Fair deal scheme or nursing home loan

John6008

Has anyone had any experience with the fair deal scheme or nursing home loan. My father will have to go into care in the near future and we are trying to keep the family home. He is debt free and no substantial savings he's on a state pension. My mum has passed away . Just wondering could anyone share they're experiences. Would it be fiesable for me to pay and keep the family home on this scheme or with the loan ?

Atlantic Dawn

It's expensive, could be looking at €5k a month, would be out of the budget of most people. They take a certain percentage of the homes value each year, from a financial point of view it would likely be better to acquire a loan on your fathers eventual death and pay off what percentage they were going to take.

John6008

So get like a nursing care loan ? I won’t be forced to sell the home though will I ?

milltree

I have been wondering about this also. We are at the stage of looking at a Nursing Home for my mum. She would have a very small amount of savings and does have a house that is Mortgage free. I do recall hearing a conversation where it was felt it would be better to retain the home and avail of the home loan scheme and that her savings be accounted for in the normal way i.e 80% paid to Nursing Home. Then the home would be sold after my mum passes away, the load would be repaid up to a maximum of 3 years at 7.5% of value of sale per annum. Would that be the best way to go with this?

Henry Ford III

We've been through this process within the last 12 months and here's how it works:-

1/. HSE pay the nursing home but do an assessment on the applicant to determine their contribution.

2/. They take 80% of their assessed income (pension).

3/. They take 7.5% of their cash assets yearly. The first €36k is ignored.

4/. They take 7.5% of the valuation of the home to a maximum of 3 years. This element can be advanced as a loan with a charge being attached over the property.

In the op's example there is no reason why the family home cannot be retained.

milltree

Thanks a million Henry for your reply. I think holding onto the house seems like the logical thing to do. Because it seems that if the house is sold in advance that the cash obtained on the sale of the house is then taken as a cash asset and added to whatever other savings she has and that this is then used to pay the 80% contribution on an ongoing basis. Whereas, if the house is retained, her savings and pension are used to pay this ongoing 80%, and the case ultimately realised from the house sale is capped at 7.5% annually for a max of three years?

Tilikum

My Dad is in hospital at the minute. When he comes out, he’ll be going into a home. I will be going in to get a loan for whatever the HSE will be owned. I was told to get the house signed over straight away (last year). That was the worst advice we could have got. Now we can have to get a loan and pay up front, rather than having to pay the HSE when the house is eventually sold.

This country is so ****ed people don’t even realise it. 10-15 years from now we’re going to have a nursing home crisis.

milltree

Yes, I think the whole thing is a bit fuzzy. I just feel that before we go down this road we need to be 100% certain as to what is the correct road to take - definitely a minefield

Ghekko

It's a minefield alright. I suppose it depends on the house value. In our case we didn't take the loan scheme. Dad was on the state pension and had a few thousand in savings. The house was valued at less than 100k. He was paying 330 per week when all was assessed. Nursing home fees will most likely be higher in city areas, but his home charged just under 800 per week. We did end up selling the house before he died as his own funds to cover the excess weekly amount were running out. His funds were still being used to maintain the empty house too, and once he realised it was costing him a fair bit, he agreed to sell. He'd never wanted to visit it once he'd left it and none of us would have wanted to keep it after he died.

Henry Ford III

milltree wrote: »

Thanks a million Henry for your reply. I think holding onto the house seems like the logical thing to do. Because it seems that if the house is sold in advance that the cash obtained on the sale of the house is then taken as a cash asset and added to whatever other savings she has and that this is then used to pay the 80% contribution on an ongoing basis. Whereas, if the house is retained, her savings and pension are used to pay this ongoing 80%, and the case ultimately realised from the house sale is capped at 7.5% annually for a max of three years?

I'd agree. House value say €100k. Assessment is 7.5% p.a. with a max. of €22.5% or €22,500. Trouble is it still has to be maintained and if rented the HSE will want 80% of the rent.

