Michael Harty (Clare, Independent) | Oireachtas source

I move:

That Dáil Éireann:

recognises:— the importance of the Nursing Homes Support Scheme, which provides essential financial support for those in need of long-term nursing home care;

— that the participants of the Nursing Homes Support Scheme contribute to the cost of their care according to their income and assets, and that this contribution can be considerable where an individual contributes up to 80 per cent of their assessable income, and a maximum of 7.5 per cent of the value of any assets per year towards the cost of care;

— the uncertainty created for farm families and family businesses by the potentially uncapped liability in the financial assessment of farm and business assets, particularly, when the farm or business has not been transferred or when the asset has been transferred but for less than five years;

— that the 7.5 per cent per annum contribution applies for the duration of an individuals stay in the nursing home, save where a three year cap applies to the applicants principal residence;

— that in certain circumstances a three year cap can be applied to the assessment of non-residential assets in the case of sudden illness or disability, but that there is considerable vagueness in the definition of ‘sudden illness or disability’, which provides for such a cap; and

— the difficulties and unfairness associated with assessing the notional income from a farm at a rate of 7.5 per cent of the current market value of that farm;further recognises:— that family farms make a vital contribution to growth and employment in rural areas, forming the backbone of our rural economy, where it is estimated that farm families spend €8 billion per year in the Irish economy, most of which is spent locally, supporting local jobs and enterprises;

— that family farms are passed down from generation to generation and that it is essential that Government policy support and encourage the lifetime transfer of the farm;

— the adverse impact of the financial assessment on the self-employed and farm families which is affecting the viability of the farm and business for the next generation;

— that there are approximately 140,000 family farms in Ireland with an average size of 32.7 hectares per holding;

— that the Teagasc National Farm Survey shows that the average family farm income was €26,300 in 2015 and that farm family income varies considerably, with 70 per cent of farms earning an income of less than €25,000;

— that the age of the average Irish farmer is 57 years with 25 per cent of Irish farmers aged older than 64 years;

— that the assets farmers and other self-employed family businesses have are productive assets, and are required to generate income and should not be considered as a measure of additional ability to pay;

— that the current financial assessment is not progressive, fundamentally unfair and has a disproportionate impact on low income farm families, where any further dilution of the farm assets could make the farm non-viable for future generations;

— that under the current system farm families fear the viability of their family farm will be undermined or lost in meeting the cost of long-term care; and

— the commitment given in the Programme for a Partnership Government to review the Nursing Homes Support Scheme to remove any discrimination against small businesses and family farms; andcalls on the Government to:— immediately publish the recommendations of the Interdepartmental Working Group on the Fair Deal Scheme or in the event that this group have not finalised their work to ensure that their work is finalised within three months from this date;

— honour the commitment in the Programme for a Partnership Government to remove discrimination against small businesses and family farms;

— introduce a reduced charge on the farm/business assets that removes the uncertainty for farm families and the self-employed which protects the future viability of the farm/business asset for future generations;

— reduce the time an asset needs to be transferred prior to entering a nursing home from five to three years;

— provide immediate clarification on the definition of ‘sudden illness or disability’, which provides for a three year cap to be applied to non-residential assets, and to provide a broadened interpretation of ‘sudden illness or disability’ to include those who have been cared for at home for a period of time prior to seeking nursing home care;

— publish and bring forward the necessary primary legislation required to bring effect to these proposed changes to the Nursing Homes Support Scheme without delay following the completion of the review of this issue; and

— ensure that sufficient funding is allocated in Budget 2018 to allow for these changes to become operational in 2018.

The nursing home support scheme provides essential financial support for those who are medically in need of long-term care in nursing homes. This allows for the balancing of the personal cost of nursing home care for individuals with the financial support of the State. A key element of the scheme is the optional nursing home loan, which facilitates the deferral of payments to be collected from a person's estate after death.

However, there are certain anomalies which apply to farming communities and other self-employed small business operators. There are four anomalies in particular. The first is that the system leads to a significant impediment to the viability of a farm and poses particular problems for farming families. Farms are often not disposed of when the owner dies but, rather, are traditionally passed down through a family line to a successor. The principal anomaly is that there is no cap on the payment for nursing home care when applied to the value of a farm, especially when new owners are carrying on farming as their principal livelihood.

