Dáil Éireann Debate, Tuesday - 23 January 2024
617. Deputy Richard Bruton asked the Minister for Health if he will indicate the date from which the rental earnings on the home of a person receiving support under fair deal will cease to be assessed for the resident’s contribution to the cost of nursing home care, and the estimated cost that is being budgeted for this change in the method of assessment. [2696/24]
View answerI wish to acknowledge the insertion of Section 45D of the Nursing Homes Support Scheme Act 2009 as amended, the commencement of which will increase the amount of rental income that nursing home residents can retain under the Fair Deal from 60% to 100%.
Prior to 1 November 2022 participants in the Fair Deal scheme were able to rent out their homes or other assets, however rental income was subject to assessment at 80% like all other income (such as pension income).
Recognising that this may act as a disincentive against renting out a property, the Government approved a policy change to the Nursing Homes Support Scheme, 'Fair Deal', to remove a disincentive for applicants to the Scheme to rent out their principal residence after they have entered long term residential care. The rate of assessment for rental income from a principal residence, effective from 1 November 2022, was reduced from 80% to 40%. This means that for someone renting out their principal residence, they retained 60% of the income accrued from that rental and 40% is assessed under Fair Deal.
This policy change addresses the commitments made under Housing For All Action 19.8. The change was made through a Committee-Stage amendment to the Department of Housing, Local Government and Heritage’s Regulation of Providers of Building Works and Building Control (Amendment) Bill 2022 and became operational as of 1 November.
Following a review period, as per the conditions of the amended legislation, this latest amendment will permit nursing home residents to retain 100% of the income accrued from renting the principal private residence. This change is implemented as from 1 February 2024.
It should be noted that this provision will only apply to income generated from rental of the principal private residence; any rental income received from a property which is not from a principal residence will continue to be treated as general income and assessed at 80%.
The current level of rental income from Principal Private Residence (PPR) is approximately €447,000 per year. The full extent of costs incurred cannot be determined until the amended scheme has been in operation for a period of time.
To monitor the impact of this amendment, enhanced processes have been implemented with appropriate checks in place regarding NHSS applications, with the intention of developing robust reporting models to assess the impacts of the financial assessment of applicants.
