The scheme that provides financial assistance to people in need of long-term nursing home care has been hit by ‘extraordinary delays' due to funding cuts, Nursing Homes Ireland (NHI) has said.

According to the organisation that represents private and voluntary nursing homes, as of last week, 2,007 people were waiting for funding under the Fair Deal scheme - a 25% increase since July.

The Fair Deal scheme provides financial assistance to those in need of nursing home care. Under the scheme, a person will make a contribution towards the cost of their care and the State will pay the balance. Essentially, the State will pay the shortfall between what someone can afford to pay and the actual cost of nursing home care.

However, the number of people waiting for funding, and the time they are left waiting for a funding decision, has been steadily increasing this year, NHI said.

It noted that in February of this year, just over 650 people were waiting for an average of 29 days for financial approval. By May, over 1,200 people were waiting, with financial approval taking seven to eight weeks. Last month, the figure was over 1,750, with a 14-week wait. However, this month, that has risen to 2,007, with a 15-week wait.

The chief executive of NHI, Tadhg Daly, pointed to the HSE's latest performance report, which found that 78% of delayed discharges from acute hospitals related to patients who were awaiting nursing home care.

"The knock on effect is much worse than expected and is a direct result of a €35 million reduction to the 2014 Fair Deal Scheme budget. A Department of Health briefing to Minister Leo Varadkar seriously under-estimated the outcome, when it said the reduction in the number of persons being able to access nursing home care ‘will be in the region of approx... 900 people'," he commented.

He said that the cuts to this year's Fair Deal budget have led to a ‘shocking increase' in the number of older people who are having to remain in acute hospitals when it is nursing home care that they require.

In its pre-Budget submission, NHI insisted that Minister Varadkar could ‘deliver reassurance to older people by reversing cuts to the Fair Deal scheme and ensuring that it is adequately funded in the year ahead'.

It also called on the Government to address the long-term projected shortfall in nursing home beds. Research suggests that demand for beds is already exceeding supply in some parts of the country and by 2016, there will be a shortfall of some 4,000 beds.

"To address the long-term projected shortfall in nursing home beds, in addition to adequately funding the Fair Deal Scheme, considerable investment is required to ensure the building of additional nursing home accommodation.

"To support this necessary investment, NHI is calling on the Government to reform the VAT system by introducing a VAT rebate for nursing home expenditure, incurred in a defined period for the construction cost of new nursing homes and the expansion of existing nursing homes," the organisation said.

Budget 2015 will be announced on October 14.