The Fair Deal 3-Year Cap on Farm Assets

For years, farming families faced a frightening asymmetry in the Nursing Homes Support Scheme: the family home was capped at three years of contributions, but the farm was not — and 7.5% a year against a farm’s value could consume a holding. The Nursing Homes Support Scheme (Amendment) Act 2021, in operation since October 2022, extended the 3-year cap to family farms and businesses. The cap is valuable, conditional and frequently misunderstood.

The Scheme in Outline

• Applicants contribute 80% of assessable income and 7.5% per year of the value of assets towards care costs.
• The principal residence is assessed for a maximum of three years — 22.5% in total.
• Since October 2022, family farm and business assets can also be capped at three years, where the statutory conditions are met.
• Contributions based on property can be deferred under the loan provisions, secured by charging order.

The Conditions That Matter

The farm cap is not automatic. A family successor must be appointed and must give a legal undertaking to run the farm for at least six years; the scheme contains recoupment provisions if the commitment is broken. There are conditions around the farming of the asset in the years before the application. And the scheme looks back five years: assets transferred within the five years before applying are generally assessed as if still owned.

The Legal Decisions Inside a Fair Deal Application

Families face several genuinely legal questions: who should be the family successor, and do they understand what the six-year undertaking commits them to; how the charging order under the loan provisions will interact with the will and the intended succession; and whether the older generation’s affairs — including an Enduring Power of Attorney made while capacity remains — are in order so decisions can be made at all. We advise on each of these, and assist with the legal side of applications.