I move: "That the Bill be now read a Second Time."
I am very pleased to have the opportunity to introduce the Bill to the House. Since I was appointed in July 2020 as Minister of State with responsibility for mental health and older people, updating the fair deal legislation to enhance protections for farmers and small business owners has been an absolute priority for me. I look forward to hearing the views of Deputies and working with all Members of Dáil Éireann and Seanad Éireann to progress this important legislation without delay through both Houses.
The goal of the Government is to support older people to live in their own homes with dignity and independence for as long as possible. Unprecedented investment has been made available for home support and intermediate care in 2021 to advance this goal. Nevertheless, long-term residential care is part of an overall continuum of care and remains an integral option for many older people to ensure they receive the right care in the right place at the right time.
The nursing homes support scheme, commonly known as the fair deal scheme, is a system of financial support for those requiring long-term nursing home care. Participants contribute to the cost of their care according to their means, while the State pays the balance of the cost. The fair deal scheme is one of the most substantial financial support schemes in the State, supporting up to 22,500 people by the end of this year. With a gross budget of approximately €1.4 billion in 2021 and a net cost to the State of just over €1 billion, maintaining the level of investment by the State to supplement the contributions from residents is essential to ensuring that long-term nursing home care is accessible and affordable for everyone.
We must protect the successful operation of the fair deal scheme by ensuring that any amendments made to the scheme support its long-term sustainability. We must also preserve its fundamental policy objectives and principles. The fairness that gives the fair deal its name is based on avoiding an unfair situation where people who have greater means available to them could pay less to the scheme than individual who have fewer financial resources.
Under the scheme, a financial assessment is carried out by the HSE to determine how much each applicant will contribute to the cost of their care. Applicants contribute up to 80% of their assessable income and a maximum of 7.5% of the value of their assets each year. The State then pays the balance of the cost of care. A person's level of contribution is unaffected by their choice of nursing home, be it public, private or voluntary. However, the capital value of an applicant's principal private residence is only included in the financial assessment for the first three years of their time in care. This is known as the three-year cap.
The scheme contains important safeguards for participants, such as ensuring that nobody will pay more than the actual cost of care. It also ensures that people do not have to sell their home during their lifetime to pay for long-term nursing home care. Where an applicant's assets include land and property held in the State, the contribution based on such assets may be deferred and collected from the estate through the optional loan element of the scheme which is known as ancillary State support. There are also limits on the financial assessment. For example, the first €36,000 of the value of an individual's assets, or €72,000 in the case of couple, is not counted at all. If an applicant has a spouse or partner remaining at home, he or she will retain half of the couple's income.
Although there is broad agreement that the fair deal scheme operates well and continues to provide appropriate financial assistance where required, concerns have been raised through many years about the financial assessment where applicants have operated family-owned farms or businesses. In the review of the scheme published in 2015, it was highlighted that the three-year cap which applies to the principal private residence does not apply to farms except under very specific circumstances. A concern was raised that the annual fair deal charge based on the value of those family farms or businesses could affect their viability and sustainability, especially where care might be required for a long period.
The Government heard these concerns and, following publication of the 2015 review, made a decision to introduce changes to the scheme with regard to the financial assessment of farm and business assets that are passed to a family successor. It is Government policy to encourage ordinary succession arrangements for farms and small businesses where appropriate. These arrangements should ensure that farm and business assets are transferred well in advance of five years before nursing home care is required, avoiding a levy on the farm or business asset entirely. However, despite best efforts, sometimes unexpected health events can occur which prevent early succession arrangements. The scheme currently acknowledges this, so that a farmer or business owner can qualify for a three-year cap on the financial assessment of productive assets in cases where the person has suffered a sudden illness or disability that causes him or her to need long-term residential care. This legislative amendment to the scheme will now extend this principle to cap contributions based on family-owned and family-operated farm and business assets at three years where a family successor commits within the first three years of the person's time in care to working the farm or business for a period of six years. The intention of this change is to ensure that in situations where the productive income of the family farm or business is being relied upon as a principal livelihood and the farm or business is being handed down to the next generation, the viability and sustainability of these farms and businesses is protected.
Ultimately, the Bill seeks to alleviate any unnecessary financial pressures placed on these families due to existing provisions within the law. Therefore, regardless of the duration of a person's length of stay in long-term residential care, the maximum contribution based on the capital value of a farm or business will be 7.5% per annum for three years only, provided that all the conditions of the scheme are complied with. This change will ensure that the fair deal scheme is truly a fair deal for farm families and small business owners.
