Carry on nurse!
SI 618 of 2023, amending the Nursing Homes Support Scheme Act 2009, came into effect on 1 February. Elaine Byrne carries out a thorough examination of the Fair Deal Scheme in light of this amendment
As a society, we are living longer, and many of us will end up knocking on the doors of nursing homes to be cared for in our final years. As solicitors, it is helpful to be familiar with the law surrounding the application process for nursing-home care, payment for care, and also, on death, the impact of having been in a nursing home on the administration of estates.
The most recent amendment to the law in this area came into effect on 1 February, namely the Nursing Homes Support Scheme Act 2009 (Modification of Assessment of Eligible Rental Income) Order 2023. With this in mind, now is an opportune time to examine the Fair Deal Scheme.
The key piece of legislation is the Nursing Home Support Scheme Act 2009, which commenced on 27 October 2009.
Prior to this, we had the concept of subvention and public and private nursing homes.
The act comprises nine parts. Part 1 is headed ‘Preliminary and general’. Of interest is section 4, which provides a unique definition of ‘couples’, different to that provided for in other legislation – including the Civil Partnership and Certain Rights and Obligations of Cohabitants Act.
For the purposes of the act, a ‘couple’ means “two persons married to each other, a man and woman who are not married to each other but are cohabiting as husband and wife, or two persons of the same sex who are cohabiting in domestic circumstances comparable to that of a man and woman who are not married to each other but are cohabiting as husband and wife … for period of not less than three years immediately preceding the date of making an application for State support”
State support
Part 2 of the act is headed ‘Establishment of scheme and application for State support’. There are potentially four steps in any application for nursing-home support/the Fair Deal Scheme.
The first of these steps is to provide for a care-needs assessment in accordance with section 7. If the applicant is found to need nursing-home care, an application can thereafter be made for State support. This is where we, as solicitors, are often contacted.
The applicant should compile a note of assets, remembering that, if the applicant is a member of a couple, all assets in the names of the applicant and the other member of the couple should be disclosed.
It may be useful to remind any client of section 9(5) of the act, which provides that “any person who knowingly or recklessly gives the executive information which is false or misleading in a material particular in, with, or in connection with an application for State support is guilty of an offence”. The applicant will also need to provide details of income.
Sections 10 to 14, together with the schedules, as referred to, look at the financial assessment of income and means:
- Assessment of income – 80% of the applicant’s assessable income is given as a contribution towards the cost of care. A member of a couple will pay 40% of the combined assessable income. From 1 February 2024, the entire income derived from rental of a principal private residence shall not be taken into account.
- Assessment of assets – assets are taken into account at the rate of 7.5%. The first €36,000 of means is exempt from the assessment in the case of a single person. A member of a couple will pay 3.75% of the combined assets, with the first €72,000 being exempt from the assessment.
Remember:
- The principal private residence is taken into account for a maximum of three years (three-year cap),
- The three-year cap has been extended to the proceeds from the sale of the family home,
- Any assets transferred in the five years before the date of the first application are included in the financial assessment, and
- The three-year cap can apply to a family farm/business.
Nursing-home loan
Part 3 of the act is headed ‘Ancillary State support’, known more commonly as the ‘nursing-home loan’. Paying for care can be deferred until after the applicant is deceased, using assets to secure the loan.
Remember:
- After the death of the person in care, the loan must be repaid within 12 months to the Revenue Commissioners,
- If the property is sold or transferred when a person is still in care, the loan must be repaid within six months of the date of sale or transfer,
- If the loan is not repaid within the time above, interest will be applied – in case of death, interest will start from the date of death,
- The person who is responsible for repayment of the nursing-home loan to the Revenue Commissioners is called the ‘relevant accountable person’; the personal representative of the deceased person or a person who inherits or has an interest in the property can also be held accountable,
- An application can be made for deferral of the nursing-home loan.
Enduring power of attorney
Part 4 of the act is headed ‘Care representative’. This role has been removed since the commencement of the Assisted Decision Making Capacity Act 2015.
Going back to Elizabeth (see 'Focal Point' below), if she needs to apply for a loan and she lacks capacity, her solicitor should, in the first instance, establish whether she made an ‘enduring power of attorney’.
