“My mother kept one-third of our family farm in her name when it was transferred to me and I have been farming it ever since. She now needs nursing home care and I fear losing it under the Fair Deal Scheme. Can you explain how the scheme works?”
The Fair Deal Scheme has been topical recently given that the Rural Independent Group successfully brought a motion calling for the immediate reform of the Fair Deal Scheme earlier this year.
Furthermore, the IFA, most notably Maura Canning of the Farm Family Committee, has been lobbying for certain changes to remove the discrimination against small businesses and family farms and it is hoped that some measure of reform will be introduced in this year’s budget in October.
The average cost of care in a private nursing home is approximately €1,000 per week. The weekly cost of care for individual public, private and voluntary nursing homes is published on the HSE website. Unless a farmer can afford to pay for this themselves, they will need to look for State support under the Fair Deal Scheme.
The Nursing Home Support Scheme Act 2009 introduced the Fair Deal Scheme, which provides financial support for a person who requires long-term residential care.
There are two steps involved in an application to the Fair Deal Scheme:
A care needs assessment, which determines whether or not a person needs care services. A financial assessment determines the level of financial support and the farmer’s contribution to the cost of care.Care need assessment
The act provides that there must be an evaluation of a person’s ability to carry out the activities of daily living which would include an assessment of ability to bathe unaided, to feed unaided to dress unaided, ability to communicate, cognitive ability, mobility, etc.
Financial assessment
There are two types of financial support provided for in the 2009 act:
State support, which means a payment made by the HSE to assist a farmer in meeting the cost of the nursing home. Ancillary State support (nursing home loan), which means the HSE gives a loan to the farmer to make up the balance of the cost of care.Nursing home loan
The financial assessment will work out the farmer’s contribution to the cost of care. The HSE will then make up the balance, ie the State support. The farmer will contribute 80% of their assessable income (eg old age pension, rent from leasing out land, etc) and 7.5% of the value of any assets per annum. Assets include any assets transferred in the five years before the first application for the Fair Deal Scheme. The first €36,000 of the farmer’s assets or €72,000 in the case of a couple will not count in the financial assessment.
Where the farmer’s assets include land and property so that they do not have the cash equivalent to pay their portion of the cost of the nursing home, the 7.5% contribution based on the assets may be deferred and collected from the farmer’s estate at a later date. This is known as the Nursing Home Loan. This will be collected on the death of the farmer and will be a debt owing from the farmer’s estate.
If there is not enough cash under a will to pay this debt, it may be necessary to sell some of the land to pay back the debt owed to the HSE.
The Revenue Commissioners are responsible for the collection of the monies advanced under the Nursing Home Loan and the monies must be repaid with one year of the death of the farmer.
However, if the farmer’s spouse is still living in the house and does not own any other house, a deferral of the repayment of the Nursing Home Loan may be applied for. The deferral must be applied for within three months of the death of the farmer. If a spouse is successful with the application for a deferral, the Nursing Home Loan will become payable when the farmer’s spouse dies.
Three-year cap on value of assets
The farmer’s principal private residence will only be included in the financial assessment for the first three years. This means that the farmer will pay a 7.5% contribution each year based on their principal residence for a maximum of three years. This is known as the three-year cap.
It is important to note that at present there is no three-year cap on farms or business assets except in the case where the farmer/business owner becomes ill or disabled suddenly and there is a family successor identified. The successor must be a relative of the farmer and regularly and consistently applies a portion of his or her working day in the farm.
Thus if a farmer has leased out the land they own when they apply for the Nursing Home Loan, the three-year cap does not apply.
Equally, if a farmer’s health deteriorated over a period of time, the cap does not apply. For the three-year cap to apply, there must be a sudden illness preventing them from continuing farming, such as a stroke or heart attack.
The Fair Deal Scheme can have serious implications for the viability of a family farm for the next generation.
Thus, farming parents should ensure that they are properly informed so as to protect those assets in the event that they would require nursing home care in the future.
