European Observatory on Health Systems and Policies


Health Systems in Transition (HiT) profile of Ireland

3.3 Revenue collection/sources of funds

Looking at Fig3.5, it is clear that the Irish health system is primarily financed through general taxation, supplemented by an earmarked “health contribution” collected alongside the PRSI11 and along with out-of-pocket payments towards the costs of some services. Expenditure on health via the social insurance component of PRSI is minimal. The DSFA, through the Treatment Benefit Scheme, linked to the payment of health contributions (see Subsection Health care benefits, within Section 3.2 Population coverage and basis for entitlement), accounted for €91.6 million of public sector health expenditure in 2007. Private health insurance, which has both complementary and supplemental elements, accounted for just 8% of total health expenditure in 2006. Public funding for capital projects is largely derived from general government revenue, supplemented by a small contribution from the national lottery (Table3.1b).

Table3.8 provides trend data on sources of public sector current health expenditure between 1980 and 2007. When focusing on the public sector alone, it is clear that the contribution of general taxation to public health expenditure decreased from 92% in 1980 and reached a low of 80.6% in the year 2000. Funding received from the European Social Fund also ended in 1999. This decline in reliance on exchequer revenue was offset by an increase in the use of charges for public health services in 1987 (see Subsection Out-of-pocket payments, within Section 3.3 Revenue collection/sources of funds). In contrast, between 2000 and 2003 much of the additional investment in public health services was funded through general taxation.

Since 2003, the share of public sector current health expenditure from general taxation has declined. This is, in part, an artefact of the transition to two separate budgets for the DoHC and the HSE. As Table3.9 indicates, revenue from charges for private and semi-private hospital care and receipts related to superannuation were not included as appropriations in the DoHC health vote in 2003, although an appendix to the Budget indicates that €166 million in charges, as well as a further €168 million in other unspecified income were also raised (Government of Ireland, 2004b). Moreover, from 2006, the Office of the Minister for Children, covering a large proportion of non-health child welfare services, was allocated its own separate budget, having previously been part of the DoHC budget. There also has been an increase in revenue from the EU Member States as part of reciprocal arrangements for the use of health services; this reflects the general increase in EU visitors to Ireland and accounts for between 3% and 4% of public health expenditure at the time of writing.

11 The PRSI contribution is made up of a number of different components including: i) social insurance payable by the employee and employer at the appropriate percentage rate (the rate varies according to the earnings of the employee and reflects the benefits for which the person is insured); ii) a 2–2.5% Health Contribution, payable by the employee (where applicable); iii) 0.70% National Training Fund Levy.

3.3.1 Compulsory sources of financing

More than three quarters of all funds for the public health care system come from non-earmarked general taxation collected at the national level; in total, net receipts from all sources of taxation in 2007 were in excess of €47.5 billion. VAT (31%), Income Tax (29%), Corporation Tax (13%) and Excise Duty (13%) account for 86% of total net tax receipts. The remainder is made up of customs, agricultural levies, capital gains and acquisitions, and stamp duty on property sales (Office of the Revenue Commissioners, 2008). Some excise duties levied on tobacco products are earmarked for health and allocated to the HSE budget; this amounted to €167 million in 2007.

The basic rate of income tax in 2007 was 20%, with an upper rate of 41% for remaining income depending on personal status (Table3.10). Credits offset against tax also vary according to personal circumstances. In the case of those over the age of 65 years, such credits are substantial, being €38 000 per annum for a married couple compared with €10 420 for a married couple of working age. The tax credit for an individual in 2007 was €5210. There are two rates of VAT – 13.5% and 21% – which are applicable depending on the product or service. Many privately purchased health-related products and procedures, including much medical equipment, hearing aids, cosmetic surgery and the services of most medical professionals including dentists and opticians are exempt from this charge. Others, such as glasses and contact lenses, and occupational health services, are charged at a rate of 21% (Office of the Revenue Commissioners, 2007).