Henry Ford III

Tilikum wrote: »

My Dad is in hospital at the minute. When he comes out, he’ll be going into a home. I will be going in to get a loan for whatever the HSE will be owned. I was told to get the house signed over straight away (last year). That was the worst advice we could have got. Now we can have to get a loan and pay up front, rather than having to pay the HSE when the house is eventually sold.

This country is so ****ed people don’t even realise it. 10-15 years from now we’re going to have a nursing home crisis.

Who advised you do that? If it was a solicitor I'd be suing them. It's crazy advice.

GoldFour4

Henry Ford III wrote: »

Who advised you do that? If it was a solicitor I'd be suing them. It's crazy advice.

Just thinking out loud here but my guess would be that the parent wasn't in as bad a situation and the solicitor thought that if house was transferred at that point in time then it wouldn't be an assessable asset by the time the parent went to a nursing home.

I've phrased that horribly so not sure if point will come across.

Henry Ford III

malistheman wrote: »

Just thinking out loud here but my guess would be that the parent wasn't in as bad a situation and the solicitor thought that if house was transferred at that point in time then it wouldn't be an assessable asset by the time the parent went to a nursing home.

I've phrased that horribly so not sure if point will come across.

I think asset transfers within 3 years of a Fair Deal Application are ignored and assessed.

As I said whomever advised doing that transfer hadn't a notion (unless the patents condition worsened rapidly and unexpectantly after it).

august12

milltree wrote:

Yes, I think the whole thing is a bit fuzzy. I just feel that before we go down this road we need to be 100% certain as to what is the correct road to take - definitely a minefield

At this stage, I don't think there is any advantage to singing house over to someone else, then it becomes a headache for this person as it is classed as an asset and included in any means testing if this person is applying for something, and also transfer has to be greater than 5 years, If less, it's still included for means testing for nursing home fee as far as I know, if there are other family members, maybe split the cost between ye, nominate one person to look after the payment, please be aware this payment qualifies for tax refund, it's one of the few where you can claim back at the higher rate, so very beneficial to let some family member who is being taxed at the higher rate to pay the nursing home, and then claim back, the info given in an earlier post is correct, 80% of pension, first 36,000 of savings are exempt, house is valued by an auctioneer/valuer and 7.5% of this valuation is also payable for three years If only a house but any other business/commercial will be payable indefinitely until such time as a new fair deal scheme is in place.

MPFGLB

august12 wrote: »

At this stage, I don't think there is any advantage to singing house over to someone else, then it becomes a headache for this person as it is classed as an asset and included in any means testing if this person is applying for something, and also transfer has to be greater than 5 years, If less, it's still included for means testing for nursing home fee as far as I know, if there are other family members, maybe split the cost between ye, nominate one person to look after the payment, please be aware this payment qualifies for tax refund, it's one of the few where you can claim back at the higher rate, so very beneficial to let some family member who is being taxed at the higher rate to pay the nursing home, and then claim back, the info given in an earlier post is correct, 80% of pension, first 36,000 of savings are exempt, house is valued by an auctioneer/valuer and 7.5% of this valuation is also payable for three years If only a house but any other business/commercial will be payable indefinitely until such time as a new fair deal scheme is in place.

I am sorry but what is that post about ? ...not sure why it is a headache for someone if the time since the sign over period is greater than 5 years as your post suggests?

'Split the payment between ye' ? what payment ?

If first 36K of savings are exempt then surely (some of ) that money can be used to pay towards the 22.5% over 3 yearrs required as an asset payment from the family home if a old aged person has this cash ?

MPFGLB

Can someone clarify some points on the fair deal for me please. I live in the UK and I am not aware of the details

My mother has about 70K in savings , a home worth about £100K (which she wants to keep in the family) and her old age state pension...She wants my sister to have the family home. My sister lives elsewhere . My mother has her savings as she has not spent a penny all her life...not even bought herself a new coat for many years. Seh worked very hard as a cleaner. She loves not spending money ..Scrooge is positively flaithulach in comparison to her

My aunt (my afther's sister) on the otherhand has spent her life drinking, smoking and coverting and hasnt a bob.