In November 2019, the Joint Committee on Health undertook pre-legislative scrutiny of the general scheme of the Bill. Unfortunately, the report of the committee was not completed before the dissolution of the 32nd Dáil. Progress on the development of the Bill was subsequently negatively impacted by Covid-19. To ensure the legislation would not be delayed, in light of the work already conducted on the proposed legislation by the committee, which is on public record, I sought permission from the Oireachtas Business Committee for a waiver from the requirement to conduct repeated pre-legislative scrutiny. The waiver was granted on 4 February. I thank the former members of the committee for their engagement during this process.
This is a lengthy and technical Bill. I will now take the House through the Bill section by section to clarify its provisions. As I address each individual sections, it will provide more clarity on how the Bill will operate in practice.
Section 1 is a standard provision, clarifying the principal Act to which the amendment applies. Section 2 amends section 3 of the principal Act, providing definition for certain key terms used in the Bill.
Section 3 provides for the appointment of a family successor to a farm or business asset which the person in care, or his or her partner, owns or previously owned. The section details the eligibility criteria which must be met by the person in care and the prospective family successor. Key among these is that the person in care must declare, by way of a statutory declaration, that for a period of three years, which need not be continuous, during the period of five years ending with the day on which he or she began to receive care services, that a substantial part of his or her working time, or his or her partner, or the family successor, was spent running the farm or business asset.
The nominated family successor must also commit, by way of statutory declaration that a substantial part of his or her normal working time will regularly and consistently be applied to running the farm or business for a period of six years beginning on the date of his or her appointment. The prospective family successor must be at least 18 years of age and related to the person in care, or his or her partner. If the asset in question is a transferred asset, the family successor must be the owner of the asset. This section also allows the person in care to appoint multiple family successors on multiple assets, but only one family successor on any given asset. This section also obliges the owner or owners of the farm or business asset to consent to a charging order being registered against the asset. The role of the executive in the application process is also established.
Section 4 provides for the creation of a charge against the interest which the person in care or his or her partner has or had in a farm or business asset. This charge acts as security for the relief advanced under the amendment in case a recoupment has to take place. Increased State support in respect of productive assets will not be payable until such a charge is in place, where applicable. The charge can be placed on land-based assets in the State. This provision adopts the administrative procedures to facilitate the charging of assets from similar procedures in the principal Act relating to ancillary State support.
Section 5 provides for the duties of the HSE when determining whether the three-year cap will apply in respect of farm or business assets. Persons wishing to avail of the three-year cap must have been in care for three years and have appointed a family successor in respect of relevant assets. The charge on the asset must also be in place. The executive will determine whether the applicant will qualify for the relief, with all the conditions for qualification being outlined in this section.
Section 6 mandates the executive to calculate the revised State support that will be payable following a determination that the three-year cap applies, and to also calculate and record the amounts of relief payable to the person in care for the period during which the three-year cap applies.
Section 7 provides for the review process for all appointed family successors. Following a determination that the three-year cap applies to a farm or business asset, the HSE will need to review, at least once, that each family successor is complying with the conditions he or she agreed to when appointed.
The Department of Health, alongside the HSE, is currently working with the Department of Agriculture, Food and the Marine to develop the operational guidelines for this review process and the specifics of how the compliance checks will be undertaken. The Department will also be developing, alongside relevant stakeholders, guidelines for completing compliance checks for those running businesses.
Section 8 provides for when the person in care dies after the three-year cap has been applied. In this instance, if the six-year period committed to by the family successor has not expired, the family successor will have to commit to continuing to finish the six years. Alternatively, the lawful successor may become the new family successor or appoint a different family successor.
Section 9 provides for when the family successor dies or can no longer comply with his or her obligation before the six-year period that was committed to has expired. This section allows the person in care to appoint a new family successor who will have to finish whatever is left of the six-year obligation of the original family successor.
Section 10 provides for changing a family successor when an asset is transferred by the person in care or, in the case of a transferred asset, by the family successor. In this instance, the newly appointed family successor will have to complete the six-year obligation agreed to by the original family successor.
Section 11 provides for a situation where a repayment event occurs caused by one or more of the circumstances listed in this section. A repayment event may occur when the family successor does not comply with his or her obligations under the amendment, and for various other reasons outlined in the Bill. Before a decision is made on a repayment event, the person in care will have the opportunity to make representations to the HSE. If the HSE decides that a repayment event has taken place, the three-year cap will be removed and the amount of State support that the person in care receives under the scheme will be revised. The relief already advanced after the three-year cap was applied will also have to be recouped.
Section 12 provides for the recovery of sums due to the executive when it is determined that a repayment event has occurred. The Revenue Commissioners will act as the collection agent to recoup the debt owing to the State.
