Seanad debates

Wednesday, 17 June 2009

9:00 am

Photo of Pat MoylanPat Moylan (Fianna Fail)
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Amendment No. 35 is out of order as there is a potential charge on Revenue.

Amendment No. 35 not moved.

Photo of Pat MoylanPat Moylan (Fianna Fail)
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Amendments Nos. 36 and 37 are related and may be discussed together.

Photo of Frances FitzgeraldFrances Fitzgerald (Fine Gael)
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I move amendment No. 36:

In page 64, lines 38 to 47 and in page 65, lines 1 to 3, to delete paragraph 7.

Photo of Paul BradfordPaul Bradford (Fine Gael)
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I support the amendments. When the Bill was published, the initial response of most people was a general and guarded welcome to the proposal as it was felt it would put in place a system of care with a system of payment which was fair, reasonable, transparent and affordable to a reasonable extent. However, the fine print of the Bill was studied and in advance of the debate in the other House the issue came to light about the capping rule whereby the three-year cap would apply only to a private residence. This regulation will have a negative effect and will impact on many people such as farming families and those with small businesses, who instead of having a repayment charge of 15%, 5% per annum for a maximum of three years, could instead have a repayment of 25% to 50% at the time of a bill finally issuing.

I appreciate that in response to the concerns and the arguments put forward, there was some degree of relief granted in the other House by way of a slight change in the technicalities of the scheme and it would provide that in a small number of cases where illness occurred in a sudden fashion, the three-year ruling would again apply. However, I am speaking about the majority of cases in so far as farming families and those with small businesses are concerned, who would not enjoy the relief offered by the Minister of State in the amendment put forward in the other House.

I am asking the Minister of State to reflect on the possibility of changing this section and the calculations as they are determined in the legislation to ensure that the 5% per annum with the maximum of 15% charge would apply in all cases. If this suggestion was not accepted, many people, farming families and those with small businesses in particular, could end up facing massive charges against their estate and this would be unfair. I hope the Minister of State will try to meet us some way on this issue.

Photo of Frances FitzgeraldFrances Fitzgerald (Fine Gael)
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Senator Bradford has pointed out the anomaly and injustice. The Bill as drafted has serious implications for farmers and small business owners. While nobody will end up paying more than the cost of care they receive, the deferred charge in the case of the principal private residence is capped at 15%, 5% for three years, but there is no cap on the deferred charge and other fixed assets such as land, farm buildings, commercial and investment property and small businesses which may not be hugely profitable. The situation could emerge where a person with a very valuable residence would be relatively undercharged. The Bill as drafted does not take into account the sustainability of farms or small businesses and it gives preferential status to principal private residences. This is a concern and there is also concern about the impact of the deferred payment on the viability of farms and small businesses.

The Minister of State introduced some changes on Report and Final Stages in the other House to the cap on farms and small businesses, but Fine Gael does not believe that these address the problem adequately. The Bill states that the three-year cap will not apply unless the person has suffered a sudden illness which caused the person to require care services, but there is no definition of what is considered to be a sudden illness. It may be that the illness is sudden but it may have been there for a long time and the person has only suddenly become aware of it. This issue is unclear in the Bill. It was a relatively late amendment from the Minister of State but I ask her to clarify that matter. The potential cost to people is significant.

The Bill requires the person to prove that a substantial part of the working day of the person requiring care services or his or her partner was regularly and consistently applied to farming the farm or carrying on the relevant business until the onset of the sudden illness or disability. This is a very strict criterion given the current situation in farming, with people sometimes working on farms and in the community. This is a very rigorous assessment.

We have concerns about the impact this will have, the cost to families and the viability of small farms and businesses, given the implications of the legislation and the lack of a cap on these assets.

Photo of Áine BradyÁine Brady (Minister of State with special responsibility for Older People and Health Promotion, Department of Health and Children; Minister of State, Department of Environment, Heritage and Local Government; Minister of State, Department of Social and Family Affairs; Kildare North, Fianna Fail)
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The Senator is proposing to delete paragraphs which I introduced on Report Stage in the Dáil. These paragraphs were introduced to address concerns expressed by a number of Deputies on both Second and Committee Stages about the treatment of farms in the Bill. The effect of the amendments is to extend the three-year cap to farms and businesses in certain circumstances. The amendments provide that a farm or business shall be taken into account within the financial assessment for three years only in the following circumstances: where the person has suffered a sudden illness or disability which causes him or her to require long-term residential care; where the person or his or her partner was actively engaged in the daily management of the farm or relevant business up to the time of the sudden illness or disability; and where a family successor certifies that he or she will continue the management of the farm or relevant business. The policy intention underpinning the paragraphs is to safeguard the financial sustainability of family farms and businesses by ensuring that contributions from such assets are capped and fully quantifiable. As such, removal of these paragraphs would be detrimental to applicants to the scheme. I wish to highlight that the measures have been welcomed by the Irish Farmers Association. We envisage the majority of people would have transferred their farms or businesses more than five years before applying for the scheme, especially given that farming representative groups support early succession of farms. In this case, the farm or business will not be taken into account and no contributions will be payable.