PRSI health contributions

As part of the PRSI most employers and employees pay a small earmarked “health contribution” which is allocated directly to the HSE. Funds raised through health contributions are not insignificant – they accounted for more than 10% of gross current health expenditure in 2006. At the time of writing, this is paid at a rate of 2.5% on all earnings over €100 100 and 2% on all earnings below this level, with the exception of individuals with a Medical Card, as well as all those whose gross earnings are less than €500 per week.

3.3.2 Voluntary health insurance

A total of 51.2% of the Irish population – 2.245 million people – had some form of private insurance coverage at 31 December 2007. Total premium income has risen from €821.9 million in 2002 to €1 477.8 million in 2007 (HIA, 2008). All health insurance premiums are tax deductible at source at the standard income tax rate of 20%.

Private health insurance fulfils two roles in Ireland: first, it acts as a complement to the public health system, providing coverage against charges levied on non-Medical Card holders for inpatient bed use, together with a more limited reimbursement of some out-of-pocket charges in the primary care sector. The overwhelming majority of individuals with private health insurance would otherwise have to pay these charges. A consumer survey undertaken for the HIA in 2005 found that 14% of adults with either a Medical Card or GP Visit Card also had private health insurance (Insight Statistical Consulting, 2008). Second, private health insurance fulfils a supplemental role to the public system, as subscribers can bypass waiting lists for inpatient services by obtaining a private bed and consultant treatment within a public hospital or undergo full treatment in a private facility. All health insurance schemes operate on the basis of open enrolment with lifetime cover and community rating, whereby everyone – regardless of age or health status – is charged the same premium for the same insurance package.

By far the largest provider of insurance is VHI Healthcare (commonly known as “the VHI”). This was established under the 1957 Voluntary Health Insurance Act, as a non-profit-making, semi-state private insurance body. The primary concern at the time was ensuring that the 15% of the population not then covered by the State for hospital services would have the opportunity to buy private health insurance against this risk if they so chose.

Until the mid-1990s, VHI operated as a virtual monopoly. The only competition came from “restricted schemes”, open only to employees of various professions and their families. In September 2006, 11 such schemes were in operation, covering 2.6% of the population (93 900 members). These included the Electricity Supply Board Staff Medical Provident Fund, with approximately 30 000 members. The two other principal schemes serve the Police (St Pauls Garda Medical Aid Society) and prison staff (Prison Officers Medical Aid Society).

With the emergence of the European single market in the mid-1990s, the Irish Government was required to open up the market for health insurance and allow free competition. This was achieved under the Health Insurance Act of 1994. BUPA Ireland entered the market in 1997, operating until 2007 when it withdrew and its business was taken over by QUINN-healthcare (see later). A third player, the private health insurance company Vivas, entered the market in October 2004. In September 2006, “the VHI” had more than 1.5 million members, giving it a 75% share of the open enrolment health insurance market. BUPA Ireland (now QUINN-healthcare) had 459 000 members (22.2% of the market) and Vivas12 57 000 (2.8%) (HIA, 2007a). As Fig 3.6 illustrates, private health insurance enrolment has grown steadily since the early 1970s. Two significant upward shifts in insurance coverage can be observed: in 1988, following the introduction of daily charges for all inpatient beds in public hospitals in 1987; and in 1997, following the entry of BUPA Ireland into the market.

Work-based group schemes, under which employers deduct health insurance premiums for employees directly from their salaries, are a major feature of private health insurance in Ireland. In a consumer survey in 2005 this accounted for 45% (compared with 49% in 2002) of all private health insurance (Insight Statistical Consulting, 2005). VHI Healthcare traditionally gave a discount (of 10%, when the Health Insurance Act was passed in 1994) for members who joined as part of a group scheme. This 10% group scheme discount was incorporated into legislation as the maximum discount that could be offered on an adult health insurance premium. However, as all three insurers now offer the 10% discount to members who join online, there is effectively no difference in price between the individual and group schemes. Approximately one quarter of those participating in work-based schemes benefit from their employer paying all or part of the health insurance policy premium (HIA, 2007a).