Both are roughly the same age ... and both may need to go into care soonish as both have longterm debilating conditions


So can I clarify ..I understand that 80% of my mother income goes rowards her care, ie her pension.
And 7.5% of the value of the family home annually over a 3 year period
What percentage of her savings ? is it 7.5% annually ? or is it more
Does she have to pay 7.5% of her savings along with 7.5% of the value of the home ..at the same time
Can she pay the equivalent from the cash ? ie. 7.5% of 70K (5.25) and 7.5% of 100K *7.5)= 12.75K Euros...but take that from the cash savings... that would be 38,500 in 3 years? leaving her with 31,500 ??? or does the savings contribution stop when 36K is left
Is the payment from the cash savings indefinite ?

what's if the 36k threshold exemption on saving contribution she gifts to my sister ? who inturn uses that to pay the 7.5% annual payment for the house ?

Seems so hard to figure out what is best
Meanwhile my aunt who never saved or really worked will be in the same nursign home and have nothing to pay ...seems unfair. Probably spend whatever allowance she has on booze and fags !!

AMCCORK

Hi my understanding is initial assessment on you mother would be 80% pension assume just old age approx €230 so €184 per week plus 7.5% assets so €170,000 less €36,000 - €134,000 - €193 so total €377 per week. This can be paid however u like from your funds your mothers cash etc. I’m not sure how often you can get the assessment done as the cash runs down. Certainly after three years house is not included in the calculation. If house values increase though they can reassess the value. You can also defer the 7.5% on the house to be paid when house is sold. There are also significant additional extras to the nursing home- entertainment , hairdressing, prescription, if carer / taxi needed for hospital appointment etc. Your aunt will pay the 80% pension €184 plus any extras if she has no assets above €36,000

AMCCORK

Also too late for gifts any gifts in three years before going into home are disregarded and included in assets

Henry Ford III

AMCCORK wrote: »

Hi my understanding is initial assessment on you mother would be 80% pension assume just old age approx €230 so €184 per week plus 7.5% assets so €170,000 less €36,000 - €134,000 - €193 so total €377 per week. This can be paid however u like from your funds your mothers cash etc. I’m not sure how often you can get the assessment done as the cash runs down. Certainly after three years house is not included in the calculation. If house values increase though they can reassess the value. You can also defer the 7.5% on the house to be paid when house is sold. There are also significant additional extras to the nursing home- entertainment , hairdressing, prescription, if carer / taxi needed for hospital appointment etc. Your aunt will pay the 80% pension €184 plus any extras if she has no assets above €36,000

The home is only assessed for 3 years. She can get a loan against the property from the HSE and they'll recover it after her death, They take a charge on the property limited to max 22.5% (7.5% x 3 years) of it's value.

From a Fair Deal perspective it's easier on the pocket if you've no assets. So anyone who divested themselves of property and cash in a timely manner would end up paying out 80% of their OAP only.

MPFGLB

AMCCORK wrote: »

Hi my understanding is initial assessment on you mother would be 80% pension assume just old age approx €230 so €184 per week plus 7.5% assets so €170,000 less €36,000 - €134,000 - €193 so total €377 per week. This can be paid however u like from your funds your mothers cash etc. I’m not sure how often you can get the assessment done as the cash runs down. Certainly after three years house is not included in the calculation. If house values increase though they can reassess the value. You can also defer the 7.5% on the house to be paid when house is sold. There are also significant additional extras to the nursing home- entertainment , hairdressing, prescription, if carer / taxi needed for hospital appointment etc. Your aunt will pay the 80% pension €184 plus any extras if she has no assets above €36,000

Thanks for the reply

My mother wants the home kept in the family ...this is why there is an issue
And given that she worked so hard all her life and has savings I do not see why it cannot be. In fairness we are not that bothered but want to comply with her wishes

From your reply I ask again why the 36,000 cannot be set aside to pay the the family home contribution. My sister and I have families and not alot of funds to pay 22.5% its value

Also from your calculation you say the total contribution is -192 ..what is this deduction ?
But if your calculation is correct then 337 is the toal and taking off the pension that is 337-184 = 153 which over 52 weeks is 7956

Then her savings would last along tme and the house may never get to the point we have to pay 22.5% to keep it ? is this correct ?

