Farmers who have their lands leased out will not qualify for the three-year cap under the new Nursing Homes Support Scheme (Amendment) Bill 2021, commonly known as Fair Deal.
The amended bill, which is currently making its way through the Dáil, will offer greater equality for farmers under the national nursing-home scheme.
Its main headline – that the financial contributions of family-owned and operated farms, towards the cost of nursing-home fees is to be capped at three years – has been broadly welcomed, having been long sought after.
However, Minister of State for Mental Health and Older People, Mary Butler, has confirmed that in the case of a family leasing out their farm, the three-year cap on nursing-home fees will not be available to that family.
Fair Deal supports family farms
“The whole purpose of this amendment is to support family farms, their viability and sustainability within the family. So, leased land is not included. The cap is there if the farm remains within the family,” Minister Butler told Agriland.
“The whole premise of Fair Deal is that the more you have, the more you pay, the less you have the less you pay, and all of that is taken into account.
“Just because you have your land leased, does not mean you can’t access nursing-home care under Fair Deal, but it does mean you can’t avail of that three-year cap.”
‘One chance to get it right’
But this leasing issue needs to be looked at further, according to one member of the Irish Farmers’ Association (IFA) Farm Family and Social Affairs Committee.
Mabel Russell, the committee’s Donegal representative told Agriland:
“We have one chance to get this right.”
“And we need to be very mindful of the proposed criteria that are attached to that three-year cap, because these may have the potential to exclude many farmers.”
Leased land – a Fair Deal?
The most recent Farm Structure Survey carried out in 2016 by the Central Statistics Office (CSO) can offer some insight into the amount of land that is being leased in the country.
It revealed that almost 47,000 farms were renting in land, totalling 830,500 hectares (ha).
Almost 15% of all farms rented in more than 50% of their total area farmed and in the case of 5,700 farms, 100% of the farm land was rented in.
In Co. Donegal alone, more than 32,000 ha of land is leased out, according to Mabel.
“Farming organisations encouraged long leasing of land and now many families may be excluded from this three-year cap because of it, because the leased land is not considered a productive asset,” said Mabel.
Successor living abroad
Another criterion that needs to be looked at closely, according to the IFA’s Donegal representative, relates to the identified successor.
Farming families will be eligible for the three-year cap under the proposed new Fair Deal scheme once a successor is in place and that successor, by signing a statutory agreement, continues to farm the land for six subsequent years.
Minister Butler has sought to clarify a previous comment that the successor does not have to be a relative. As the bill currently stands, the successor must be a relative. However, the minister said she will be addressing this issue.
“It was my understanding that the successor did not have to be a relative. I will be introducing an amendment to ensure that the person who is the successor, does not have to be related. Although I don’t see this happening in too many instances, I want to ensure that any unintended consequences will be squared off.”
There is a question mark, according to Mabel, over the requirement for the successor to have worked on the family farm for three of the previous five years.
“In Donegal and all along the western seaboard, for example, many of the farms are small and couldn’t sustain two farming families.
“In many cases, the likely successor – the son or daughter – has gone abroad to work and may only return when their relative needs nursing-home care.
“Will they be excluded because they haven’t been able to work on the farm for three of the previous five years?”
Family-operated Fair Deal
When questioned on this issue, Minister Butler confirmed that as long as the farm was operated by the family for three of the previous five years, and was not leased out, there will be no obstacle in place for someone returning home from abroad to take over the family farm.
“What we are saying is that as long as a substantial part of their [person requiring care] working time, or their partner’s, or their son’s or daughter’s, or the family successor’s was spent working the farm in the previous five years, it won’t be problem. Generally speaking, as long as it was being run by the family, it will be OK.
“We are trying to make this as easy as possible for families,” the minister said.
Five-year look back
The ‘five-year look back rule’ is also an issue, said Mabel. While this is a personal view of hers, it is one that is shared by others.
Under this five-year rule, any land or assets transferred by a farmer to someone else, will still be factored into that farmer’s financial assessment for Fair Deal, if the transfer happened within five years of applying to the scheme.
“So, someone could have their farm transferred to an individual for two years, for example, and then they have to go into the nursing home, and that farm will be looked at.
“It is very unfair that the person to whom the farm has been transferred – with all taxes paid on it and with the folio registered in their own name – now finds themselves with a burden on their deeds because of that five-year look-back rule, and they have to pay for the nursing-home debt of another person.”
This could potentially impact the transferee’s chances of securing a bank loan for further farm investment, Mabel explained, adding that one Irish bank had confirmed that such a burden may ‘impede borrowing because the banks may require a clean deed’.
Responding, Minister Butler said that there are no plans to amend the five-year look-back rule.
“There is no intention to change that, or make it shorter than five years. The same rules apply to everyone in respect of Fair Deal, not only farmers,” said Minister Butler.
Status of bill
The Nursing Homes Support Scheme (Amendment) Bill 2021 is currently at second stage where members of the Dáil and Seanad have the opportunity to discuss and comment on it.
It will move to the next stage – Committee stage – in June, and this will afford the opportunity for amendments to be made and for the detail of the bill to be looked at.