All open enrolment private health insurance plans in Ireland, other than those that solely cover public hospital inpatient daily charges or ancillary health services, must comply with the 1996 Minimum Benefit Regulations. These specify in detail minimum levels of monetary payment that must be covered in terms of hospital charges (inpatient and day-patient services), hospital charges relating to special procedures, consultants’ fees (inpatient and day-patient services) and hospital charges and consultants’ fees (outpatient services) (Office of the Attorney General, 1996).

A range of schemes are offered by the three insurers, all of which as standard provide cover for a semi-private room (that is, a room with up to five beds) and most also cover a private room in a public hospital.13 The HIA regularly collates and updates information on the different plans and publishes it on its web site. As of 10 October 2007, the cost per month, based on the adult group rate (after tax relief) for the most basic of plans of the three insurers was €27.61 for QUINN-healthcare’s “Essential Scheme”; €27.66 for Vivas Health’s “Me Level 1”; and €38.59 for VHI Healthcare’s “Plan A”. The lowest-cost plans of the three providers, which also cover in full a semi-private room in a private hospital (excluding the high-tech Blackrock Clinic, Mater Private, Galway Clinic and the Beacon Hospital), are €43.74 for QUINN-healthcare’s “Essential Plus”; €43.13 for the Vivas “Me Level 2”; and €55.39 for VHI Healthcare’s “Plan B”. The most expensive plans cover in full a private room in one of the high-tech private hospitals and have monthly premiums of €150.40, €153.50 and €169.63 for QUINN-healthcare, Vivas and VHI Healthcare, respectively. The basic plans of all three insurers cover in full the inpatient fees of participating consultants (in excess of 90% of all working consultants).

All three insurers also provide time-limited cover for hospitals stays for a range of mental health and stress-related problems, including 100–180 days of inpatient psychiatric treatment per annum and 91 days of inpatient care for alcohol and substance abuse problems in any 5-year period. All plans provide emergency overseas cover of a minimum ranging between €50 000 and €65 000 per annum in hospital costs, as well as covering repatriation costs where necessary. All schemes provide a number of maternity benefits. These include between €830 and €860 in assistance with doctors’ fees while in hospital, as well as between €2000 and €3500 towards the cost of private hospital accommodation or assistance with home births.

Differing degrees of outpatient cover are provided by the various plans. These benefits are very limited under the basic plans of all three insurers and are subject to payment of an excess. For instance, benefits under the Vivas “Me Level 1” plan include up to €55 per consultant visit, plus up to €450 for emergency dental care, while magnetic resonance imaging (MRI) and computerized tomography (CT) scans are fully covered in approved treatment centres. Also covered is €30 per GP, dentist and physiotherapist visit (up to three times per year for each benefit). An excess of €150 applies to this plan. Similarly, some of the benefits under QUINN-healthcare’s Essential scheme include free MRI, CT and positron emission tomography (PET) scans, mammograms, DEXA scanning (for osteoporosis), breast and colon screening, as well as emergency dental care related to accidental external impact of up to €510 per annum. The plan also provides coverage towards outpatient consultant fees (up to €51 per consultation); a small amount of support for other outpatient and primary care services; and coverage towards further services, including €20 per GP visit, up to €25 per annum for dental consultations, and optical cover of up to €20 per annum. An excess of €250 applies to the plan. VHI’s most basic plan does not provide any outpatient or primary care coverage, but its “First Plan” Levels 1 and 2, which cost €44.80 and €50.43 per month, respectively, provide benefits of €20 and €30 for up to 25 visits per year for GP, dentist and physiotherapist visits and for up to 12 visits a year for complementary and alternative therapists (including dieticians, speech and language therapists, and chiropractors). Optical costs of up to €55 or €100 every two years are also covered, along with outpatient consultant expenses of up to €60 and €75 for up to 25 visits per annum. An excess of €1 applies to these VHI plans.

Dental insurance

As indicated, coverage for dental care is very limited under most plans. VHI is still the only one of the three principal private health insurers to offer a separate dental insurance plan. VHI DeCare Dental covers up to 70% of dental charges annually for less than €16 per month for an adult, or less than €7 per month for a child. It covers 100% of yearly exams and cleaning; 70% of costs for fillings, space maintainers, sealants, extractions and treatment of gum disease; 50% of costs for crowns, root canal treatment and many other major dental services; 25% of costs for dentures and one emergency dental care session worldwide per annum. There is an annual limit on coverage of €500 for crown treatment (subject to excess of €100) and €1000 for other dental services (VHI Healthcare, 2007b).