Section 13 makes it an offence for any relevant person to knowingly or recklessly give the executive information which is false or misleading in respect of various provisions in the Bill. Section 14 amends section 21 of the principal Act, extending the powers of a care representative in the event that a person in care does not have full capacity to make decisions regarding an application to the scheme.
Section 15 amends section 24 of the principal Act, requiring the appointed family successor to provide written notice of any material change in circumstances of the person in care to the executive. Section 16 mandates the person in care, his or her partner, and the family successor, to inform the HSE of any material change in circumstances of any family successor.
Section 17 amends section 27 of the principal Act, allowing the executive to request that the assets of an estate are retained in order to repay any moneys owed as a result of a repayment event under the Bill. Section 18 sets out the administrative process in relation to the discharge, or release of the charge, made against an asset under this Bill.
Section 19 amends section 29 of the principal Act and refers to a charge or charges to be made under section 14B against farm or business assets which are under joint ownership. Section 20 amends section 32 of the principal Act, extending the circumstances under which appeals against certain decisions of the executive can be made.
Section 21 amends section 36 of the principal Act, and allows the Minister, by regulation, in respect of any difficulty which arises during the period of three years from the commencement of the Act of 2021, to take any necessary action to bring the amendments in the principal Act into operation. Section 22 amends section 45 of the principal Act, expanding the executive's duties regarding the storage, retention, and disposal of applications and notifications made under this Bill.
Section 23 requires the executive to produce an annual report for the Minister for Health detailing the effects of the new provisions on the scheme, trends arising from these effects, and some other matters that may be specified by the Minister. Section 24 requires that the Minister must carry out a review of the operation of the amendments to the principal Act not later than five years after the 2021 Act comes into operation, in consultation with the Minister for Public Expenditure and Reform. A report setting out any findings must be laid before each House of the Oireachtas.
Section 25 amends Schedule 1 of the principal Act, repealing the availability of the three-year cap on productive assets as a result of sudden illness or disability. This section adds additional provisions which allow for the three-year cap to apply to farm and business assets following a positive determination under this Bill. This section also amends the definition of "transferred income" in the principal Act, ensuring that the income earned by the family successor, while working a productive asset, is not factored into the financial assessment for the scheme.
Section 26 provides for transitional arrangements and amends certain paragraphs in Part 3 of Schedule 1 of the principal Act.
Finally, section 27 is a standard provision, dealing with the Short Title and commencement arrangements.
It will be necessary to introduce a small number of Government amendments, including technical amendments, as the Bill makes its way through the Houses of the Oireachtas. The most significant of these concerns how couples will be treated under the Bill. It was not possible to provide for these items before the Bill was published, but they are all in line with the contents of the general scheme of the Bill. At a recent Cabinet meeting on housing, I committed to working towards bringing forward an amendment on Committee Stage related to extending the three-year cap to the proceeds of the sale of a principal private residence. The proposed amendment relating to the three-year cap that is the subject of the legislation is grounded in the principle of fairness that is fundamental to the fair deal scheme and seeks to remove a disincentive to those who would otherwise choose to sell their home.
I fully acknowledge the severity of the current housing crisis and I am committed to advancing the programme for Government by bringing forward policies that are targeted, equitable, safeguarded, and based on robust evidence.
The potential for inclusion of a Committee Stage amendment aimed at encouraging residents of long-term care who avail of fair deal to rent out their vacant homes was also discussed. I have committed that the Department will continue to actively engage with the Department of Housing, Local Government and Heritage, following the existing agreed plan to support the development of policy in this area. I also continue to hold the view that the scheme should not be extended to change the method of assessing income from productive assets that are subject to a lease agreement. The policy objective of this Bill is to protect the continued family ownership and operation of farms and businesses, and this policy would not be advanced if such leasing income was included in the three-year cap.
The changes to the Act will also not be applied retrospectively. That is a challenging precedent to introduce to the scheme and the risk of potential impacts is high.
This historic legislation comes after many years of hard work by many key stakeholders, including politicians, advocacy groups, and organisations representing older people. As a Minister of State from rural Ireland, I am acutely aware of the financial pressures that many farm families experience when it comes to the care of their loved ones. This is a hugely emotive issue for many families and one that the programme for Government promised to deliver on.
I acknowledge the work of my officials and members of Cabinet in getting this long-awaited legislation to this point, and I look forward to seeing it enacted as soon as possible. I anticipate that it will receive cross-party unanimous support, and I look forward to discussing the details of the Bill with colleagues in both Houses. I commend the Bill to the House