So 7956 a year for 3 years = 23868
Take that from her savings = 46014
still 36k there

If your view of the situation is correct than afte 3 years the house is still an intact assest and there is approx another 10K in savings


But maybe all do not qualify for the fair deal ?

And also what if you want to remain in your home ...is there financial help with this ?
Any input on this is greatly appreciated ...thanks

MPFGLB

AMCCORK wrote: »

Also too late for gifts any gifts in three years before going into home are disregarded and included in assets

Not excluding it from the assets ...just setting it aside to pay any bills inc towards the 22.5% as this amount cannot be taken off my mother ....

In the end it is her money is it not and can used to pay her HSE bill for 22.5% of the value of her home if it remains


Am I missing something when we say 36k is not included in the calculations?

Ghekko

Yes your mother's cash savings can be used to pay her fees. This is what my father did, though he did not live for 3 years once he moved into the home. His savings were running out so he sold the house - none of us would have ever moved home to live in it. Had he lived for the 3 years the house funds would then have been classed as savings so he'd have been paying 7.5% on that. So if possible, if your mother is expected to live a good few years, then keep the house and use her cash savings to pay the excess weekly fee to the home. After the 3 years the house is taken out of the assessment.

MPFGLB

Ghekko wrote: »

Yes your mother's cash savings can be used to pay her fees. This is what my father did, though he did not live for 3 years once he moved into the home. His savings were running out so he sold the house - none of us would have ever moved home to live in it. Had he lived for the 3 years the house funds would then have been classed as savings so he'd have been paying 7.5% on that. So if possible, if your mother is expected to live a good few years, then keep the house and use her cash savings to pay the excess weekly fee to the home. After the 3 years the house is taken out of the assessment.

Thank you

The problem is as I say only that my mother has this idea the family home will remain so and she dosnt want it sold.....though it would be easier for us if it was ,,,but cannot go against her wishes ....

Ghekko

MPFGLB wrote: »

Thank you

The problem is as I say only that my mother has this idea the family home will remain so and she dosnt want it sold.....though it would be easier for us if it was ,,,but cannot go against her wishes ....

If she thinks someone is going to move into it after she passes then she most likely thinks she's doing a good thing by wanting it kept in the family. The reality is that once it's empty it becomes an added expense to maintain. We ended up having to get a damp problem fixed, shelling out for fills of oil which was on a timer a few times a day with nobody living there, paying a fella to maintain the garden, paying house insurance - different type of insurance when house is vacant, property tax... It all adds up and eats into the savings. Once all the costs were set out for dad he agreed to sell. He had never wanted to go back to the house once he moved into the nursing home. I'd say it was too hard for him. When the time comes for your mum to leave, you could gently explain these things and she may realise that it's not feasible to keep the house unless one of ye want to take it on in the future. I don't envy you the process now. You are right to get things in motion though as the fair deal can take a while to come through between paperwork, medical assessment and finding a nursing home place.

AMCCORK

You don’t need to sell the house. For the fair deal scheme they do an assessment of your assets. The family pays the nursing home 80% of all income so above I am assuming state pension only 184 plus you pay annually 7.5% of the value of her assets. The first 36k of assets is not counted when doing the calculation so u said 70k in cash plus house 100k less the 36k gives 134 k so that’s where I’m getting the Rita contribution of €377 per week. You can pay this from whatever funds you have this would include you mums pension of 230 so another 147 pw from savings. Your mother remains in control of her assets. You should not sell the house because it is not counted in the calculation after 3 years. The nursing home will bill u the 377€ they will ask bill the extras. You will also have the maintenance of the house. There should be plenty of funds to cover the cost. If you mum lives for 10 years and runs out of cash the payment will be reduced to 80% income

