Later today the House will debate Report Stage of the Health (Nursing Homes) (Amendment) Bill 2006. My colleague, Deputy Twomey, has consistently raised the concern about certain provisions in this Bill which will require the Health Service Executive to take into account 5% of the value of an applicant's house when he or she is applying for nursing home subvention. I understand this rule is being put into primary legislation for the first time and it is the cause of considerable concern to a great number of elderly people, many of whom are frail and vulnerable.

Yesterday I noted the comments of Age Action Ireland that the application of the rule would effectively force many elderly people to dispose of the family home. The Taoiseach is only too well aware of the value of the family in our Constitution and the family home is part of that social bond. In the past decade the country has seen dramatic increases in house prices. For instance, the average price of a modest, average house in 2006 is approximately €300,000 compared to approximately €75,000 to €76,000 ten years ago.

The rule allows the HSE to calculate what it considers a notional income of 5% of the market value of the house. That means someone looking for nursing home subvention and living in a modest, average house would have a notional income assessed at over €15,000. The Taoiseach will be well aware that notional income, together with an old age pension, would see a person fail to qualify for subvention and, as a consequence, be forced to sell the home. The trouble is that one cannot buy anything with a notional income. One cannot buy groceries in Tesco, Dunnes Stores or elsewhere with a notional income, but the HSE can use it as a method to deprive a person of subvention for a nursing home.

Given the concern and the fact that this is causing anxiety to a great number of elderly people, is the Taoiseach prepared to withhold the section of the Bill dealing with the 5% notional income assessment until its implications can be thoroughly reviewed?

The subvention scheme is provided for under the Nursing Homes (Subvention) Regulations 1993, as amended. When carrying out a financial assessment for the purpose of subvention, 5% of the imputed value of the person's principal private residence is taken into account. There are exceptions, for example, where the house is occupied by a spouse, a child under the age of 21 or a person in receipt of certain social welfare payments.

The Health (Nursing Homes) (Amendment) Bill of 2006 is designed simply to put the current subvention scheme on a sound legal footing. It proposes no changes to the financial assessment process that currently operates. The position is that the HSE may make that assessment, which is the way it has been over the years. The Bill provides that the HSE, with discretion, can refuse to pay a subvention if the value of the applicant's assets exceeds a certain threshold or if the value of his or her principal residence exceeds €500,000 in, or €300,000 outside, Dublin. The limits were raised substantially, from €95,000 to €500,000, this year. This does not represent any change from the current practice.

The Government agreed on a number of principles contained in the report of the interdepartmental group on long-term care, which are reflected in the social partnership agreement, Towards 2016. Advanced discussions are being held to draw up proposals for a new policy on long-term care. I saw the newspaper article and the cases made, but this legislation aims to put on a sound legal footing what has been happening in practice for the past number of years.

I am sure the Taoiseach does not want a situation to arise where he and his Government are accused of forcing people to sell their family homes. This was part of regulation. Did I understand the Taoiseach correctly when he said that the HSE will still retain the right to exercise discretion towards a person in individual cases? He said that the HSE would have the discretion to refuse a subvention. Does that mean that the HSE will also have the discretion to approve a subvention, even in a case where the notional income is in excess of the 5% limit?

In the case of a person in a Dublin suburb, with a very average house, with children living in Derry, Belfast or Cork, the tradition would have been that those visiting their mother or father at the weekend would stay in the family home. However, the average assessment, notionally, of the value of a house in Dublin would now be well in excess of the limit for subvention. Therefore, the use of the family home to provide an income stream to pay for care will deprive the family of the benefit of having the social bond of being able to return to the family home at weekends. I ask the Taoiseach to clarify the situation in that regard.

The Bill proposes that there will be an appeals mechanism set out. We do not know what that mechanism is, although I see the Minister for Health and Children is telling the Taoiseach now. We have not seen the details of that mechanism. This is a matter of very serious concern to a great number of elderly people. They do not want, under any circumstances, to be forced to sell the family home, if their families could find alternative means. What is the situation in this regard? There is no appeals mechanism obvious to us and the implications of this should be teased out more fully. By enshrining the 5% in primary law, the Government is giving vent to a great deal of angst, frustration and genuine fear among a great number of people. I ask the Taoiseach to clarify the situation, in light of enormous increases in house values in the recent years.

The value of the household under the regulations was €95,000 up to last December. The limit has been increased from €95,000 to €300,000 outside, and €500,000 inside, Dublin, which is a substantial increase. Deputy Kenny asked if the HSE has discretion in this area. The answer is that the HSE may, in either case, use discretion. If there is somebody living in the residence, for example, a spouse or child, the HSE has discretion. The Deputy is correct in that I said the HSE has the discretion to refuse to pay a subvention, but it can work either way.

The Bill is simply putting the current subvention scheme on a sound legal footing. It proposes no changes to the financial assessment process currently in operation. We had many discussions on this issue during the social partnership negotiations late last year and earlier this year. Advanced discussions are being held to help draw up proposals for a new policy on long-term care, based on the principles endorsed by the Government and the social partners. These include appropriate and equitable levels of co-payments by care recipients based on a national standardised financial assessment. The aim is to achieve an equitable, balanced scheme, for residential and community care and for public and private provision.

That ongoing work was commenced under social partnership talks and we must now take it forward. We have been examining a number of models, suggestions and analyses of how this can best be done. That work is not yet complete, but it is our intention to bring forward proposals for a new policy for long-term care.