"Fair Deal or Not"?

A lot of confusion still exists surrounding the Fair Deal Scheme, which became law on 27th October 2009 with the passing of the Nursing Home Support Scheme Act, 2009.

The Fair Deal Scheme relates to the operation of a new scheme of financial support for persons in need of long term residential care.

The new scheme has been brought in to replace the often troublesome subvention scheme.

The Fair Deal Scheme operates now as a “one stop shop” in effect, for people in need of long term residential care, whether they end up in public, or, private nursing homes.

The basic requirement is that each person must contribute up to 80% of their assessable income towards the costs of their care, with the balance being paid by the State. Each person must also then contribute, up to 5% of the value of any asset they own towards the costs of their care.

One of the major concerns which arose when this scheme was being adopted was the possibility of an elderly person having to sell their residence for the purposes of funding nursing home care.

The legislation avoids such a circumstance arising by enabling the person availing of the scheme to create a charge, or, mortgage in effect, on their property in favour of the State in order to avail of the scheme. This mortgage, or charge, only becomes payable upon the death of the person availing of the scheme.

In the case of an elderly couple living together, where one of them requires nursing home care, there is provision in the legislation to protect the person remaining at home from having the house sold over their head when their partner dies. In the normal scheme, when the person who availed of the Fair Deal Scheme, dies, the mortgage becomes payable upon a sale of the property. If a widow, or, a widower, remains in the property, then, they can apply for a deferral of the payment until their own death.

The contribution in relation to the mortgage or charge in favour of the State is a maximum of 15% of the value of the asset payable upon death irrespective of the length of long term care prior to death. It operates on the basis of 5% per year for the first 3 years and does not increase after the 3 year period.

The application process is quite complex and detailed. An application form must be submitted to the nursing home support office for assessment.

The HSE will then carry out a care needs assessment and a financial assessment. One of the difficulties which arises is in relation to a person who has lost their mental faculty. If that person has not executed an Enduring Power of Attorney (o/w known as a Living Will) then their next of kin must apply to the Circuit Court to be appointed a care representative in order to apply for the scheme on behalf of that person.

If the person concerned has already been made a Ward of Court then this does not apply.

An application to the Circuit Court will be expensive and involves legal cost. It is therefore advisable for senior citizens, where appropriate, to execute an Enduring Power of Attorney, which will then in effect operate as an insurance policy should there be a need to avail of the Fair Deal Scheme, so as to avoid an application to the Circuit Court, on behalf of the family, to have a care representative appointed. It will certainly save a substantial amount of legal cost.

In relation to the nursing home loan, it is open to the patient concerned to repay the loan at any time. Otherwise the monies become payable on the occurrence of any of the following events:-

    1. The death of the patient,
    2. The sale of the patient’s property,
    3. The adjudication of the patient as a bankrupt, or,
    4. A determination by the HSE that the application contains false or misleading information.

Strangely, the Revenue Commissioners operate as the debt collectors for the HSE in relation to the monies owed.

There are certain difficulties in relation to the operation of the new scheme as it involves a transition from the old subvention scheme. There will be many patients who have had subvention previously who will now be forced to use this scheme, particularly where there has been a period where subvention was not paid during particular treatments, and, then long term care is required again.

It is a means tested system and it is extremely important that the information furnished is correct in all respects. The means testing is there for the purpose of ensuring that nobody will be asked to pay anymore than they can afford. There are still doubts about what the scheme will cover as regards therapies, etc.

The HSE also has the power to indicate that a patient in hospital no longer requires acute care and can insist on payment of the average weekly nursing home charge for continued hospital care, or in the alternative, the patient will have to apply for support under the Fair Deal Scheme. The HSE, however, can only do this when they have a medical certificate certifying that the patient is no longer in need of acute care.

There is no doubt but the system will throw up a number of hardship cases and also, there is no doubt that certain people will be caught in traps during the transitional period from the previous system to the new system.

It is advisable that one should consider the execution of an Enduring Power of Attorney for the purposes of nominating a person or persons to make decisions on ones behalf, should one lose mental faculty. In the context of the Fair Deal Scheme it will certainly reduce the stress on the family by removing the necessity of applying to the Circuit Court for an order appointing a care representative.

The Fair Deal Scheme is here to stay and is in its infancy and it will be interesting to see how the scheme is funded by the Government and how successful it is at providing “accessible, affordable and anxiety free” access to nursing homes.

Dated this 6th May 2010.

Patrick Mullins
Partner
MLB Solicitors
Melbourne House
Model Farm Road
Cork