AMCCORK

If you sell the house you will pay 7.5% on the cash received indefinitely better so you would have to weigh that up against the cost of maintaining the house

AMCCORK

If you sell the house you will pay 7.5% on the cash received indefinitely so you would have to weigh that up against the cost of maintaining the house

MPFGLB

AMCCORK wrote: »

You don’t need to sell the house. For the fair deal scheme they do an assessment of your assets. The family pays the nursing home 80% of all income so above I am assuming state pension only 184 plus you pay annually 7.5% of the value of her assets. The first 36k of assets is not counted when doing the calculation so u said 70k in cash plus house 100k less the 36k gives 134 k so that’s where I’m getting the Rita contribution of €377 per week. You can pay this from whatever funds you have this would include you mums pension of 230 so another 147 pw from savings. Your mother remains in control of her assets. You should not sell the house because it is not counted in the calculation after 3 years. The nursing home will bill u the 377€ they will ask bill the extras. You will also have the maintenance of the house. There should be plenty of funds to cover the cost. If you mum lives for 10 years and runs out of cash the payment will be reduced to 80% income

Thank you for your reply...very helpful

One other issue I want to raise...

What about care at home ?

IS there a fair deal for that

I am thinking of what happened to an elderly neighbours of ours
She wanted to stay in her own home and her family used her considerable savings on this with live in carers etc

She started with mild dementia but got progressively worse ...so in the end needed round the clock care. After 4 or so years th savings ran out

They then needed to get her residentail care and her home was assessed and I BELIEVE was then taken into account (though not sure)

So after spending all her money on care at home she still had to be re assessed for a care home

Is there no fair deal for staying in your own home and thus ensuring the 3 years assests from your home are included in the total care bill whether you later need residential care or not

MPFGLB

AMCCORK wrote: »

If you sell the house you will pay 7.5% on the cash received indefinitely so you would have to weigh that up against the cost of maintaining the house

We would not want to sell the house

But to be clear if the house is assessed as an asset for the 3 required period and we pay that part from the cash then the house can then be left to my sister to do with as she wants into the future
In other words if she sells after my mother has passed away the money is hers ?

AMCCORK

Once you pay the amount assessed there is no charge on the house it belongs to you mother and you mother should deal with the house and her wishes in her will.

AMCCORK

Currently there is no fair deal and no help at all to care for someone in their own home. However there is noise about this at the moment so I would think there will be something within the next year that will extend the fair deal scheme to home care

Masala

So.... (and this sounds cruel!!) - should we advise our parents to transfer their home house to their kids now while they are still 'young enough' ???

Most parents would be leaving the home house split among the children. So- why not do it sooner rather than later.!!!

What is the problems with the kids receiving the home early??? There will be no Capital Aquisition Tax etc to be paid etc if value is below the limit etc...

This means that the the Fair Deal Scheme will only cost €188 (75% of the OAP) if a parent has to go into a Nursing Home.....and the HSE can stuff themselves !!!

I dis say it sounds 'cruel' to be even thinking of same.

Ghekko

#29 Exactly. Once she dies (hopefully not for a long time) she will have paid the nursing home up to date of death and that's that. That's assuming she doesn't go with the HSE loan scheme. We paid a months 'deposit' for dad when he moved in. He died on day 3 of the month and we had paid that week in advance so we got the deposit and the 4 overpaid days back. The HSE do look for a statement of assets after death though - whatever is sent to probate - its most likely to ensure there wasn't a secret stash that wasn't disclosed on the fair deal application.

It's unfortunate that the scheme doesn't stretch to home care. The services available at present are abysmal. Hopefully this will change in the coming years. Private care costs a fortune.

AMCCORK

It’s always an option if your parents are open to that discussion. But who is to say they would ever need nursing home care?

AMCCORK

It’s always an option if your parents are open to that discussion. But who is to say they would ever need nursing home care?

