Q&A: Key changes to scheme for family businesses and farms now facing lengthy delays –

What is Fair Deal ?

Fair Deal is the shorthand for the ‘The Nursing Homes Support Scheme’, which provides financial help for people who need long-term nursing home care.

It is operated by the HSE. The scheme covers private, voluntary and public nursing homes.

What sort of financial help does it provide?

An assessment of all your income and assets is carried out in order to work out what your contribution to your care will be.

There are two elements to your contribution. You will pay 80pc of your income (eg, a pension) and 7.5pc of the value of your assets every year towards your care.

Is the family home included in my assets under Fair Deal?

A person’s principle residence will be counted as an asset, but only for the first three years. This is known as the 22.5pc, or ‘three-year’ cap.

Why are changes planned for farms and small businesses?

The Government has been aware for some time that the way Fair Deal is applied to family businesses is a serious impediment when it comes to passing it to the next generation.

Because the three-year cap does not apply, the 7.5pc charge on assets is applied annually for as long as the person stays in a nursing home. This means that if somebody were to stay in care for 10 years, three-quarters of the business’s value would be owed to the State.

What changes are being proposed?

Minister Jim Daly has already secured Cabinet backing to apply the three-year cap to farms and businesses if they continue to be operated by a close relative.

So what’s the problem?

The minister’s officials are in the process of drafting the relevant legislation but are concerned it may need to be more technical than previously believed.

They have identified a number of ‘what if’ scenarios. These focus on how a succession works. The assumption that the relative working in the business or on the farm will actually be left all of the assets may not always prove accurate. As a result there are fears that disputes between family members could need to be resolved in court.

What is being done to resolve the issue?

The minister is looking at a number of safeguards. There may be strong succession rules put in place in order for a person to qualify for the Fair Deal Scheme.

How long will the overhaul be delayed?

It was expected there would be a formal announcement last month. Sources told the Irish Independent the delays mean legislation is unlikely to be debated in the Dáil this year. However, they remained confident the issues can be resolved so the Heads of Bill can go to Cabinet by the end of the year. There is broad political support for some form of change.

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