Proposals to repay nursing home fees

Repayment scheme: Minister for Health Mary Harney is to bring proposals today to Cabinet for a scheme to govern the repayment of hundreds of millions of euro which was illegally deducted from patients for their stay in public nursing homes or other publicly funded residential centres.

Up to 20,000 people who are still alive and a further 40,000- 50,000 estates will benefit for the repayment scheme, which is likely to run over at least two years. The Government has set aside €400 million in its spending estimates for next year to meet the initial costs.

The Government believes that when interest is added, the overall cost of the repayment scheme will be around €1 billion.

Under the repayment scheme, all money paid back to patients who were illegally charged will be exempt from tax. The repayments will also be disregarded as part of assessments for health or social welfare benefits.

However, family members or estates who reclaim money which was illegally deducted from relatives during their stay in public nursing homes will have to pay tax on the repayments. The money will also be taken into account when determining eligibility for means-tested State benefits.

The Tánaiste told the Dáil recently that "the normal tax and means assessment arrangements will apply to those who benefit from repayments to estates".

Under the terms of the repayment scheme, anyone who is still alive and who was the subject of long-stay charges for publicly funded residential care will receive their money back in full.

In the case of the estates of deceased persons, the Government will only repay the money if the patient died in the six years prior to December 9th, 2004.

The repayments will include both the charge paid and an amount to take account of inflation, using the consumer price index, since the time the person involved was charged.

The scheme is expected to allow for applications for repayments to be submitted up to December 31st, 2007.

There will be an appeals mechanism for anyone turned down for a repayment.

The scheme will also contain provision for people entitled to benefit from the repayments to decline the money and instead pass it on to pay for developments in the health service.

In cases where a potential recipient opts to waive the right to a repayment, the money will be assigned to fund one-off service improvements in elderly, mental health and disability services.

The legislation is also expected to include safeguards to prevent exploitation of those who receive repayments and who are not in a position to manage their own financial affairs.

This could involve health service officials being designated as authorised officers to open accounts in the name of persons "who are non compos mentis and in receipt of payments".

The Health Service Executive (HSE) is to submit a report to the Department of Health on the recruitment of an outside company which will organise the repayment of the money.