Lack of joined up thinking is a barrier to nursing home residents renting out their home

In Blog, Families, Infrastructure by Denis Naughten

Every year up to 4,500 people leave behind an empty home when they enter long-term nursing home care. Yet despite the unprecedented demand for rental accommodation just 400 of these homes are leased out.


There is something wrong when so few of these homes are leased out, particularly when the State places a financial charge against the value of any of these homes if that older person does not have any cash savings.


The reason so many of these houses are left empty is because we have a perverse rule under the Fair Deal Nursing Home Support Scheme that sees the older person charged on three separate occasions if they decide to lease out their home after they enter a nursing home.


This is effectively three forms of tax, which together act as a massive barrier to the release of these homes onto the rental market and many of them are family homes close to schools and services.


Under the Fair Deal Nursing Home Support Scheme, 7.5% of the market value of the house being vacated by an older person is charged against the cost of that person’s nursing home care for the first three years. If the older person does not have existing savings to meet that cost then a financial charge, up to 22.5% of the value of the house over the three years, is placed on that property.


But if that older person and their family decide to rent out that house to meet this charge, then 40% of rental income is also included in the means calculation. It then gets worse because if that rent goes through the older person’s bank account all of the rent is considered as capital and is included in the means assessment for a third time.


So, if a vacant property is leased out to a family looking for a roof over their heads, the older person in the nursing home is paying for this in their means assessment three times. This is unjust and, in the middle of a housing emergency, this is to my mind immoral.


While I acknowledge that Government has acted on this issue, on my request, by reducing from 80% to 40% the amount of rental income included in the calculation, we still have a treble tax on renting out these homes. And this is on top of the requirements placed on all other landlords. This is because the Department of Health fears the removal of the treble tax could lead to the premature entry of older people into nursing homes.


As a result up to 4,000 additional family homes every year get closed up while young families are being forced into emergency accommodation.


What the Department of Health has refused to acknowledge is that in order for any older person to go into long term nursing home care under the Fair Deal scheme HSE doctors must independently perform a medical evaluation on whether that older person requires long nursing home care. It is only after that assessment is performed that the Fair Deal application is approved.


If the Department of Health believe that its independent medical assessment is inadequate, then it needs to revise the criteria for that assessment not block the release of some of the 166,752 vacant houses and apartments that the Central Statistics Office identified in last year’s Census, that could help provide a home for families.