The new measures I introduced on Report Stage in the Dáil address the situation where a person would not have had the opportunity to transfer such assets. For these reasons, I cannot accept amendments Nos. 36 and 37.

Photo of Paul BradfordPaul Bradford (Fine Gael)
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The Minister of State said farming organisations have welcomed her proposed changes. Members of the Oireachtas take note of what representative groups say. It is my clear understanding that farming organisations welcomed her Report Stage amendments as a very small step in the right direction. They do not deal with the concerns of the 98% of farming families or small business owners who will not fall ill suddenly and have to take up places in a residential nursing home.

What was the thinking behind not having a cap? The Bill has been welcomed on the basis that care must be paid for and that a reasonable balance is struck by putting a 5% per annum charge, with a maximum 15% possible charge, on a person's private residence. Why was it decided that the 5% charge would be limitless as far as enterprise, business and agriculture was concerned? The Minister of State's response on Report Stage in the Dáil was to alleviate, to a very small degree, the difficulties caused by the original wording. When Deputies and farming organisations pointed out this anomaly, there was a reasonable degree of acceptance by the Minister for Health and Children that the matter needed to be addressed. The Government's response to the issue is inadequate. Nevertheless, I would like to know the thinking behind the idea of saying 5% of all assets could be charged with no limit on the size of the final bill.

I am not impressed by the suggestion that the threat of a huge nursing home charge will encourage farmers to transfer their farms at a younger age. While we all support the transfer of land to young farmers, everyone has a constitutional right to private property and we should not force people to transfer their assets. The Bill attempts to do that. Social welfare legislation uses the phrase, "for pension purposes", with regard to the transfer of assets to qualify for a means-tested payment. An asset which was transferred in the previous two to three years is taken into account when means are assessed. This Bill attempts to chart a new direction. It gives every possible wrong signal and it should be reversed. The Report Stage amendments deal with a tiny fraction of what could become a substantial problem.

When discussing an earlier section, I referred to the significant number of people who are afraid to grow old because of the financial concerns associated with doing so. This section will cause farming families, shopkeepers, publicans and owners of small businesses to fear that by the time they pass on to their eternal reward their asset will have a 100% charge due to the State. That should not result from this legislation. I hope the Minister of State will examine this matter and try to make genuine progress as opposed to the baby step which was the Report Stage amendment.

Photo of Frances FitzgeraldFrances Fitzgerald (Fine Gael)
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I agree with Senator Bradford. The Government has taken a very small step to address the serious issue of farm families confronted with having to pay for nursing home care. Such families could be exposed to huge costs and forced to sell the family farm to pay for nursing home care. A person who spends three years in a nursing home costing €800 per week will pay more than €124,000, which is 80% of disposable income. Despite the Government's amendment, the legislation has an unfair impact on such farming families or owners of small businesses. It could have serious implications for the ability of future generations to carry on the farming tradition.

Senator Bradford asked where the idea of not having a ceiling on charges on farming assets came from. Why was this approach taken to other assets when the limit on residences was clearly set at 15%? The Minister of State has not answered that question.

The question of transfer of ownership is of great relevance to farming families. The transfer of a family farm must have taken place at least five years before the time of the assessment of means to have it excluded from the assets for the purpose of the deferred charge. This presents difficulties. The Minister of State referred to the support of the IFA. That organisation's chief economist, Mr. Con Lucey, showed that where the value of the farm asset is excluded, the individual contributes 33% of the total cost of care and the State contributes 67% but where the farm asset is included, the individual carries 81% of the cost of care and the State carries 19%. That is not equitable. The five-year transfer rule will have serious implications for families and for the transfer of farms to a younger generation.

The amendments introduced on Report Stage in the Dáil do not address this serious issue. They go only a small way towards dealing with it. The interpretation of the sudden illness measure is far from clear.

Photo of Áine BradyÁine Brady (Minister of State with special responsibility for Older People and Health Promotion, Department of Health and Children; Minister of State, Department of Environment, Heritage and Local Government; Minister of State, Department of Social and Family Affairs; Kildare North, Fianna Fail)
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The measures are based on a proposal submitted to the Minister for Health and Children by the IFA. The 5% is consistent with the current subvention scheme. The interdepartmental working group on long-term care considered that this was a fair amount to contribute to long-term care. Bearing in mind that it is capped at the cost of the care, rich people may pay less than 5%. This measure gives owners of farms or businesses who have not had an opportunity to transfer their property to someone else an opportunity to cover the cost of their care at a capped cost of 5%.