If no such power of attorney is in place, an application can be made to the Circuit Court to apply to have a decision-making representative appointed in accordance with part 5 of the 2015 act.
The loan is applied for and is thereafter registered as a charge against the property.
Parts 5 to 9 of the 2009 act refer to ‘Notification of specified matters’, ‘Joint ownership’, ‘Reviews and appeals’, ‘Charges in respect of care services’, and ‘Miscellaneous’.
Having regard to the situation post-death and when acting for a legal personal representative, we should bear in mind part 5, section 27, which obliges the legal personal representative to provide a schedule of assets (SA2 and notice of acknowledgement) to the HSE. The estate should be retained until clearance is received.
This correspondence should be emailed to the HSE, Tullamore Office, at email: nhsssoa@hse.ie. Additionally, if there is a loan, the Relevant Events Section should be contacted at the same email or at fairdealqueries@hse.ie.
Moving away from the 2009 act, there are some other matters that might crop up for legal practitioners:
- Estate planning and, in particular, section 47 of the Succession Act 1965, which provides that: “Where a person … by his will disposes of, an interest in property, which at the time of his death is charged with the payment of money … and the deceased person has not by will, deed or other document signified a contrary or other intention, the interest so charged shall, as between the different persons claiming through the deceased person, be primarily liable for the payment of the charge; and every part of the said interest, according to its value, shall bear a proportionate part of the charge on the whole thereof.”
- Pursuant to the 2015 act, a decision-making representative is obliged to submit a report to the Director of the Decision Support Service (section 46), while section 75 provides for a similar obligation for attorneys. This may, in the administration of estates, be of benefit to the representative/attorney in explaining to beneficiaries where their inheritance has gone!
- Very often, a client will transfer property to another, subject to a right of maintenance and support.
For the latter point, the remarks of Ms Justice Whelan in the recent Court of Appeal judgment in Reidy v Bank of Ireland are of interest, where emphasis was placed on the right of maintenance and support being limited to the right while at home, and not extending to a nursing home: “I am satisfied that the word ‘therein’ was intended to confine the benefit of the obligation to maintain and support the widow to be limited and, in particular, that the obligation would not be enforceable in circumstances where the widow came to reside in a nursing home.”
No doubt, there will be further changes and updates to this area of the law. One thing is for sure, nursing-home care will always be with us, so it is important for us as solicitors to keep abreast of developments.
Elaine Byrne is a solicitor and principal at Elaine Byrne Solicitors, Co Meath. She is a member of the Law Society’s Probate, Administration and Trusts and Taxation Committees.
Focal point
EXAMPLE 1: ELIZABETH
|
ASSET
|
VALUE €
|
|
Principal private residence in Co Westmeath
|
300,000
|
|
Holiday home in Co Donegal
|
250,000
|
|
Shares and equities
|
100,000
|
|
Savings
|
80,000
|
|
Total
|
730,000
|
|
CALCULATION OF CONTRIBUTION TO CARE
|
€
|
|
Total assets
|
730,000
|
|
Deduction (single person)
|
36,000
|
|
=
|
694,000
|
|
At 7.5%
|
52,050
|
|
/52
|
1,000.96
|
Elizabeth will pay €1,000.96 per week towards the cost of her care. She will also contribute 80% of her assessable income. The weekly cost of care with the nursing home is €1,500 per week, so if there is any shortfall, the State will pay the balance.
Since 20 October 2021, the three-year cap can, in certain circumstances, also extend to a family farm or business (see sections 14A to 14N of the act).
EXAMPLE 2: JOHN
John is going to a nursing home and owns a 200-acre farm in Co Meath. John’s solicitor tells him that he can apply for a three-year cap regarding his farm and must satisfy three conditions:
1) John must apply to the HSE to appoint his family successor, who will commit to running the farm for at least six years,
2) The farm must have been actively run by John or his partner or his proposed family successor for at least three of the last five years,
3) A charge in favour of the HSE will be placed on the farm.
John advises that his son Tadhg is farming. John completes part 6 of the Fair Deal application form and submits it with vouching documentation and a statutory declaration. Tadhg also completes a statutory declaration. A charge will be registered against the farm.
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