The financial burden of paying for nursing home care for the elderly can be a huge drain on a family's finances, writes Caroline Madden

The decision to enter a nursing home is never easy. Leaving behind familiar surroundings and companions and giving up one's independence to go into long-term residential care can be a traumatic upheaval for an elderly person.

Unfortunately, the series of scandals that has emerged - from the illegal charging of public nursing homes residents for almost 30 years to shocking maltreatment in privately run facilities such as Leas Cross - has done little to inspire confidence in the level of care afforded to the most vulnerable members of society.

Quite aside from worries about the level of care one can expect, the financial burden of paying for nursing-home care often compounds the person's distress.

In a perfect world, everyone in need of nursing-home care would be able to take up their entitlement to a bed in a public facility run by the Health Service Executive (HSE). In reality, however, the number of public nursing home beds available - currently 10,153 - falls far short of the numbers requiring long-term care.

So who gets priority? There are no hard and fast rules as to how these limited places are allocated. The HSE carries out a medical and dependency assessment before assigning beds, but anecdotal evidence suggests that only those on a very low income make the cut.

Following the controversy over wrongfully charged residents, legislation has been put in place to allow fees to be levied on almost anyone residing in public long-stay care. Residents who need 24-hour nursing care now face fees of up to €120 a week, which equates to €6,240 a year.

If 24-hour care isn't necessary, the maximum that can be charged is €90 a week, which works out at an annual fee of €4,680. The HSE does have the power, however, to waive these charges if they would cause hardship.

Due to the shortage of public beds, most people are forced to go down the private route, regardless of choice.

They soon discover that the long-stay maintenance charges payable by public patients pale into insignificance when compared to private nursing homes rates.

The latest survey carried out by the Irish Nursing Home Organisation (INHO) shows that the average weekly rate charged by private nursing homes in the Republic has risen from €557 in 2003 to €694 in 2006, more than the average industrial wage.

Of course, rates vary hugely by room type and location. For example, private rooms in the greater Dublin area can cost well in excess of €1,000 a week.

So what can older people do to alleviate this drain on their finances, which can easily top €50,000 a year?

Firstly, anyone paying nursing-home fees should make sure to claim full tax relief on these expenses. Relief is available at the person's higher rate of tax and can be claimed by the individual receiving care or by a family member if they pay the fees on behalf of their relative.

It is also worth investigating whether the person qualifies for the HSE nursing-home subvention. If at all possible, this should be claimed before the person enters the nursing home. Otherwise the HSE may assume that they are able to afford the fees without any State assistance.

Until this year, the rate of subvention paid was based on the elderly person's level of dependency. However, from January 1st, 2007, there is just one maximum weekly subvention rate of €300.

In order to qualify for the subvention, the person must require care in a nursing home and must also pass a means test. Any income received by the person and their spouse in the last 12 months is taken into account, such as salary, pension or investment income.

Assets are also taken into consideration, including the family home (unless the person's spouse or a dependent child still lives there), stocks and shares, valuables and so on.

Don't be tempted to hide assets from the HSE by transferring them to family members or friends. Firstly, any assets disposed of in the last five years can be included in the means assessment and secondly, the HSE can recoup subvention payments if it discovers later that the person didn't fully reveal their financial circumstances.

Self-evidently, on the figures provided, even if a person qualifies for the maximum subvention, it won't even cover half the average weekly cost of nursing home care. The HSE may make enhanced subvention payments on a discretionary basis in addition to the basic subvention, but generally people have to find some way to bridge the gap themselves.

Some rely on contributions from their family, while many more are forced to sell or mortgage their homes. Eamon Timmins of Age Action Ireland says this is a real problem. It's not just selling your home; it's selling all your belongings except what you can carry in a cardboard box. It's very traumatic."

Even the Department of Health admits the subvention system is flawed. The current system of nursing-home support is neither predictable nor sustainable, the department said. People who need care face different costs depending on whether they are in public or private nursing homes.

The department says that the Fair Deal on Nursing Home Care scheme, which is due to replace the subvention system on January 1st next year, aims to remedy the current problems.

Under the Fair Deal scheme, (which will be optional), those in need of nursing home care will pay a maximum of 80 per cent of their income towards the costs and the State will pay the balance.

An extra deferred contribution of up to 15 per cent of the value of their home and other assets may be due after the person's death. Therefore people will no longer be forced to sell their home during their lifetime to pay for nursing home care, the department says.

Will the new scheme actually be fairer and make long-term residential care affordable to all, as the department promises? Timmons is very much against the scheme. The State is going to allow one segment of the population to get free public healthcare under the PRSI system, he argues, while older people will have to pay up to 80 per cent of their income for care. "We believe it is age discrimination," he says.

Another major concern is that staffing levels in private nursing homes in the State do not always meet best international standards.

The Cost of Care report commissioned by Age Action warns: "Unless there are mandatory staffing levels and unless the operator is reimbursed for employing this staffing level, then there will continue to be stories like Leas Cross Nursing Home."