New funding model needed for eldercare

Kringvarp Føroya reports that the Ministry of Finance and the Association of Municipalities have appointed a working group to examine how eldercare can be funded in the coming years.

The group is expected to submit its recommendations in November.

The current funding model, which is more than 10 years old, cannot cover the rising costs of eldercare in the years ahead. The problem is that pension tax, which has funded most of the sector, is no longer continuing to grow now that the mandatory pension contribution has reached 12 percent.

According to the Association of Municipalities’ latest annual report, the municipalities collectively received 636 million kroner in pension tax revenue last year. Reimbursements relating to DIS, FAS, fishermen’s deductions and foreign deductions amounted to 103 million kroner.