As published in The Irish Times, June 2018.

The Fair Deal nursing home scheme should be revamped in Budget 2019 to help address the housing crisis, the Law Society has said.

In its pre-budget submission, the legal lobby group says the Fair Deal scheme, which offers financial support to people needing long-term care, is potentially hampering the release of housing stock and contributing to the level of vacant houses in Ireland.

The society said the way the Fair Deal scheme is currently structured makes it less attractive for a homeowner going into a nursing home, or their beneficiaries, to either sell their home, or rent it.

Under the rules as they stand, selling the property would see its full value assessed as part of the financial means of the nursing home resident and go to meet the cost of their care.

By holding on to the property, vacant, only a percentage of the property value is assessed as means and only over the first three years of care. This sum is not payable until the property is sold after the nursing home resident’s death.

If rented, any income from the rent of the house is not paid to the Fair Deal applicant.

There are currently about 23,500 people availing of the Fair Deal scheme in Ireland.

The Law Society recommends that, if such a house is sold as someone’s main residence, the proceeds should be assessed on the same basis as if the house had not been sold.

It also wants the Fair Deal applicant to be able to keep more than 20 per cent of the rental income should they choose to rent it.

“This, in our view, could potentially release some housing stock,” the society says.

‘Profound negative impact’

It also wants greater consultation on key tax changes in Budget 2019, noting that last year’s decision, to increase the rate of stamp duty on commercial property transactions had a “profound negative impact” on the Irish property market, undermined confidence and created “harmful uncertainty” for property buyers.

“On top of the financial burden this late change caused, it created significant uncertainty in a particularly sensitive market.” said Gavin McGuire, solicitor and chair of the society’s taxation committee.

Now the society wants the Government to introduce a formal technical consultation period between the budget and the Finance Bill, akin to the approach in the UK.

“We believe a similar process would be hugely beneficial, allowing legal practitioners and other expert professionals assist the Oireachtas to achieve its legislative aims,” Mr McGuire said.

The society also wants Government to address the unfair position of qualifying benefits to disabled persons in the case of intestacy, and to address the issue of the Revenue Commissioners, in the event of divorce, not recognising Pension Adjustment Orders.

“The practice discriminates against the second family and runs contrary to the constitutional safeguards granted to divorce,” the society argues.

It also sets out suggestions for improving Ireland as a holding company location.