State pension rise to boost Fair Deal funds by €5m

Tens of thousands of nursing home residents are set to miss out on most of the forthcoming €5 hike in the old-age pension.

The HSE will take 80 per cent of the imminent increase in the State pension from nursing home residents availing of the Fair Deal scheme, wiping out most of the gains of the latest increase and giving a funding boost of up to €4.8 million for the scheme.

As announced in last October’s budget, the state pension is set to increase by €5 a week from March 26th, at an annual cost of about €116 million.

The €5 increase applies to a number of pensions including the full contributory rate (up to €243.30 for under 80s, €253.30 for over 80s); the widow’s/widower’s/surviving civil partner’s pension, (up to €253.30 at the maximum rate); and the invalidity pension (up to € 203.50).

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But the structure of the Nursing Homes Support Scheme (Fair Deal) means most of the gains will be wiped out for those claiming the Fair Deal. The HSE, which operates the scheme, has confirmed it will seek to re-assess the financial contribution of those benefiting from the weekly increase, which will see the HSE take a further €4, or 80 per cent, of the €5 increase, to put towards the cost of funding retirement care.

Means based

First introduced in October 2009, the Fair Deal offers financial support for people who need long term residential care services, with claimants making a contribution towards their cost of care based on their means, and the State paying the balance. Typically, this means that a person will contribute 80 per cent of their income (after tax and other expenses), and 7.5 per cent of the value of their assets each week (above the cap of €36,000 per person/€72,000 per couple), as well as a contribution of the value of their home.

Someone whose only income is the state pension could be contributing €190.64 a week, and this will rise to €194.64 a week once the state pension increase kicks in and their contribution is reassessed.

“In line with the legislation, the HSE is obliged to assess 80 per cent of a person’s income (whatever that is, and including the increase in state pension) when calculating his/her contribution to care under the scheme,” a spokeswoman for the HSE said.

Some 23,006 people were supported under the Fair Deal scheme as of January of this year, with a budget of almost € 962 million. If all of these people availing of the Fair Deal were entitled to the full €5/week increase (and not all will), it would see an additional €4.8 million available to fund the scheme this year.

This year the HSE is paying nursing homes a maximum weekly price of €1,360 a week for care in a private or voluntary nursing home, or €2,399 a week in a public nursing home, for homes qualifying for the Fair Deal.