Seán Canney (Galway East, Independent)
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625. To ask the Minister for Health if he is aware that a person who has entered long-term care and who has agreed to rent out their home is assessed on the double for this income by having the rental income assessed and also the notional income by having the value of the house assessed; and if he will make a statement on the matter. [22550/23]

Mary Butler (Waterford, Fianna Fail)
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The Nursing Home Support Scheme (NHSS), commonly referred to as 'Fair Deal', is a system of financial support for people who require long-term residential care. The primary legislation underpinning the NHSS is the Nursing Home Support Scheme Act 2009. Participants in the NHSS 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.

Participants within the NHSS contribute up to 80% of their income (40% if part of a couple) and 7.5% per annum of the value of their assets (3.75% if part of a couple). The first €36,000 (€72,000 if part of a couple) is excluded from assessment. The value of a person's principal residence is only assessed for contributions for their first three years on the scheme.

Assets assessed include cash assets as well as non-cash assets such as the principal private residence, other property and land, including farmland.

For the purposes of financial assessment, income includes:

- Earnings, including income from farming or business activities

- Pension income

- Social welfare benefits/allowances

- Rental income

- Income from holding an office or directorship

- Income from fees, commissions, dividends or interest

- Any income which you have deprived yourself of in the five years prior to application

Transferred assets and income, defined as assets or income transferred to another person up to five years before a person's application to the scheme, are also assessed.

Within the NHSS, the asset value of a resident's home, known in the Scheme as the "principal residence", is also assessed for 3 years, with 7.5% of its value going towards the cost of care (3.75% in the case of a couple). After a person has been in care for 3 years , the value of this property is no longer assessed. This is called the 3 year cap. In practice, this generally reduces the nursing home fees of those maintaining their home, from year four onwards. The Nursing Homes Support Scheme Amendment Act (2021) now extends the 3-year cap to cover the proceeds of sale, so that a person will be able to sell their home without incurring additional fees from their fourth year in long-term residential care onwards. This applies even if the home is sold before 3 years in care; the proceeds of sale will be assessed up to the 3-year point, but excluded from assessment after that.

Rental

Effective from 1 November 2022, the amount of rental income that nursing home residents can retain under the Fair Deal from renting their principle private residence increased from 20% to 60%.

Prior to this change being implemented, participants in the Fair Deal scheme were able to rent out their homes or other assets, however rental income was subject to assessment at 80% like all other income (such as pension income).

Recognising that this may act as a disincentive against renting out a property, the Government approved a policy change to the Nursing Homes Support Scheme, “Fair Deal”, to remove a disincentive for applicants to the Scheme to rent out their principal residence after they have entered long term residential care. The rate of assessment for rental income from a principal residence is reduced from 80% to 40%. This means that for someone renting out their principal residence, they retain 60% of the income accrued from that rental and 40% is assessed under Fair Deal

Under the terms of the amended legislation, this policy change will be reviewed after six months of operation at the end of April 2023, with the intention for further amendment after that point if necessary and examining any unintended consequences and potential safeguarding issues. To date, 30 properties have been rented out since this policy change last November.

It should be noted that rental income accrued from property that is not a principal private residence will continue to be assessed at 80%.

This policy change addresses the commitments made under Housing For All Action 19.8. The change was made through a Committee-Stage amendment to the Department of Housing, Local Government and Heritage’s Regulation of Providers of Building Works and Building Control (Amendment) Bill 2022 which is in operation as of 1 November.