Sudden illness and disability is not defined because it would be impossible to take account of all possible individual situations. As such, any definition could seem to exclude people who might otherwise benefit from these important measures.

10:00 am

Photo of Paul BradfordPaul Bradford (Fine Gael)
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I wish I could say I felt the Minister of State had a sympathetic understanding of our argument. I feel she does not appreciate or understand the issue.

I repeat my question, which was also asked by Senator Fitzgerald. What is the thinking behind this proposal? Before any applicant comes to occupy a nursing home bed, a financial assessment will have been made. The multimillionaires, be they captains of industry, huge landowners or even lottery winners, will not come within the system anyway because they will have been excluded by virtue of the earlier financial assessment. Every person who applies for and receives State support under this scheme will have already passed a type of means test so the super wealthy will have been excluded. That is not our concern. We have in mind the so-called ordinary people - a phrase I dislike - who might be the local shopkeeper, publican or farmer. I cannot understand how this idea of the 5% per annum, capped at 15%, does not apply to these people.

While the Minister referred to the farming organisations' request for particular changes, to which she acceded, she is absolutely aware that what the farming, business and other organisations sought was the application of the three-year rule. That is what we must try to bring about from the point of view of fairness and equity. Every applicant who is in receipt of support will have already jumped the hurdle with regard to the State's view of their cash, asset value and means. However, those successful applicants will be divided into two categories, the people who have a principal private residence which could be worth any amount and the people whose kingdom might consist of the old-fashioned cottage acre, which bizarrely would result in the 15% limit applying to the cottage and no limit applying to the acre. There will be such anomalies while this clause and thinking apply. We are not talking about the big stud farm owners but a person who might have just a cottage acre or a tiny shop. The Minister must reflect on this. If the legislation is about fairness and a fair deal, this is not fair or a fair deal.

Photo of Áine BradyÁine Brady (Minister of State with special responsibility for Older People and Health Promotion, Department of Health and Children; Minister of State, Department of Environment, Heritage and Local Government; Minister of State, Department of Social and Family Affairs; Kildare North, Fianna Fail)
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If I accept these amendments, there will be no cap because the Members proposed no alternative. The majority of people entering nursing homes are between 70 and 80 years of age and, as such, the majority of farms and businesses will have been transferred. These new measures will support people who enter at a younger age.

Question, "That the words proposed to be deleted stand", put and declared carried.

Amendment declared lost.

Photo of Frances FitzgeraldFrances Fitzgerald (Fine Gael)
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I move amendment No. 37:

In page 65, lines 4 to 16, to delete paragraph 8.

Question, "That the words proposed to be deleted stand", put and declared carried.

Amendment declared lost.

Question proposed: "That Schedule 1 be Schedule 1 to the Bill."

The Dail Divided:

For the motion: 21 (Martin Brady, Larry Butler, Ivor Callely, John Carty, Donie Cassidy, Maria Corrigan, Mark Daly, Geraldine Feeney, John Gerard Hanafin, Cecilia Keaveney, Terry Leyden, Marc MacSharry, Brian Ó Domhnaill, Francis O'Brien, Fiona O'Malley, Ned O'Sullivan, Ann Ormonde, Kieran Phelan, Jim Walsh, Mary White, Diarmuid Wilson)

Against the motion: 16 (Paul Bradford, Paddy Burke, Jerry Buttimer, Ciarán Cannon, Paudie Coffey, Paul Coghlan, Maurice Cummins, Paschal Donohoe, Frances Fitzgerald, Fidelma Healy Eames, Nicky McFadden, Rónán Mullen, David Norris, Eugene Regan, Shane Ross, Brendan Ryan)

Tellers: Tá, Senators Fiona O'Malley and Diarmuid Wilson; Níl, Senators Maurice Cummins and Nicky McFadden.

Question declared carried.

Question, "That Schedule 2 be Schedule 2 to the Bill", put and declared carried.

Question, "That the Title be the Title to the Bill", put and declared carried.

Bill reported without amendment.

Photo of Paddy BurkePaddy Burke (Fine Gael)
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When is it proposed to take Report Stage?

Photo of Donie CassidyDonie Cassidy (Fianna Fail)
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Next Wednesday.

Report Stage ordered for Wednesday, 24 June 2009.

Photo of Paddy BurkePaddy Burke (Fine Gael)
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When is it proposed to sit again?

Photo of Donie CassidyDonie Cassidy (Fianna Fail)
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Ag 10.30 maidin amárach.