The default position
A farm or business is an asset like any other: 7.5% of its value a year (3.75% for a couple), with no three-year cap, for as long as the person is in care. On a farm valued at €800,000 that is €60,000 a year, or roughly €1,150 a week, which will exceed the fee of most nursing homes. The applicant would then pay the full fee and receive no State support.
The three-year cap for farms and businesses
The cap can be extended to a farm or business where a family successor has been appointed and commits to running it for at least six years. If that is in place, the farm is counted for three years only, capped at 22.5% of its value. The application for the cap is separate from the main Fair Deal application and needs its own evidence: who the successor is, their relationship, and their commitment.
The five-year rule and transfers
Transferring the farm to a son or daughter more than five years before applying takes it out of the assessment entirely. Transferring it within five years does not. This is why farm families are advised to plan succession well before care is needed, and why a solicitor and accountant should be involved.
Land that is rented out
Rental income from land is counted as income. The land itself is counted as an asset. A farm that is leased out rather than run by a successor does not qualify for the cap.
Questions families ask
Does the successor have to be a child?
The rules allow certain family members. Check the current list with the HSE or a solicitor before relying on it.
What if the farm is already in a company?
Company shares are an asset and are valued accordingly. Take advice.
Can we apply for the cap after Fair Deal is approved?
It should be applied for at the same time. The HSE can only apply it from the date it is granted.