Row brewing between Fianna Fáil ministers over Fair Deal scheme 

Housing Minister Darragh O’Brien set to press ahead with slashing tax on rental income earned by nursing home residents despite concerns of Older People's Minister Mary Butler
Row brewing between Fianna Fáil ministers over Fair Deal scheme 

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A row is brewing between Fianna Fáil ministers over the Fair Deal scheme.

Housing Minister Darragh O’Brien is set to ignore the concerns of party colleague and Junior Minister for Older People Mary Butler by cutting tax on income earned by those who rent out their home while in nursing home care.

It is understood Mr O'Brien is now pressing to implement the changes that would see taxes cut completely on rental income by the end of the year.

However, Ms Butler still has "genuine concerns" around such a move, citing elder abuse and premature entry into nursing homes as unintended consequences.

Under Fair Deal, nursing home residents can retain 60% of rental income if it relates to what was their principal residence, with the remaining 40% being assessed. 

As part of a deal hammered out with a number of Independent TDs ahead of a vote on the lifting of the eviction ban earlier this year, Mr O'Brien agreed to address what many say is a disincentive to rent out properties.

It is understood he is now eager to progress the move to slash all tax on rental income when a person enters long-term nursing home care. Mr O'Brien is moving to have the 0% tax rate in place by the end of the year.

However, Ms Butler raised concerns around a further reduction in the level of tax paid and suggested no change should be made.

While those in favour of reducing rental taxes say it will act as an incentive to free up thousands of vacant homes, fewer than 50 homes of people in Fair Deal are currently rented out.

'Genuine concerns'

At Fianna Fáil's think-in, Ms Butler said: "I do have genuine concerns. I always did and my opinion hasn't changed.

"People, when they go into a nursing home, don't want to pack up all their belongings the same day and rent out their house

What we do know is that the amount of people that rent out rooms where they are in nursing homes is minimal. It's really, really a small amount of people."

She added: "If we are going to make any changes, we have to make sure that those concerns are not there."

A review of how people availing of Fair Deal are taxed and assessed was commissioned by Ms Butler and has now been completed.

It is understood the review suggests the current tax arrangement should remain in place.

A spokesperson said the completed review will now be presented to Health Minister Stephen Donnelly for consideration.

"After this review, the Minister for Health, in consultation with the Minister for Public Expenditure and Reform and the Minister for Housing, Local Government and Heritage, is required to produce a report setting out the findings and conclusions.

"Then the Government, at the request of the Minister for Health and the Minister for Housing, Heritage and Local Government, may make an order to modify the assessment of the eligible rental income," the spokesperson said.

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