The 'Fair Deal' nursing home scheme which provides care to around 22,600 people in public and private nurisng homes appears to be in crisis this evening.

Minister for Health Dr James Reilly has been informed by officials that there is no further funding available beyond the current number of old people covered under the scheme, which was introduced in October 2009.

A spokesperson for the Minister has said he is 'seriously concerned' that a situation has arisen so early in the year that a funding problem has arisen, which he became aware of in recent days.

Mr Reilly has asked the HSE and Department of Health officials to prepare proposals on how the scheme can operate for the rest of the year.

While applications will continue to be accepted and processed, there is no funding for cover beyond the current ceiling.

The effect is that older people may have to go onto a waiting list for a nursing home place.

Over €1.1bn was provided for the 'Fair Deal' scheme this year, which was introduced by the previous Minister for Health Mary Harney.

Under the scheme, people get nursing home care by paying 80% of their income and 5% of the value of their assets a year, with the HSE paying the balance.

It allows people to pay for some of their care from the proceeds of sale of their house, after their death.

The Department of Health says the funding for the scheme is under pressure due to increases in the cost of care, demand for the scheme and other factors.

Age Action Ireland has said the Government has to resolve the 'nightmare situation' which has arisen with the Fair Deal nursing home scheme as quickly as possible.

Eamon Timmins, head of advocacy at Age Action, said older people looking for a nursing home place were now faced with two options, having to pay the full cost to get a bed in a public or private nursing home, or waiting until a person dies in a home and a bed becomes free.

He said the intention of the new scheme was to put older people's minds at ease about access to nursing home care but tonight older people would be frightened.

Fianna Fail health spokesperson Billy Kelleher said that anyone who is currently in hospital and has been assessed as needing a long term nursing home bed is now stuck in limbo.

He criticised the Health Minister for effectively putting a freeze on the funding.