The Nursing Home Support Scheme also known as the Fair Deal scheme provides financial support to people who need long term nursing home care. The Scheme is operated by the HSE whereby a person can apply for financial support to help pay for the costs of care in a Nursing Home through the Fair Deal scheme.

Pursuant to the Fair Deal scheme people contribute 80% of their income towards the costs of their care and 7.5% of the value of any asset every year. The 7.5% annual contribution from the asset value, if the asset is the family home, is charged for 3 years only. However, this provision does not apply to non-home assets such as farms and businesses.

 However, on 11 June 2019 the Cabinet approved changes to the Fair Deal scheme for farms and small businesses. The Minister for Health Simon Harris and Minister for State for Older People, Jim Daly, got Cabinet approval for draft legislation to extend the 3 year cap to families in relation to their farms and businesses. Minister Harris said “this will make a substantial difference and finally remove the discrimination many of these families face under the existing law”.

In order to qualify the farmer or business owner, their partner or nominated family successor must have worked the farm or business for 3 out of the previous 5 years. 

The proposed change will extend the 3 year cap under the Fair Deal scheme to farms and businesses where a family successor continues to operate a farm or a business for 6 years. The extension of the cap will only apply where the family successor continues to farm the land or operates the business for 6 years. The successor must supply a statutory declaration that they will work the farm or business for at least the next 6 years after the person enters Nursing Home Care.  

This undertaking is quite substantial in that it includes a legal undertaking that the successor will repay the full amount of the state subsidy if they fail to complete the six-year period.

The successor must consent to a charge being applied on the land or property if they break the terms of the contract. The successor will not be required to work exclusively on the farm or in the business but they will need to work at least 50% of their working week on the farm or in the business. 

The 6 year rule could limit the successors ability to secure an income from leasing the land or assets of the business. However, flexibility will be applied in cases where the nominated successor is unable to continue working due to illness or death and in those circumstances the family will be able to select a new successor. 

It appears that the main policy objective in bringing about these changes to the Fair Deal scheme is to protect the viability of family farms and businesses where there is a clear intention that it will be passed on to the next generation.

It is expected that it will be towards the end of this year before the necessary legislation to implement the changes will be enacted. The benefits will be applied retrospectively to anyone already in care or who enters a nursing home in the coming months. Unfortunately, individuals will not be able to recoup contributions they have already made beyond the 3 year cap period.

It is understood that the change to the Fair Deal scheme will cost the state upwards to €10 million per annum when it comes in to force.

The changes to the Fair Deal scheme have been met with positive reaction as it has been argued that the scheme, in its current format, was forcing a person to pay a portion of the farm/business’ value indefinitely and this was affecting the ability of young people to take over the family business. 

However, the responsibility of the successor to work on the farm on a consistent and regular basis for 6 years and to ensure that a substantial part of his or her working week is applied to the farming of the farm or working in the family business might be a heavy burden for any future successor.

Breda Sheahan is an Associate with FitzGerald Legal & Advisory.

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