MPFGLB

I had a look at home care costs to the Irish economy

With say 5% of old age persons requireing residential care (current estimates) and live in care homes for 2.4 years (on average) that is a cost of £126,000 per person for the full duration if average costs are 1,000 a week

Now given the 22.5% of assests payments and further savings and pension contributions (for the 2.4 years average duration) I estimate the state ends up paying about 67K of that pot ...which is 2.1 billion for all over 65 year olds in residential/nursing care (not including stay at home care costs) for their total duration ...or 0.9 billion a year

As the population over 65 is set to treble up to 2050 that is a bill of 2.7 billion a year ....mighty high costs
If anything care will get more expensive
And then there is the care in apersons home which costs the state alot and the old age pension and health costs which are predominately for the elderly ......a big burden on the young
The HSE is not a seperate entity from the state ..its fees are saving the tax payer...


Its a time bomb

Irish government should have thought about a care insurance for elderly say paid into by over 40 year olds several years ago

august12

MPFGLB wrote:

I am sorry but what is that post about ? ...not sure why it is a headache for someone if the time since the sign over period is greater than 5 years as your post suggests?

I wasn't replying to your post, and I didn't say it was a headache if transfer greater than 5 years,

George04

Hi I was just wondering has anyone been made a care representative, how long does it take?

ralc

Anybody got any advice on Paying the balance real time V's the Nursing Home Loan. Our situation is both parents are alive, father must go into a home, the other will live a good bit longer before mother will need a home and there isn't much interest keeping the family home after both will have passed.
None of us want the home and I think the mother would rather have the extra cash to hand while she is alive. The HSE coordinator was advising us away from the loan but I don't see the reasons if were happy to sell the home after they both go or if one of us wants it is willing to pay the value of the home and give the revenue what their owed.



Also I'm a bit confused about the literature paragraph below. Would the 22.5% asset value be due for him (3 x 7.5%) followed by a further 22.5% for the mother when she has to go into a home, or what does this 11.25% mean?

In the case of a couple, the contribution based on the principal residence will be
capped at 11.25% (7.5% if the application was made prior to the 25th July
2013) where one member of the couple remains in the home while the other
enters long term nursing home care, i.e. the three year cap applies. Where a
person opts for the nursing home loan in respect of the principal residence, their
spouse or partner can also apply to have the repayment of the loan deferred for
their lifetime (see section 9).

adam88

Henry Ford III wrote: »

We've been through this process within the last 12 months and here's how it works:-

1/. HSE pay the nursing home but do an assessment on the applicant to determine their contribution.

2/. They take 80% of their assessed income (pension).

3/. They take 7.5% of their cash assets yearly. The first €36k is ignored.

4/. They take 7.5% of the valuation of the home to a maximum of 3 years. This element can be advanced as a loan with a charge being attached over the property.

In the op's example there is no reason why the family home cannot be retained.

But surely this is to pay nursing home fees. If your a high worth individual with say for eg a million in cash in the bank. Surely they’re not going to take 75k plus 80percent of a possibly very large pension

Masala

When they say 80% of the pension.... is it all pensions or just the State pension??? I am killing my self trying to build up my private pension at my age now so as to have a decent retirement.... I am hoping it's not going to be handed over to a nursing home should I end up in one!!

Henry Ford III

Masala wrote: »

When they say 80% of the pension.... is it all pensions or just the State pension??? I am killing my self trying to build up my private pension at my age now so as to have a decent retirement.... I am hoping it's not going to be handed over to a nursing home should I end up in one!!

It's all income I believe.

If you have a huge pension and cash assets you won't need Fair Deal.

adam88

Henry Ford III wrote: »

It's all income I believe.

If you have a huge pension and cash assets you won't need Fair Deal.

It’s wrong tho. You worked long enough and paid enough tax so that you could enjoy your retirement and then they just come and take it off you again.

Henry Ford III

Nursing homes are pretty expensive. The country can't afford to subsidize them totally.