Tuesday, 2 December 2008
Nursing Homes Support Scheme Bill 2008: Second Stage (Resumed)
I welcome the opportunity to speak on this legislation, primarily because of its emphasis on accessibility and affordability. These are two of the most important elements of any measure taken relating to health care, and they have never been more important than with regard to nursing homes.
Like most of our colleagues in the Dáil, I have been flooded with queries relating to nursing homes over my time as a public representative. I appreciate the level of worry being felt by older people in Ireland about their future. There is no denying that the current nursing home system is far from perfect, as there is an abundance of private beds and a shortage of public beds. The associated cost of care depends on whether a patient is public or private and the availability of a suitable bed.
Reflecting on it, I realise the current system is an ad hoc collection of various local schemes, with varying degrees of subvention available depending on a person's circumstance and location. This inconsistency means there is little transparency and much confusion. It is impossible to determine the needs of patients and therefore no consistent information exists which would allow authorities to allocate particular beds to those with the greatest need.
Another consideration and a serious contributing factor to the need for this legislation is the growing number of older people relying on the State. The implications of this trend go across the board from social welfare to pensions and finally to nursing home provision. By 2036, the Government estimates that there will be an astonishing 1.1 million people over the age of 65, representing 22% of the population. One can imagine the cost of providing care for these people, especially under the existing scheme, where the State pays for a large proportion of the both private and public care. A fact which must be emphasised now is that the State will still fund the largest part of the case costs overall and that individuals are being asked to pay only a small contribution where they are able to.
The current nursing home provisions are the product of years of alterations and a failure on the part of successive Governments to grasp the system by the neck and shake some sense of consistency into it. What should be an easy and compassionate process is reduced to an overly complex, stressful and ultimately expensive ordeal. The Minister, Deputy Mary Harney, and her Department have addressed these difficulties and kept them to the forefront of their minds when penning the new legislation. The main selling point of the Bill is its simplicity, as it promotes transparency and equality. All those availing of the measures contained within will pay an identical proportion of their estate for their care. The fair deal is easy to understand and it will supersede the existing subvention scheme. Nobody who cannot afford it should be expected to foot the entire bill for their nursing home care, yet this is the aim of the current subvention system.
Unfortunately, the State cannot afford to fully pay for the care of the elderly. This issue is undoubtedly on the forefront of any older person's mind as they enter into a nursing home. I can only imagine their fears in terms of whether they are eligible for subvention or if they or their family can pay the rest of the bill. They will not want to be a burden to their family and may wonder what will happen if they cannot pay the bill. We frequently hear such concerns from our own family or neighbours. Such people would also wonder who will take care of them.
With the fair deal scheme, such questions are answered. Under the new scheme, an individual will make a financial contribution to care based on income and there is no distinction based on age. Their families and partners will not be liable for the expense of the care and once it is decided to apply to the new scheme, a care needs assessment will be carried out. The assessment includes an evaluation of patients' needs, including whether they can dress, feed and bathe themselves unaided, as well as their ability to communicate. Once a person's need is established, a means test will be carried out by the HSE and the individual's financial contribution assessed. The eventual figure arrived at will be a combination of 80% of a person's assessable income — their pension perhaps — per annum, along with 5% of their assets, possibly their savings over a year. There is a disregard set at €36,000 for individuals and €72,000 for couples, after which the 5% will apply. If the older person's assets include land or property, this element of their contribution can be deferred until after their death, and can be collected from their estate.
The 5% contribution will be applied per year for the first three years and, importantly, will be capped at 15%. That is an important issue. In the case of couples, this will be capped at 7.5%, where one person remains in the home. If a partner or other dependants remain living in the home, payment can be further deferred. If the individual in question is unable to make the decision to go into a nursing home, then he or she can be appointed with the approval of two medical professionals. In these cases, an application must be made to the local circuit court.
There is a certain level of confusion over whether, under the scheme, the State will move to take a person's house from the family after their death. This is not the case. If the deferred contribution option is chosen, the most the State will ever get from an estate is 15%. There is also a perception that this percentage could be increased, but it cannot be. It is capped at 15% for an individual and 7.5% per couple, where one partner remains in the home. While there has been confusion about it, we must stress that fact, which should put many people's minds at ease.
The new scheme provided for in this legislation will be implemented by the HSE with the assistance of the National Treatment Purchase Fund. Whilst the HSE is to be responsible for the care needs and financial assessments and then the provision of information on the available suitable home, the National Treatment Purchase Fund will be the agency to negotiate the price of beds. The price of care will then relate to the needs of the patient, with higher prices charged to those who need more care, which is in line with the equitable nature of the proposed legislation. It is worth noting that same-sex relationships and co-habiting couples are viewed as having equal rights under the scheme to those who are married.
The new scheme will make long-term care more affordable. It will remove anxiety thus providing older people with peace of mind. It will ensure that the same level of State support is available to everyone, whether they are public or private patients.
I look forward to debating subsequent Stages of this legislation, which I hope will have a quick passage through the House. As public representatives, we have all heard the concerns of those affected by the need for nursing home care. I hope all sides of the House will support the Bill expeditiously.
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?
I agree with the broad thrust of the Bill, but several key points must be addressed on Committee Stage. First, we must ensure a cap on the principal private residence and other assets. Second, the allowance of €36,000 or €72,000 should be index-linked so that people are not penalised if their assets increase in value. Third, it is important that the lower market rate in the CPI be applied to repayments. Fourth, proper funding should be made available to ensure that the scheme can operate.