Áine Brady (Kildare North, Fianna Fail)

Amendment No. 12 stipulates that the cap would be set at 15% of the market value of the principal residence at the time of the original application for State support. I will set out why I consider that the approach provided for in the Bill, as it stands, is fairer and more favourable for applicants. The cap is applied after the first three years of care. In the case of a single person, the contribution payable is a maximum of 5% per annum, resulting in a total capped contribution of 15% if the person spends three or more years in care. In the case of a couple, the maximum contribution payable by each member is 2.5% per annum, resulting in a total capped contribution of 7.5%. The three-year cap for which we are providing acknowledges the circumstances of couples by limiting the contribution of each member to 7.5%. Moreover, by capping contributions by reference to a time period, it has been possible to extend the cap retrospectively in order that people currently in care can benefit from having their existing time in nursing home care taken into account. In a climate of declining property prices such as that we are experiencing a person can avail of the financial review mechanism provided for in the Bill to reduce the contribution payable on his or her principal residence in line with the declining value of the property in the second or third year. A straightforward 50% cap, based on the original valuation of the property, would not achieve this. While the Bill provides for the cessation of contributions after the first three years of care, it also takes account of the time value of money, in other words, inflation or deflation. This is fair, as the taxpayer is offering, in effect, an interest free loan under the scheme. This measure is also important from the perspective of financial sustainability, particularly in the light of the generous system of further deferral offered within the scheme. The system of further deferral could result in families deferring the repayment of contributions for 50 or 60 years if they wish to do so. In such circumstances, it is fair and just that the time value of money is acknowledged. For all these reasons, I do not propose to accept amendment No. 12.