The Nursing Homes Support Scheme (Amendment) Act 2021, which was signed into law on July 22nd and became operational from October 20th, introduced safeguards in the NHSS to further protect the viability and sustainability of family farms and businesses. The principal amendment of this Act ensures that where the owners of farms and businesses go into long-term residential care, their contributions against those assets will be capped at 3 years, providing that a named family successor commits to running the asset for a period of six years and certain other conditions are met.
It also includes an amendment in relation to applying the 3-year cap to the proceeds of sale of a house while a resident is in long-term care. This addresses the first relevant commitment in the Housing for All Strategy (action 19.7).
Within the NHSS, the asset value of a resident's home, known in the Scheme as the "principal residence", is assessed for 3 years, with 7.5% of its value going towards the cost of care (3.75% in the case of a couple). After 3 years on the scheme, the value of this property is no longer assessed. In practice, this generally reduces the nursing home fees of those maintaining their home, from year four onwards. However, under previous rules, if it was sold, the resulting cash asset was assessable in full for the entire length of stay in care. This could act as a disincentive for those who might otherwise consider selling their homes. The 2021 Act now extends the 3-year cap to cover the proceeds of sale, so that a person will be able to sell their home without incurring additional fees from the fourth year onwards.
A person is eligible for the 3-year cap on the proceeds of sale from their principal residence as long as the sale takes place at any time after they have started receiving long-term residential care services. However, the 3-year cap will only be applied to the proceeds of sale after 3 years in care. If a principal residence is sold, it is required that the HSE be notified within 10 working days, under Section 24 of the Nursing Home Support Scheme Act 2009. A re-assessment of an individual’s financial means may be required. If the principal residence is sold before the 3 year cap period is completed, the net proceeds of sale amount is used in the calculation of the client’s contribution to care until the three years has elapsed, and not the valuation of the residence on the date the resident entered care as would otherwise be the case.
Cash assets that are not the proceeds of the sale of a primary residence are not covered by the 3 year cap and these assets continue to be included in the NHSS financial assessment regardless of the amount of time an individual has spent in care.
It is also important to note that transferred assets are considered to be assessable under the scheme. Under the Nursing Home Support Scheme Act 2009, a transferred asset is defined as an asset that has been transferred at any time in the period of 5 years prior to the date on which an application for State support is first made by or on behalf of that person.