Other health-related insurance products

A consumer survey in 2005 indicates that more than 20% of the population have chosen to purchase other private health insurance-related products (Insight Statistical Consulting, 2005). These include hospital cash plans which may pay out a fixed amount for each day in hospital to help offset daily hospital bed charges, while some also pay compensation related to loss of earnings during illness and/or include limited cash payments towards the costs of primary care services such as GP visits, or visits to dentists, opticians, health screening, and so on. Approximately 21% of people with private health insurance also hold hospital cash plans, reflecting the fact that they are considered as a complement to, rather than a substitute for, private health insurance (HIA, 2007a).

Another product available is critical illness cover, which pays out a tax-free lump-sum cash payment if the subscriber is diagnosed with a specific illness or disability covered by the policy (for example, cancer, stroke and other serious conditions) to help offset any long-term disability costs. Most of these plans are purchased as a supplement to life assurance or mortgage protection policies. They act as a complement to private health insurance and approximately one third of those with private health insurance also have these plans (Insight Statistical Consulting, 2005).

A total of 31% of people with private health insurance also have income protection insurance (Insight Statistical Consulting, 2005). This provides a guaranteed income for individuals in the event that they are unable to work because of poor health but does not provide cover for private medical services.

Competition, risk equalization and the Irish insurance market

The 1994 Health Insurance Act, which opened up the insurance market to competition, required that products offered by any new insurance provider had to be consistent with the existing conditions of community rating, open enrolment and lifetime cover. Thus, competition would be based on the differences in the package of benefits offered (over and above Minimum Benefit Requirements) and differences in premium rate(s). The Act also provided for the introduction of a risk-equalization mechanism, if the Government determined this to be necessary. This is a mechanism for dealing with differences in health insurance companies’ costs due to differences in the risk profiles of their subscribers. Essentially, companies who have healthier-than-average subscriber profiles would be required to make a cash transfer to those companies whose subscribers have worse-than-average health risk profiles.

The potential and actual use of risk equalization has proved to be highly contentious, particularly as the legal status of the VHI and its subscriber profile of substantially older policy holders would enable it to benefit financially from any risk-equalization scheme. The Government’s proposal stated that if the difference in risk profiles between insurers was between 2% and 10% then the scheme could be enacted by the Minister of Health if it were recommended by the HIA. Where differences were greater than 10% the scheme would be enacted by the Minister after consultation with the HIA, unless there were compelling reasons for not doing so. A formula for transfers developed by the HIA would take account of age, gender and health status. This approach to the risk-equalization scheme has been the subject of a number of legal challenges at the EU level. BUPA argued that any transfers of funds to the semi-state organization (the VHI) would constitute a form of state aid. However, in 2003 the European Commission (EC) concluded that for Ireland’s risk-equalization scheme this was not the case (EC, 2003).

In December 2005 the Government announced that risk equalization would be introduced from 1 January 2006. In December 2006, following the High Court judgement, BUPA Ireland announced its staged withdrawal from the Irish health insurance market, stating that the payments it was required to make under the risk-equalization scheme were already costing more than €1 million a week, and that the €161 million it would be required to pay to the VHI over the next three years would far exceed its estimated surplus of €64 million (BUPA Ireland, 2006). Its business was bought by the Quinn Group in April 2007. Meantime the Health Insurance (Amendment) Act in February 2007 removed the 3-year exemption from risk equalization for new entrants into the market. In response to several reports on this issue (Barrington, Creedon & Dowling, 2007; Competition Authority, 2007; HIA, 2007b), the Government approved a number of reform measures in April 2007, aimed at expediting the creation of a level playing field in the health insurance market and introducing pro-consumer measures to facilitate choice between insurers (Harney, 2007b).