This has the greatest impact on lower income farms, where any further dilution of assets could render the farm non-viable for future generations. The farm is a productive asset which is required to generate income and is not a measure of the ability to pay. A cap of three years should apply to the 7.5% charge, as applies to principal residences for those who are not farmers.

The second anomaly is the definition of "sudden illness and disability". The third anomaly is that an asset has to be transferred for less than five years prior to the application to the scheme. If this is not the case, the asset is part of the financial assessment of the scheme. This should be reduced to one year.

There are also difficulties when a farmer has developed diminished mental capacity, as in the case of dementia, and is not in a position to authorise the transfer of the farm. There is a commitment in A Programme for a Partnership Government to review the nursing support scheme and remove any discrimination against small businesses and family farms. We, as the Rural Independent Group, are calling on the Government to honour this commitment.

We are calling for the immediate publication of the recommendations of the interdepartmental working group on the fair deal scheme. We call on the Minister to introduce a progressive financial assessment system that will reflect the value of the asset and its income generating capacity, which will protect farm viability for future generations, while at the same time making a reasonable contribution towards nursing home care.

The principle of the nursing home support scheme is that participants are assessed on their medical need, income and assets. Some 80% of their assessable income and a maximum of 7.5% of the value of their principal private residence per year, ordinarily up to a maximum of three years, which is a maximum of 22.5% of the value of their principal residence, is assessed. This is usually based on the value of their home, which is normally collected from their estate on their death.

The first €36,000, or €72,000 in the case of a couple, of savings is not taken into account. However, in the case of farmers or small enterprise owners this three year cap does not generally apply, except if illness is sudden and disabling. The problem for farmers and small business owners is that the value of the enterprise is included in the asset value, even though this valuation may bear no relation to its earning capacity.

The future integrity of farms is essential to allow the next generation to continue to maintain the viability of farms or small businesses. Farmers who continue to farm land do not see a farm as an asset. Rather, it is something they are caretaking for the next generation. The liability of nursing home care costs is calculated on the notional value of a farm. This can jeopardise any chance of handing over a farm intact to the next generation.

The anomaly threatening the viability of a family farm is in urgent need of review, and has serious ramifications for the viability of small farms. Obviously, it is crucial that fines are transferred prior to the need for nursing home care, and this should be part of the financial management of all farms. These anomalies create an uncertain liability on farmers, small businesses and their families and the future viability of small farms and small businesses in terms of being sustainable into the future because much of the asset value could be consumed by the uncapped liability of the charge on nursing care.

If a farm or business has been transferred over five years prior to the need for nursing home care, then the asset value does not arise. However, if the transport has not taken place or has been done inside the five year threshold, then the asset value of the farm is taken into account when assessing liability. Farms are not usually disposed of after death but, rather, are passed down to the next generation. In this context, the 7.5% charge on farm value applies for the duration of the resident's stay in a nursing home. If this is prolonged, the value of the farm is substantially diminished when the resident dies.

Sudden illness or disability will trigger the three year cap on non-residential assets, but there is a considerable vagueness in the definition of this term. For instance, the development of dementia over several years resulting in the need for nursing home care would preclude this capping of payments. Thus, fairness, justice and equality of the assessment of farms and small businesses is obviously called into question.

These anomalies in the fair deal scheme make the transfer of farms and small businesses to the next generation very difficult, and could convert what is a marginal income for many farmers into one which is wholly unsustainable and uneconomic. The continued viability of the farm will be undermined or lost in meeting the cost of long-term care.

The average farm income is €26,000, with 70% of farmers earning less than this figure. Consideration should be given to applying a cap on the nursing home charge, which is calculated on the non-residential productive asset, that is, a farm, which is passed on to the next generation.

We call on the Government to introduce a progressive financial assessment that reflects the value of the asset and its income generating capacity in order to protect the traditional Irish farm model for the next generation. We call on the Government to publish the interdepartmental working group report on the fair deal scheme as soon as possible and within at least three months if it is not completed. We call on the Government to reduce the charge on farms and small business assets to reduce the uncertainty for family enterprises. We call on the Government to provide clarification on the term "sudden illness or disability" and to broaden it to reflect disability which is independent of acuteness. It must reflect the needs of the patient rather than the acuteness of the illness. Obviously, legislation will be required to amend the nursing homes support scheme. This should be provided for immediately following the publication of the interdepartmental working group's report.

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