people grow older, their two greatest worries are for their health and their savings. Demographics have changed and it is no longer the case that the elderly can rely on their extended families. Rather, they must go into nursing homes and, because they are living for longer, they quickly find their savings gone. Their security vanishes in a short period.

This Bill must ensure that nursing home care is affordable, equitable and consistent, be it public or private, so that people can feel secure. An allowance of €36,000 for a single person or €72,000 for a married couple is available against the value of assets before liability arises under the scheme. However, there appears to be no commitment to indexing the thresholds. Consequently, the liability in real terms will increase with the length of care. I hope that the value of assets will increase after the recession, but we must ensure that the exemption level is increased in line with inflation in the consumer price index, CPI. The State will apply the CPI to the interest rate charged on the repayments under the scheme, but not to the allowance. I hope that the Government takes this important matter on board.

We must be positive and constructive concerning issues not addressed in the Bill. Its introduction is positive, as is the Government's decision to ensure, via the Finance Bill, that the higher rate of tax relief will be given on nursing home care. I hope that continues to be the case, but tax relief at the standard rate has been introduced on medical expenses, a model based around private medicine. This is a penal measure. The message from the Dáil tonight must be loud and clear, namely, taxpayers should submit their 2008 medical expenses before the end of the year to ensure that they receive relief at the higher rate.

It is important that we get the scheme's details right and ensure that the cap on principal private residences is extended to other assets. Will the Minister of State take this suggestion on board? Our debate on agriculture is opportune. A retired farmer and his or her spouse and family should not be penalised because their money and assets are tied up in their farm and home rather than in their home alone. This matter must be considered.

People may avail of the scheme in respect of family members. However, the Bill is vague about the method to be applied in valuing the assets of a deceased person's estate. I assume that the method will be the same as that applied to capital acquisition tax, but the point should be clarified. When a parent enters a nursing home, the property in question is the family home, farmland, etc. Instead of selling an estate's assets to meet the charges, family members could reach an arrangement whereby they could save, but they would receive no tax relief on this. It is critical that people can afford the scheme, which is resource-capped.

Any new scheme must address the difficulties encountered in the old scheme. Under the current scheme, the cost of nursing home care is prohibitive for those who seek it and their families, who are the ones who pay in many cases. Like many Government schemes, the Disability Act, for example, promised needs assessments, but those measures were resource-capped. Aspirations are great, but schemes fail if content and funding are not delivered. For this reason, it is critical that the Bill's scheme be enacted in a form that gives the elderly and their families comfort in terms of affordability and the provision of appropriate care. How much time have I remaining?

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