Case study — what nursing care might cost a farmer

Joe is a 72-year-old drystock farmer who owns 80 acres valued at €800,000.

His dwelling is valued at €140,000. Joe has savings to a value of €50,000 and he and his wife have State pensions worth €26,394 per year in total. Joe has been suffering from dementia for some time and now needs nursing home care.

Joe’s son John, 33, is now farming the land and also needs the support of off-farm employment to sustain his young family.

While Joe had always intended to transfer the farm to John before he was 35, he was not to know that his health would fail prematurely and so the urgency of a transfer could not have been foreseen.

Assessment of Assets € Land 800,000

House 140,000 Cash & Shares 50,000 Total Assets 990,000 Less Exempted Amount 72,000 Assessable Assets 918,000 Notional Yield (@7.5%) 68,850

Summary Income

Pensions 26,394 Share dividends 1,300 Assessed Income (80%) 22,155 Combined asset

& income assessment 91,055 Joe’s assessed income 45,502

The assessed income for Joe is €45,502, which will be his contribution towards care. So, if the nursing home is costing €56,000 per year the HSE will only contribute €10,498.

The value of the dwelling will not be included in the means test after three years, which will reduce the family’s contribution by €5,250.

If the promised three-year cap on the farm is finally introduced the family’s contribution will drop to €11,078 after three years, which can be met from Joe’s pension.

The family will be left in a very difficult situation as the savings will run out by the end of the first year and they will not be able to afford €38,617 per year thereafter.

They can apply for the Nursing Home Loan Scheme from the HSE, but who knows how long Joe will live?

And each year he does survive will increase the debt that will have to be repaid when Joe dies.

The sad irony is that the longer Joe lives, the greater the likelihood is that the farm will have to be sold.