Denis O'Donovan (Fianna Fail)
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I welcome the Minister of State, Deputy Jim Daly, to the House.

Colm Burke (Fine Gael)
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I welcome the Minister of State and congratulate him again. I wish him every success in his new role as Minister of State. I must deal with two people from west Cork this morning and I am sure it will make my job that much easier.

Denis O'Donovan (Fianna Fail)
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You should be so lucky.

Colm Burke (Fine Gael)
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The matter I wish to raise is the fair deal scheme and its current structure whereby someone admitted to a nursing home who is an owner would have that land taken into account in calculating the assessment of payment towards nursing home charges. I know of two cases. One is a very sad case as a person who owned land died and the land passed back to the mother; she is now in a nursing home. She transferred the land approximately one year before she went into the nursing home but the process takes into account any land transferred within five years. The person who inherited the land has paid the full whack of inheritance tax but was not entitled to agricultural relief. That person is also now paying the full whack for nursing home charges.

In the second case, the father died and the mother got 50% of the farm while the sons got the other 50%. She developed an illness where she had to be admitted to a nursing home. They are paying €2,500 per month in nursing home charges. There is no way the land is even earning that kind of money but they are required to pay that €2,500 per month. It is in this context I raise the matter.

I have an email from the Department of Health on this issue dated 28 June 2016, believe it or not. I understood there would be some reform in the matter. I know there was a proposal from the Irish Farmers Association to apply the same rules that concern agricultural relief - in other words, there would be a devaluing of land by 90% and taking into account full value of the dwelling house. I am not sure what progress has been made and it is in that context I have raised this morning's matter.

Jim Daly (Cork South West, Fine Gael)
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I thank the Senator for his continued interest, assistance and guidance. I look forward to working closely with him on the matter, one of many in the health area in which he has a particular expertise and interest. As I come to terms with getting on top of my brief, I look forward to working with the Senator more closely.

The nursing homes support scheme, NHSS, provides financial support towards the cost of long-term residential care services in nursing homes and ensures that long-term nursing home care is accessible to everyone assessed as needing it. Participants contribute to the cost of their care according to their means, while the State pays the balance of the cost. The scheme aims to ensure that long-term nursing home care is accessible and affordable for everyone and that people are cared for in the most appropriate settings.

Under the scheme, an applicant will contribute up to 80% of their assessable income and a maximum of 7.5% of the value of any assets per annum. The State will then pay the balance of the cost of care. It is Government policy, as the Senator is aware, to encourage orderly succession arrangements for farms, and this is also endorsed by farming organisations. The Revenue Commissioners have a number of schemes in place designed to protect the value of a transferred family farm, such as tax relief schemes relating to capital gains tax, capital acquisitions tax and stamp duty. In most cases, early succession arrangements in families should ensure that farm assets are transferred well in advance of five years before nursing home care is required, meaning that a levy on the farm asset is avoided entirely.

It is important to note that an applicant’s principal private residence will only be included in the financial assessment for the first three years of their time in care. This is known as the three-year cap. The scheme ensures that nobody will pay more than the actual cost of care and contains a number of important safeguards. For example, where an applicant’s assets include land and property held in the State, the contribution based on such assets may be deferred and collected from the estate. This is the optional loan element of the scheme. It is important to note that the scheme already contains provisions for the treatment of income generating assets such as farms. In an acknowledgment that unexpected health events can occur that prevent early succession arrangements, a farm or relevant business can also qualify for the three-year cap. This applies where the person has suffered a sudden illness or disability that causes them to need long-term nursing home care; the person or partner was actively engaged in the daily management of the farm until the time of the sudden illness or disability; and a family successor certifies that he or she will continue the management of the farm.

When the scheme commenced in 2009, a commitment was made that the scheme would be reviewed. The report of the review was published in July 2015. Arising out of that review, a number of key issues have been identified for more detailed consideration across Departments and agencies, including the treatment of business and farm assets for the purposes of the financial assessment element of the scheme. In a further acknowledgement of the importance of this issue, we have committed in the Programme for a Partnership Government to reviewing the scheme to remove any discrimination against small business and family farms. An interdepartmental and agency working group has been established to progress many of the recommendations contained in the review of the scheme, including the examination of the treatment of family farm and business assets. This examination is ongoing and at an advanced stage.It is important to remember the NHSS is largely underpinned by primary legislation and any changes to the scheme will require legislative implementation. A commitment has been made to prioritise and fast-track the examination of the treatment of family farms and business and the Department of Health will bring forward changes to the legislation to deal with the uncertainty that is being felt by many farming and business families in line with A Programme for a Partnership Government commitments.

Colm Burke (Fine Gael)
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The Minister of State touched on the point that in the case of sudden illness, the person comes in under the fair deal scheme. The case I was referring to is a case of Parkinson's disease, which, as he will be aware, is a gradual illness. In that case, the person is now being penalised. The person who is in the nursing home obviously cannot predetermine what illness he or she gets. The person is now being penalised because of having a particular type of illness because it was regarded in the assessment as a gradual illness rather than a sudden illness.

My second issue with the current position is that even if one does not give the agricultural relief that is available under the inheritance tax, it is for an indefinite duration that the payments are being made to the nursing homes. There is no three-year cut-off point whereas there is for everyone else. It is 7.5% of the assets, but for a maximum of three years. With farmers and businesses, there is no three-year rule. It is a severe penalty. It is in that context that the issue needs review.

In the other case to which I referred, where the person died with no will made, the property came back to the mother who was then admitted to a nursing home. The person who gets the farm is caught by inheritance tax and by the nursing home charges as well. It seems an extremely heavy penalty to have to pay.

Jim Daly (Cork South West, Fine Gael)
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I thank Senator Colm Burke. The Senator clearly has a commanding grasp of this issue and I look forward to further engagement with him on it. I share the Senator's fundamental concern. There is an issue. It has been well flagged but it has not been well addressed. That is how I would sum it up. Farming families - I come from a rural constituency and am familiar with that particular challenge - and indeed families with small businesses who have worked hard and have paid their contributions along the way to the State suffer a discriminatory practice where the three-year cap is not applied to their assets but it is applied in the case of those with a principal private residences. I want to see that anomaly addressed.

As the Senator will appreciate, I am only a week in the position but I met my officials yesterday on this issue and asked them to give me a briefing on it, which they did. On the back of that, I looked for the IFA to come in and meet me which, of course, it is more than willing to do. I understand negotiations have been ongoing with the IFA. I want to conclude those negotiations soon because the issue has dragged on too long and it needs to be addressed. As the Minister of State with responsibility for this issue, I am determined to address it forthwith and I look forward to doing that as quick as I can.