Both BUPA Ireland and QUINN-healthcare, in four separate legal proceedings, challenged the legality of the risk-equalization scheme. Initially, BUPA claimed that the scheme would make competition unworkable (BUPA Ireland, 2006) and although this was dismissed by the High Court in November 2006, BUPA lodged an appeal to the Irish Supreme Court, to be heard in 2008.14 At the European level, BUPA also challenged a decision by the EC that the Irish risk-equalization scheme does not constitute a state aid. In February 2008 the European Court of First Instance dismissed BUPA’s claim stating that “such a mechanism [as the Irish risk-equalization scheme] is a necessary and proportionate means of compensating the insurers required to cover, at the same price, all persons living in Ireland, independently of their state of health”.

The VHI is to become a conventional insurer authorized by the Financial Regulator by the end of 2008; at this time, it will also have to fulfil the solvency requirements for insurers. Legislation is being introduced to ensure that the VHI establishes subsidiaries to operate its ancillary activities, including travel insurance and health care clinics. This legislation will remove the final powers of the Minister of Health over product development and pricing.

The Government also agreed to implement immediately the various pro-consumer measures outlined in the Barrington Group report that did not require legislation. These included providing health insurance customers with clear statements of consumers’ rights and standardized premiums renewal notices; requesting companies with payroll deduction schemes to offer at least two companies’ products to employees; and having group schemes put out to tender on a regular basis. The waiting periods imposed on older people at the time of writing were also to be reviewed to ensure that they comply with equality legislation. In response to the Barrington Group report and in order to encourage competition, the Health Insurance (Amendment) Act of 2007 allowed risk-equalization payments to be discounted by 20%. There will also be consultation on draft regulations for Lifetime Community Ratings to encourage individuals to enter the market at a younger age. Such consultation will consider defining what level of health insurance should be subject to community rating (Harney, 2007b). Finally, the HIA stated that it would explore the feasibility of introducing a prospective risk-equalization scheme. The Government continues to have an open mind over the future ownership status of the VHI.

12 On 15 May 2008 Vivas was acquired by Hibernian, Ireland’s largest insurer. The company began trading under a new name Hibernian Health in July 2008.

13 Restricted schemes provide fewer options but offer broadly similar plans to those offered in open enrolment schemes. Those enrolled in restricted schemes are free to opt out and join open schemes.

14 At the time of writing (July 2008) the Supreme Court announced that it had ruled in favour of BUPA and concluded that the risk-equalization scheme for health insurance is based on a wrong interpretation of the law and should be set aside. The long-term implications of the ruling remain unclear, with the DoHC stating that it would seek legal advice which would take some time.

The Irish private health insurance market is now underpinned by the principle of lifetime community rating rather than just community rating (where everybody is charged the same premium for a health insurance plan irrespective of their gender or health status). From 1 May 2015, there will be late entry loadings for those who join over the age of 35. The purpose of this initiative is to encourage people to purchase private health insurance at a younger age so as to keep the health insurance market sustainable by spreading the costs of older, less healthy people across the market.

3.3.3 Out-of-pocket payments

Out-of-pocket payments for services form an important element of health care funding in Ireland, accounting for approximately 13% of all health care costs (OECD, 2007b). As mentioned in Section 3.2 Population coverage and basis for entitlement, Medical Card holders are entitled to all GP care, dental and optometrist/ophthalmic services (including sight tests), pharmaceuticals, medical appliances and care in a public hospital ward without charge. Individuals and their families with Category II status have to pay out of pocket for GP services (unless they qualify for a GP Visit Card) and for pharmaceuticals up to a maximum ceiling of €90 per month (see Subsection Health care benefits, within Section 3.2 Population coverage and basis for entitlement). They also have to pay privately for dental and ophthalmic services, although some help for these costs may be available via the Treatment Benefits Scheme.

While a large proportion of people also hold VHI to cover the cost of services not provided free of charge by the State, insurance policies only provide limited coverage for primary care and lifestyle interventions. For example, there are no set charges for GP services and these will vary; fees may be between €50 and €80 per visit. Private health insurance plans typically only offer payouts of between €20 and €30 for each GP visit (often up to a specified annual limit), leaving the patient to pay the difference out of pocket. Some services are not covered at all under the health system, such as in vitro fertilization, and must be paid for out of pocket (see Section 3.2 Population coverage and basis for entitlement).

