CARDI Blog: Review of 'Fair Deal' Scheme

The Department of Health in Ireland today launched a review of the Nursing Homes Support (“Fair Deal”) Scheme (NHSS). The main findings of the review were discussed at a briefing of older people’s organisations held as part of the launch. In blog post, CARDI’s Policy Officer Conor Breen examines the review findings in the context of demographic change:

Review findings

The main conclusions of the review are that the NHSS has been successful in making nursing home care accessible to those who need it. It is a progressive scheme, with contributions made in line with the means of the people using the scheme. The review also reaffirms the Government commitment to facilitating older people to remain in their own homes and communities for as long as possible.

The review recommends that the current system for setting prices for private facilities should be reviewed by the National Treatment Purchase Fund. It also recommends the continued development of home and community care, the exploration of alternative residential models and some changes to how the scheme is administered.

Demand

Research published by CARDI in 2012 predicted that the number of people using residential care in Ireland would increase 59% between 2006 and 2021, amounting to an increase of over 800 people each year (Wren et al., 2012). The new scheme review predicts an even sharper increase in numbers of people requiring the NHSS for example there were 22,362 people in the scheme in 2014 but this is predicted to rise to 27,419 in the next five years and reach 33,070 by 2024.

Options

An additional €54 million has been provided to the scheme in 2015 to bring waiting times down to four weeks. However, the long-term sustainability of the scheme is clearly an issue if the scheme is to cater for an extra 1,000 people each year until 2024. The review also notes that 143,000 people will be in receipt of services for older people by 2014, compared to 108,000 in 2015. A number of options are presented in terms of reviewing rates of personal contributions in the future.

1. Reduce the asset disregard: Currently, the first €36,000 of a person’s assets are not taken into account during the financial assessment. If this were abolished, additional contributions of up to €50 per week would be payable by those with assets or savings. Reducing the asset disregard to €20,000 means additional contributions of €23 per week could be payable.
2. Increase the asset contribution: The asset contribution was increased from 5% to 7.5% in 2013. A further increase to 9.5% would yield additional revenue of €6.7million while an increase to 15.6% would yield an additional €26.7 million.
3. Increase the asset contribution based on the Principal Private Residence (PPR): a PPR is currently only assessable for three years. An increase in the maximum assessable years could be considered. The review also notes that the asset contribution on the PPR has created a perverse incentive not to sell homes, leading to properties being left vacant.
4. Increase the income contribution: The review notes that 80% of income is a fair level for people whose only income is the state pension, but an increase to 85% could be considered for people with additional income sources.

At the launch of the review, the Department of Health noted that the Government has decided to make no changes in the area of funding or eligibility.

Provision of long-term care a key policy challenge still to be actioned

The NHSS review provides important data on older people in receipt of services, both in residential settings and in home and community care. It provides updated predictions on future demand for long-term care among older adults in Ireland.

However, the review merely provides options for future changes to the scheme but does not directly address the long-term sustainability. Given the crucial importance of the NHSS to older adults who need financial assistance to provide for long-term care, providing for its sustainability is emerging as a key policy challenge for whoever takes power following the next election.