Government ‘Fair Deal’ Scheme could bankrupt family farm

‘Bill for farmers inheriting holdings from parent needing nursing home care may be up to half million euros’

Sligo News File Online.

The alarming treatment of the farming sector under the ‘Fair Deal’ nursing home scheme has been highlighted by the country’s main farm body.

Fair Deal 1A farmer taking over a landholding from a father or mother opting for the scheme could find themselves exposed to a massive liability on the death of the parent.

Explaining the implications of the provision, Chairman of the Irish Cattle and Sheep Farmers Association Rural Development Committee, Seamus Sherlock said both 80% of the income and
7.5% of the assets per annum up to the cost of the nursing home care must be met by parent moving into a nursing home.

Denouncing the scheme as “extremely unfair and unworkable” for the vast majority of farmers, Mr. Sherlock said it “should not have the effect of putting a farm out of business.”

He said the ICSA believes the 7.5% assessment of assets on an annual basis is “quite severe” but the key problem is that while this is capped at 22.5% for principal residential assets “there
is no cap for farmland. Hence, a farmer who took over a farm from his father could be exposed to an unlimited liability on the farm at the death of the parent.

“This could arise where a farmer suffering dementia requires 10 years care in a nursing home as it is not feasible to look after him at home.

Seamus Sherlock, Chair, ICSA Rural Development Committee.
Seamus Sherlock, Chair, ICSA Rural Development Committee.

“The bill here could be up to 75% of the value of the farm or the total bill for 10 years in a nursing home.” A ten-year stay in a nursing home could lead to a bill of about €500,000, he said.

“In practice, the first port of call will be to deduct 80% of the patient’s income but in most cases, this will be the state old age pension which will be well short of the total bill. The old age pension
will contribute about €9,500 to be set against the annual bill, leaving over €40,000 per annum to be deducted from the value of the farm.

“The problem is that there are very few farms generating enough income to build a fund to take care of nursing home costs. The likely scenario here is that the farm will have to be sold to pay the
Fair Deal bill.

He acknowledged that there are exceptions whereby there is a sudden illness or disability and the successor has been farming at that time “but this is the exception rather than the rule.

“On the other hand, even where the assets have been transferred, this will only work if five years have elapsed between transfer and the nursing home care requirement. ICSA believes that this
imposes an impossible strain on farm families who want to see their relative getting the necessary care but where the Fair Deal Scheme sows the seeds of doom for the long-term future of the farm.

“It is clear that the Fair Deal Scheme should not have the effect of putting a farm out of business.

“I know of a case where Trojan efforts are being made to keep a parent at home and cared for. The parent is suffering from extreme dementia. While the decision to keep the parent at home is
complex, it is the case that the Fair Deal Scheme weighs heavily on the decision. This should not happen.

Fair deal 3“Of course, we understand that a scheme to cover nursing home costs is regarded as a financial imperative from the exchequer point of view and as a political imperative from a health care policy
point of view. However, it is hard to understand why an elderly person suffering from an acute illness like cancer will have all care needs covered by the state but not where the illness is of a nature
requiring long-term palliative care.”

He reiterated that the scheme “should not have the effect of putting a farm out of business.”

The ICSA holds that the “three-year cap (22.5%)” should apply to farm assets, he said, and the association will “continue to campaign for farmers on this issue.”