Hospital charges

For individuals without a Medical Card, a charge of €66 (at 1 January 2008) per day is levied for inpatient or day care at a public hospital, subject to a maximum ceiling of €660 in any year. A charge of €66 is also levied for attendance at a hospital A&E department without a referral letter from a GP. Exemptions exist for those subsequently admitted to hospital to receive treatment for prescribed infectious diseases, to utilize maternity services, or who are under six weeks of age, referred by child health clinics or by school health examinations. This charge is also not levied for subsequent visits for the same condition. As long as a patient obtains a referral for inpatient and outpatient services, no charges are levied for diagnostic tests such as X-rays, laboratory tests and exercise tests. Patients being treated in private or semi-private beds have to pay significantly higher daily charges (Table3.11); they also have to pay consultant fees, although in practice most private patients have private health insurance to cover the cost of accommodation and consultant fees.

Long term care charges

New arrangements relating to charges for people residing in public long-stay care homes were introduced by the HSE in July 2005. These charges generally apply to all individuals, including Medical Card holders, although there are exemptions for people under 18, women receiving maternity services, individuals involuntarily detained under mental health legislation and people who contracted hepatitis C as a result of infected blood products or transfusions in Ireland.

The Health (Charges for Inpatient Services) Regulations of 2005 provide for different charging arrangements, depending on the level of nursing care. For those in premises where nursing care is provided on a 24-hour basis, the maximum weekly charge for care is €120, or the person’s weekly income minus €35, whichever amount is lower. The second group consists of those receiving inpatient services in premises where nursing care is not provided on a 24-hour basis. In these facilities the maximum weekly charge is €90, or the person’s weekly income minus €55, or 60% of the person’s weekly income, whichever of the three calculations is the lowest. While everyone must be able to keep at least €35 of their weekly income, the HSE may also reduce or waive a charge imposed on a person in order to avoid undue hardship.

There is only a limited supply of HSE-owned long-term care facilities; this means that many individuals have to find long-term care within the private sector, with a small number of private care homes also being contracted by the public sector. The 1990 Health (Nursing Homes) Act ensured that all individuals in private nursing homes would be eligible to apply for means-tested subventions towards the costs of their care. Prior to the establishment of the Act, subventions were only available in “approved” private nursing homes, and approvals had been restricted not on the grounds of quality but rather due to fiscal constraints. Subventions do not cover all the costs of places in private nursing homes and are subject to means-testing, taking into account assets such as savings, property, life assurance and shares, as well as income. Assets disposed of in the five years prior to applying for the subvention may also be taken into account. Private residences are not taken into account if a spouse, relative registered with a disability, or child – aged under 21 years or in full-time education – still resides in the household. The HSE may, at its discretion, refuse to pay any subvention if an individual’s assets exceed €36 000 or if their principal residence is valued at more than €500 000 in Dublin (or €365 000 elsewhere) and their annual income is not less than €10 400. The Nursing Homes (Subvention) Amendment Regulations of 1998 removed the assessment of children’s ability to contribute towards the cost of care of a parent. Tax relief is also available on payments for nursing care.

Until 31 December 2006 there were three rates of subvention depending on the level of dependency. These have been replaced by one maximum weekly rate set at €300. However, higher “enhanced” payments can be made, in circumstances in which even with the maximum subvention the individual cannot make up the shortfall in the costs of their care. They are made at the discretion of local health offices of the HSE. In some circumstances this could mean that the HSE will meet all the costs of care.

