Financial deterrants to selling home under Fair Deal to go – but ‘rental income nut remains uncracked’

Around 4,000 houses become vacant as a result of people going into nursing homes annually, and the number over the years could build up to around 25,000.

Minister of State for Older People Mary Butler said it is planned to change the terms of the Fair Deal scheme which make it financially unattractive for long-term nursing home residents to sell their homes.

However, it will take time before other changes are made to remove similar disincentives to renting their homes.

The minister made the comments before the Oireachtas Health Committee which was considering the Nursing Home Support Scheme (Amendment) Bill.

Currently, the money generated from the sale of the house is subject to a 7.5pc levy with no time limit.

In the same way, if the house is rented as part of the Fair Deal scheme, 80pc of any rental income is taken by the State towards the cost of their care which is means-tested and subsidised by the State.

The minister told the committee the amendment to remove the disincentive to sell is “ready”, but her officials are still looking at issues around the rental income question.

Officials “have not managed to crack that nut over many years”, she added.

She had concerns about safeguards and said rental income could see people prematurely entering nursing homes.

However, Independent TD Denis Naughten and Róisín Shortall, Social Democrats co-leader, pressed for earlier action on the disincentive to rent a home.

Mr Naughten said: “All I am looking for is equity. The Department of Social Protection takes the capital value of an asset or income generated into account, but not both, in its assessments. But under Fair Deal you pay three times.”

He estimated there could be a build-up of around 25,000 of these properties at any one time but the terms of the Fair Deal act as an artificial barrier to renting at a time when there is such a demand for housing.

Ms Shortall said the extent of vacant houses becomes clear during election time when canvassers come across houses with ramps and handrails where the resident previously lived but which are now lying idle.

Meanwhile, Tadhg Daly of Nursing Homes Ireland has written an open letter to TDs saying it is “unfathomable” that as of today, nursing homes will lose the Temporary Assistance Payment Scheme which is used to pay for the deployment of extra staff and the use of specialised equipment for infection prevention and control. He pointed to the threatened wave of the Covid-19 Delta variant.