Main points:
People will be medically assessed to see if they are suitable for long-term care - they will only be eligible for this nursing home care scheme if they have high dependency needs. People with low dependency will be supported in their own homes;
Everyone suitable for nursing-home care will undergo the same standardised means test whether going into a public or private bed;
Based on the means test, people going into care will be required to pay 80 per cent of their disposable income towards the cost of their care - if their income is high they will not be charged more than the actual cost of their care and in the case of those who only have a pension, they will only pay 80 per cent of this;
Most older people do not have a high disposable income. The average income of people over 65 years is about €234 a week, yet nursing-home care can cost up to €1,000 a week. If a person's disposal income is less than the cost of their care, there will be a charge of 5 per cent of the market value of their home levied for a maximum of three years. This fee will be deferred until after death or until after their estate is settled, even if this is years later;
In the case of a couple where only one of them goes into care, the charge on the property will be halved;
The charge on the property will be for a maximum of three years no matter how long an individual spends in care;
The National Treatment Purchase Fund will draw up a list of suitable nursing homes and provide them to people requiring nursing-home care in each region. The fund will agree charges in advance with each home and only contract beds from homes that reach certain standards;
The new scheme comes into effect on January 1st, 2008, after legislation is drawn up.
How it might work: two examples
EXAMPLE 1: Mr Jones (Single, weekly pension of €182, no house)
Mr Jones lives in Dublin in a local authority house. His sole income is the State pension (non contributory). He has no assets. Having been assessed as of maximum dependency, Mr Jones enters a private nursing home and applies for subvention. Under the current subvention system, he may have to pay €610. He is likely to receive €190.50 from the HSE as a basic subvention. Mr Jones only has an income of €182 a week and has no assets or savings on which to rely. He will therefore have to either apply for a discretionary enhanced subvention payment or depend on family and friends to make up the shortfall. Under the new scheme, Mr Jones will pay €145.60 a week towards his cost of care. The HSE will pay the balance of the cost, in this case €654.40.
EXAMPLE 2: Mr Kelly (married, combined weekly income of €450, house of €300,000)
Mr Kelly (77) lives with his wife in their house in Co Offaly. He now needs full-time residential care and enters a private nursing home. He has a pension of €250 and his wife has a pension of €200. Their house is valued at €300,000.
Mr Kelly, assessed as of maximum dependency, applies for subvention. Under the current subvention system, he may have to pay €615.50. He is likely to receive €183.50 from the HSE as a basic subvention. Under the new scheme, Mr Kelly will pay €180 a week towards his cost of care. The HSE will pay the balance of the cost, in this case €620. A deferred charge of €109.62 a week is payable from the estate after the death of his wife.