Read more
Fair Deal reform moving closer
'I would be better off if I had nothing'
Farm tax - putting the power in your hands
€25,000 tax credit available for farm transfers
“My mother kept one-third of our family farm in her name when it was transferred to me and I have been farming it ever since. She now needs nursing home care and I fear losing it under the Fair Deal Scheme. Can you explain how the scheme works?”
The Fair Deal Scheme has been topical recently given that the Rural Independent Group successfully brought a motion calling for the immediate reform of the Fair Deal Scheme earlier this year.
Furthermore, the IFA, most notably Maura Canning of the Farm Family Committee, has been lobbying for certain changes to remove the discrimination against small businesses and family farms and it is hoped that some measure of reform will be introduced in this year’s budget in October.
The average cost of care in a private nursing home is approximately €1,000 per week. The weekly cost of care for individual public, private and voluntary nursing homes is published on the HSE website. Unless a farmer can afford to pay for this themselves, they will need to look for State support under the Fair Deal Scheme.
The Nursing Home Support Scheme Act 2009 introduced the Fair Deal Scheme, which provides financial support for a person who requires long-term residential care.
There are two steps involved in an application to the Fair Deal Scheme:
A care needs assessment, which determines whether or not a person needs care services. A financial assessment determines the level of financial support and the farmer’s contribution to the cost of care.Care need assessment
The act provides that there must be an evaluation of a person’s ability to carry out the activities of daily living which would include an assessment of ability to bathe unaided, to feed unaided to dress unaided, ability to communicate, cognitive ability, mobility, etc.
Financial assessment
There are two types of financial support provided for in the 2009 act:
State support, which means a payment made by the HSE to assist a farmer in meeting the cost of the nursing home. Ancillary State support (nursing home loan), which means the HSE gives a loan to the farmer to make up the balance of the cost of care.Nursing home loan
The financial assessment will work out the farmer’s contribution to the cost of care. The HSE will then make up the balance, ie the State support. The farmer will contribute 80% of their assessable income (eg old age pension, rent from leasing out land, etc) and 7.5% of the value of any assets per annum. Assets include any assets transferred in the five years before the first application for the Fair Deal Scheme. The first €36,000 of the farmer’s assets or €72,000 in the case of a couple will not count in the financial assessment.
Where the farmer’s assets include land and property so that they do not have the cash equivalent to pay their portion of the cost of the nursing home, the 7.5% contribution based on the assets may be deferred and collected from the farmer’s estate at a later date. This is known as the Nursing Home Loan. This will be collected on the death of the farmer and will be a debt owing from the farmer’s estate.
If there is not enough cash under a will to pay this debt, it may be necessary to sell some of the land to pay back the debt owed to the HSE.
The Revenue Commissioners are responsible for the collection of the monies advanced under the Nursing Home Loan and the monies must be repaid with one year of the death of the farmer.
However, if the farmer’s spouse is still living in the house and does not own any other house, a deferral of the repayment of the Nursing Home Loan may be applied for. The deferral must be applied for within three months of the death of the farmer. If a spouse is successful with the application for a deferral, the Nursing Home Loan will become payable when the farmer’s spouse dies.
Three-year cap on value of assets
The farmer’s principal private residence will only be included in the financial assessment for the first three years. This means that the farmer will pay a 7.5% contribution each year based on their principal residence for a maximum of three years. This is known as the three-year cap.
It is important to note that at present there is no three-year cap on farms or business assets except in the case where the farmer/business owner becomes ill or disabled suddenly and there is a family successor identified. The successor must be a relative of the farmer and regularly and consistently applies a portion of his or her working day in the farm.
Thus if a farmer has leased out the land they own when they apply for the Nursing Home Loan, the three-year cap does not apply.
Equally, if a farmer’s health deteriorated over a period of time, the cap does not apply. For the three-year cap to apply, there must be a sudden illness preventing them from continuing farming, such as a stroke or heart attack.
The Fair Deal Scheme can have serious implications for the viability of a family farm for the next generation.
Thus, farming parents should ensure that they are properly informed so as to protect those assets in the event that they would require nursing home care in the future.
Read more
Fair Deal reform moving closer
'I would be better off if I had nothing'
Farm tax - putting the power in your hands
€25,000 tax credit available for farm transfers
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