As assets go, agricultural land is unique, in that it has huge capital value but only a very limited earning capacity. Dividing the farm between successors is rarely an option, unless the holding is significant, and the smaller holding will rarely be viable to provide an income. Often, the income from the farm is the only source of income. In relation to the family home, this is often located on the farm, where the sheds and outhouses are also located. It is seen as a shameful thing to have to sell the farm for whatever reason, especially a farm that has been in the same family for generations.
Farmers were seen last week in Dublin protesting over the lack of progress in the proposed changes that are to be made to the Fair Deal Scheme, which in its current state poses a real threat to Irish farmers. Farmers are being forced to sell land to pay for nursing home fees in their old age. Farmers do not want to hand over the farm to their son or daughter with significant debt attached to it, which would leave their child with substantial debt to pay while trying to earn a living and raise a family.
Ireland is changing and people are living longer. People are having smaller families. The cost of financing the Fair Deal scheme is expected to increase substantially in the coming years due to the country's ageing population. Changes to the scheme will also see the HSE bear the cost of the reduced nursing home contributions for farmers and business owners.
Having a family member who requires nursing home care is a difficult situation for everyone. The first and most important matter that needs to be addressed is your family member’s health and care. While home help is an excellent service that provides support to people in the community who need help with day-to-day tasks because of illness or disability, it is not sufficient for a person who requires full time care and the logical alternative is nursing home care. Simply put the cost of full-time nursing home care is enormous for any family to bear.
Until now, the three-year cap on contribution costs only applied to a nursing home resident's family home. The overhaul of the State's nursing home scheme will see a three-year cap introduced on farm and business assets which were previously subjected to a continuous 7.5% contribution based on their value.
Concern is mounting over the rising cost of funding the Fair Deal for nursing home care, as demand for the scheme soars. If Fair Deal exceeds its allocated budget, it has been reported that the Minister for Older People Jim Daly will be forced to seek emergency extra funding from the Department of Health.
Farmers are growing increasingly and understandably concerned about losing their homes to the Fair Deal scheme and are seeking legal advice to transfer their homes to their heirs at a much younger age, so if and when they need care their assets aren’t taken into account. This can be extremely distressing as farmers do not want to work all their lives and pay taxes only to lose their farms and their children’s livelihoods to pay for their nursing care in their old age. The Fair Deal Scheme is unfair and while we wait for changes to come into law I encourage farmers to research the matter and obtain legal and tax advice well in advance of their most senior years.
Karen Walsh, from a farming background, is a solicitor practicing in Walsh & Partners, Solicitors, 17, South Mall, Cork (021-4270200), and author of ‘Farming and the Law’. Walsh & Partners also specialises in personal injury claims, conveyancing, probate and family law.
Disclaimer: While every care is taken to ensure accuracy of information contained in this article, solicitor Karen Walsh does not accept responsibility for errors or omissions howsoever arising, and you should seek legal advice in relation to your particular circumstances at the earliest possible time.