Older people going into nursing homes will in future be able to defer payment for their care until after their death, under a radical new scheme unveiled yesterday.
The change, which comes into effect in January 2008, will allow the State collect a maximum of 15 per cent of the value of an older person's home after their death.
And if a dependant is living in the home the deferred payment will not be collected for several years.
Minister for Health Mary Harney said it would lift the burden off many families trying to finance the care of elderly patients. Some older people had sold their houses and their children had remortgaged their homes to meet the costs of care, she said.
Legislation will be drawn up to underpin the scheme. It will allow people who can afford their care to avoid deferring payments.
Under the revamped scheme everyone, whether going into a public or private home, will have to undergo a medical assessment to see if they require nursing-home care. Only those with high dependency needs will be eligible for the scheme. People with low dependency needs will be given home care packages and other supports to allow them stay at home.
In addition, all those seeking nursing-home care in future if deemed suitable for it, will have to undergo a standardised means test.
It will alleviate the present position whereby older people who may have significant funds end up in public nursing home beds and only have to contribute 80 per cent of their pension to the cost of their care. Under the new scheme they too will be means tested.
Ms Harney said the scheme would ultimately pay for itself and would be "exchequer neutral". Figures released by the Department of Health last night showed that €103 million will be raised in deferred payments in 2008, rising to €178 million in 2010.
While the legislation is being drafted for the scheme, some €85 million will be spent on improving nursing home subventions next year to ease the burden on those paying for private nursing home care. At present the maximum basic rate of subvention is €190.50 per week. It will go up to €300 a week next year.
Almost 4,000 people in private nursing homes at present receive no State support and half of these are expected to receive subventions next year as rates go up. However all subvention payments will be scrapped when the new scheme for funding nursing home care begins in 2008.
A special unit will be established within the National Treatment Purchase Fund to find nursing-home beds for people qualifying for them under the new scheme.
Meanwhile legislation to provide for an independent nursing home inspectorate will be published on Thursday and the Dáil will be recalled a week early in January to discuss it. Last night the new scheme met with a mixed response.
It was welcomed by the Conference of Religious of Ireland and the Irish Nursing Homes Organisation. However Age Action Ireland branded it ageist.
Fine Gael's health spokesman Dr Liam Twomey said the scheme required detailed examination while Labour's health spokeswoman Liz McManus said the plan to give the State a claim on the estate of a deceased person, who had been in care, will greatly increase anxiety among the elderly.