The Nursing Homes Support Scheme Act 2009 (the “Act”) came into operation on 27 October 2009, and certain of its provisions will have significant implications for practitioners involved in drafting Wills for clients.
The Act makes provision for a new system of financial support for those in need of long-term residential care, and the aim of the new legislation is to make nursing homes “accessible, affordable and anxiety free” and replace the former nursing home subvention scheme, which was seen by many as inequitable.
Under the new Scheme, before receiving State support, a financial assessment will be carried out to determine the amount that an individual will need to contribute to their care; that is 80% of their assessable income and 5% of the value of their assets per annum. Where the assets include land and property, this latter contribution may be deferred and collected from their estate, or if the property is sold or transferred in advance. This deferral is known under the legislation as Ancillary State Support and consists of a loan advanced by the State. In exchange, a charge will be registered against the asset. This will have obvious implications for the beneficiaries under the Wills of those receiving the support in that the assets the subject of the charge will under Section 47 of the Succession Act, in the absence of an clear expression to the contrary in the will, be taken subject to the charge.
In addition, the application for Ancillary State Support, the giving of consent to the charging order and related actions must be carried out by a care representative where the person requiring care does not have full capacity to make decisions concerning the matter, and has not appointed an attorney under an enduring power of attorney or been made a ward of court. Potential conflicts of interest are likely to arise where the care representatives are the same persons as those due to benefit from the charged asset under the Scheme.
Practitioners should also be aware of the provisions of Section 27 of the Act which inter alia obliges the personal representatives of the estate of a person who was in receipt of Ancillary State Support to send a copy of the IRA to the HSE and holds the personal representatives personally liable for repayment of the loan if they fail to so notify the HSE and retain sufficient funds to pay off the loan.
The introduction of the new Scheme is an additional issue that should be taken into account in advising clients in respect of their Wills and estate planning, and personal representatives in the administration of estates. Any Wills/Probate instruction checklist/questionnaire should ideally take account of this issue.