Repayment for illegal charges

Prior to 2005, patients holding Medical Cards were charged not only for the “hotel” costs but also for the medical costs of inpatient services. This was in spite of a legal judgement in 1976 (Maud McInerney, a Ward of Court (1976–7) ILRM 229) which made clear that charges for people with “full eligibility”, that is, Medical Card holders, should only be for shelter and maintenance. Long-term nursing care charges, according to the Health (Charges for Inpatient Services) Regulations of 1976 (SI No.180/1976), were only to be levied on those individuals who did not have Medical Cards. At the time there were concerns about the impact of the McInerney judgement on Health Board finances. A Department of Health circular (Circular 7/76) invited Health Board CEOs to regard Medical Card holders as “not coming within the definition of ‘full eligibility’ once they were being maintained in an institution where the services provided include ‘medical and surgical services of a general practitioner kind’”. This practice, according to an independent report by John Travers into long-stay charges, was to “ensure that persons who had been accorded the status of ‘full eligibility’ before entering a Health Board long-stay care institution became subject to charges once they had become long-stay care patients of the institutions and in receipt of ‘inpatient services’” (Travers, 2005). Thus, individuals had their Medical Cards withdrawn and were charged for services, contrary to repeated advice by the Legal Advisor to the Department of Health (Travers, 2005). The situation became even more acute after Medical Cards were extended to all those aged over 70 years in 2001, regardless of income; yet, Health Boards continued to withdraw Medical Card status. Finally, in 2004 the DoHC sought legal advice from the Attorney General who ruled that the imposition of such charges on Medical Card holders was indeed outside the scope of existing legislation.

The Health (Amendment) Bill 2004 was intended to provide a statutory basis for the imposition of charges on those to whom inpatient services were being provided in public long-stay institutions. The legislation also deemed that it was lawful to retrospectively levy an (additional) charge for long-stay care received prior to the enactment of its provisions. The Bill was subsequently referred to the Supreme Court by the President to determine its constitutionality in December 2004 and the Court found the legislation to be unconstitutional in part, namely in terms of the provisions which sought to retrospectively legitimize payments for long-term care. The provisions that provided for prospective charging of inpatients were found to be lawful. The ruling thus indicated that the Government should pay back to patients any retrospective charges it had required them to pay. The Court did not consider that exposing the State to such repayment obligations would constitute an extreme financial crisis or cause a fundamental disequilibrium on public finances. However, the Court indicated that the State had available to it a defence of the Statute of Limitations, that is, a 6-year limit (which the Government has utilized). A repayment scheme was launched in May 2005, which it was estimated would benefit 20 000 people still alive and a further 40 000 to 50 000 estates at what was thought initially to be a cost of €1 billion (DoHC, 2005b). This was subsequently revised downwards to approximately €420 million.

Reform of long-term care charging

In January 2008, a new way of accessing and charging for long-term care in Ireland was due to come into effect, although this was subsequently delayed. This proposed new system, “Fair Deal on Nursing Home Care”, was announced in December 2006 by the Minister of Health, acknowledging certain problems with the current system. The Minister recognized that individuals on the same income can end up with vastly different health care costs and that, even with subventions, the cost of private nursing home care is unaffordable for many; some family members pay as much as €35 000 per annum for a parent’s care. The Minister cited one of the worst aspects of the system as the imputed 5% income from the value of an individual’s home that is taken into account in the assessment of means as this cannot be translated into disposable income (Harney, 2006).

The new system is intended to be “clear, fair, uniform and anxiety free.” It is to end the difference in support between those in private and public beds, as well as ensuring that a) contributions are clearly based on an assessment of means and assets by the HSE, and b) that these contributions will always be below disposable income. Only those with high dependency needs will be eligible for nursing home care; others will be eligible for community care with support through home help packages.

Under the new system, older people will contribute no more than 80% of their disposable income towards the costs of care. There will be no need for family members to voluntarily contribute towards the costs of care; instead, a charge will be made against the older person’s home to a maximum of 15% of its value. If a spouse lives in the house this is reduced to 7.5%; in all cases the charge is deferred until an individual’s and their spouse’s estate is settled. Moreover, unlike the system at the time of writing, in which 5% of the value of one’s house must be contributed in cash for every year of residence in a nursing home, under the new system charges made against property will not be made after three years, regardless of how long someone will be in a nursing home. This, it is claimed, will mean that in future no one will have to (re-)mortgage or sell their homes. At the time of writing, it is unclear when legislation detailing the new system will be introduced.

Charges for social care services

Access to social services in Ireland is means-tested, and individuals may have to contribute towards the costs of services, such as home helps or meals-on-wheels.