Press Release - Nursing Homes Support Scheme (Fair Deal)

10 August 2020

A report of the Comptroller and Auditor General in relation to the operation of the Nursing Homes Support Scheme – generally known as Fair Deal – was presented to the Houses of the Oireachtas today.  

The Scheme was established in 2009 to provide financial support to eligible residents towards the cost of their nursing home care.  It is administered by the Health Service Executive (HSE).  The report was undertaken to review the economy and efficiency of the Scheme after its first ten years of operation.  By then, the HSE was providing financial support in respect of just over 23,300 individuals.  The HSE reported that this support amounted to €969 million in 2018, and estimates that an additional €343 million was paid to nursing homes in 2018 in the form of residents’ contributions.

Scope of care provided to residents

In 2009, the Department of Health and the HSE detailed the list of goods and services that constitute care of residents of nursing homes for the purposes of the Scheme.  No review of these components of care has taken place since then. 

Both public and private nursing homes provide or arrange for a range of goods and services not covered by the Scheme charge rate, for example, access to social programmes, hairdressing or transport to appointments.  Based on review of a sample of nursing home contracts of care, it appears that residents of private nursing homes are more likely than those in public nursing homes to incur extra charges for additional goods and services not covered by the Scheme.

Calculation of weekly charge rates for care

Rates charged for care of residents in public and private nursing homes are not determined on the same basis.  Charge rates for public nursing homes are based on prior-period operating costs and bed occupancy levels, whereas rates for private nursing homes are agreed by negotiation.  In 2018, the average charge rate for public nursing homes was €1,564 a week — 62% higher than the average price chargeable for private or voluntary homes at €968 a week.

Budgets are allocated to public nursing homes based on the calculated weekly charge rate. Funding deficits may arise for homes where the occupancy rate is less than expected, or if current operating costs are higher than the prior period costs.  For 2018, additional funding of €23 million was required from other Exchequer resources to meet such deficits.

The Minister for Health has appointed the National Treatment Purchase Fund (NTPF) to negotiate with individual private and voluntary nursing homes the weekly charge rates to be applied to their Fair Deal residents.  The examination found that there is a lack of documented guidelines to support NTPF staff involved in those negotiations.  It was also unclear how criteria set by the NTPF influence the negotiation process and the charge rates arrived at.  A review of the price negotiation system commissioned by the Department has been completed but has not yet been published.

Demand for the Scheme

The Scheme is cash-limited which means that the HSE must restrict access to the Scheme if there is an expectation that the available funding for a specified period will be exhausted.  Applicants approved to participate in the Scheme are consequently put on a national placement list pending funding approval.  Between mid-2015 and early 2019, the average time that applicants spent on the list did not exceed the HSE’s target of four weeks.  However, the maximum waiting time was eight and a half weeks by September 2019, with just over 1,200 people awaiting funding approval.  By the end of 2019, the waiting time had returned to the target maximum of four weeks.

The HSE has short-term arrangements to facilitate the discharge of older persons from an acute hospital to a nursing home place while their Scheme application is pending.  The cost of such ‘transitional’ care was met by the HSE from other budgets.

Assessment of residents’ contributions

Residents of nursing homes supported under the Scheme contribute towards the cost of their nursing home care — paying on average about 30% of the weekly charge.  The contribution amount is based on an assessment by the HSE of their income and assets, including their home.  When an application is made, the applicant (or their representative) is required to provide details of her/his income and assets, and supporting documentary evidence. 

By law, a schedule of assets must be submitted to the HSE on the death of a nursing home resident supported by the Scheme.  In practice, this does not happen in all cases.  Where schedules of assets were received, additional contributions were identified in 10% of cases and where they had been quantified, the average value of the additional liability was €16,100.

Lending to nursing home residents

An optional loan element is part of the Scheme.  This is designed to ensure that a nursing home resident does not have to sell their home or certain other property assets in order to pay for long-term residential care.  Just over 10,600 individuals had availed of the loan element of the Scheme up to December 2018.  The total amount of loan funding advanced at that date was €239 million.

The Revenue Commissioners are responsible for collection of the Scheme loans.  The loan can be repaid at any time, but normally falls due for repayment upon the individual’s death, or on the sale/transfer of the property.   The HSE notifies Revenue of the liability amount when it arises.  The examination found there were some delays in the time taken by the HSE to notify Revenue and the accountable person (e.g. the resident’s executor) of the amount to be recouped.

By the end of December 2018, Revenue had been notified of 5,650 loans worth €114.1 million where it was appropriate to commence recoupment.  By the end of February 2020, Revenue had recovered €105.7 million or 93% in full settlement. A further €1.6 million had been received in partial settlement cases.  Loans to the value of €6.8 million were overdue for repayment.

Notes for Editors

The Comptroller and Auditor General is an independent constitutional officer with responsibility for the audit of public funds. He reports to Dáil Éireann.

The report was signed by the Comptroller and Auditor General on 8 May 2020 and sent to the Minister for Health on 12 May 2020. Under section 11 of the Comptroller and Auditor General (Amendment) Act 1993, the Minister is required to present the report to Dáil Éireann within three months of the date on which the report was submitted to him.

The report does not address the standard of care provided in nursing homes, or the role of the Health Information and Quality Authority in that regard.

The outbreak of the COVID-19 pandemic has created major challenges for the health system including the nursing home sector. Work on this report was substantially completed prior to the outbreak. This report does not consider the risks and uncertainties associated with the pandemic or the likely significant impact on the nursing home sector.

Click on the highlighted link to read the full text of the report on the Nursing Homes Support Scheme.

Enquiries about the report should be directed to Ruth Foley at (01) 863 8618 or pressrelease@audit.gov.ie