What’s the deal with the Fair Deal scheme?
Q&A by Martin Wall as report on nursing home scheme published
What is the Fair Deal scheme?
Fair Deal is the name given to the State’s Nursing Home Support Scheme which effectively finances long-term care for most older people. It costs the State between €900 million and €1 billion each year.
How does the scheme work?
People generally contribute 80 per cent of their income towards the cost of their care and 7.5 per cent of the value of any assets every year. Where assets include land and property, the contribution based on these assets can be deferred until after death under a nursing home loan. The 7.5 per cent annual contribution from the asset value of the family home is only charged for three years.
What problems have arisen with the scheme?
The Fair Deal scheme was established in 2009 with a budget that was capped annually. Given the growing number of older people, an inevitable problem is that the scheme has run out of money on occasions, leading to waiting lists for approval for a nursing home place.
Does this have consequences?
Earlier this year the head of the HSE Tony O’Brien described the nursing home scheme as the Achilles’ heel of the Irish health service. In essence, O’Brien argued that there was a direct link between increased waiting times and longer queues for approval under the Fair Deal scheme - which would allow qualifying older people to secure a nursing home place - and the number of delayed discharges in hospitals and the record numbers waiting on hospital trolleys each day.
How was this problem addressed?
At the end of last year an additional €3million was allocated to deal with the high numbers of people waiting for approval under the Fair Deal scheme as part of the HSE’s winter initiative. This resulted in an extra 300 approvals on top of the routine 700 places which are allocated each month.
However, as the problems got worse and delays forecast to become even longer, the Government allocated a further €70 million package earlier this year to deal with problems in emergency departments including more funding for the Fair Deal scheme. Under this plan a further €44million was allocated to provide 1,600 extra nursing home places under the Fair Deal scheme. This investment has reduced the waiting times for the Fair Deal scheme.
Is this a long-term solution to the problems facing the Fair Deal scheme?
Probably not. Last April the Minister of State at the Department of Health Kathleen Lynch argued that the Fair Deal scheme should be considered to be “demand-led”. This would mean funding would have to be provided to meet the number of people deemed to be in need of long-term residential care and that the budget would no longer be capped annually.
Is this where the review of the scheme fits in?
It was announced as long ago as 2012 that the Fair Deal scheme was to be reviewed. The longer term solution to the problems of the scheme is that more money is going to have to be invested. Theoretically this could come in full from the Exchequer, however the more likely scenario is that older people who need long-term care could be asked to contribute considerably more to cover the cost involved.