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Nursing home group warns work permit changes will cause more closures

Minimum salary payable to healthcare assistants and home carers to increase to €27,000 from January

Nursing Homes Ireland has taken aim at Minister for Business Neale Richmond over changes announced to the work permit scheme last month. Photograph: Marc O'Sullivan

Ian Curran
Mon Jan 1 2024 - 06:00

Incoming changes to the Government’s work permit system, particularly the increase to minimum salaries that must be paid to workers coming to the State from abroad, will increase costs and lead to closures of nursing homes, an industry group has claimed.

In an open letter to Minister of State for Business Neale Richmond, Nursing Homes Ireland (NHI) has called for an increase in funding for nursing home operators under the Fair Deal State subsidy scheme, to defray additional costs associated with the changes.

The Coalition moved in December to expand the work permit schemes to help ease staff shortages, increasing the number of permits for jobs in acutely affected sectors including social and disability care.

In expanding the scheme, the Government also increased the minimum salary payable to healthcare assistants and home carers to €27,000 from January. The minimum is scheduled to increase to €39,000 by January 2026.

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NHI chief executive Tadhg Daly claims the increases will force some operators to the wall at a time of high and rising operating costs.

“Given the reliance of the nursing home sector on staff from overseas, there are significant unintended consequences and we are extremely concerned that your department did not engage and consult with the sector,” he said in the letter to the minister.

The number of nursing home closures has more than doubled across the State over the past four years, according to a recent Health Information and Quality Authority (Hiqa) report

“Nursing homes are ultimately dependent on the Nursing Homes Support Scheme (Fair Deal) funding to meet their operational costs, with staffing accounting for approximately 60 per cent of such costs,” Mr Daly said. “The ability of nursing home providers to implement staff cost increases is entirely dependent and directly reliant on Fair Deal.”

In that context, he claimed the new arrangements require a “commensurate increase” in the Fair Deal budget and funding under the scheme. “Without recognition of these additional costs in the cost base, more nursing home providers will be closing their doors, unable to cope with the increases within the constrained funding environment they operate in,” Mr Daly said.

At the time that the expansion of the permit scheme was announced, Mr Richmond said he expected the total number of work permits granted next year to increase, after falling in 2023 due to a decline in the technology sector.

“I want to see people coming to Ireland. I want us to be in a position to fill demand in these critical areas both from the employer’s and employee’s point of view but, crucially, for the clients who need the services of a mechanic or social care worker,” the Fine Gael Minister said.

The number of nursing home closures has more than doubled across the State over the past four years, according to a recent Health Information and Quality Authority (Hiqa) report.

Operators cited a number of reasons for this, such as concerns about financial viability, staffing difficulties and burnout after two years of coping with the Covid-19 pandemic.

Ian Curran

Ian Curran

Ian Curran is a Business reporter with The Irish Times

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