Fair deal

mcardler wrote: »

Is there ever an advantage to not applying for the fair-deal scheme? So, worst case scenario is that you apply and because of your asset/income situation you are entitled to nothing. I've read that in certain cases it's better to fund the care cost privately - but I don't understand what you've got to lose by applying for the scheme and getting nothing?

VanHalen wrote: »

Thanks,
so if her mother has limited funds apart from her state pension, does this mean the HSE would likely force a sale of her mother's dwelling even though my friend had no property of her own to live in?

I've a similar query as above: is there a disadvantage in applying for Fair deal scheme?

my concern is specific to the timing of disposal of assets. see below reference from HSE site.

So lets say my Dad has a very good pension and he also transferred e.g 500K (made up of shares and money) to his children in e.g. in December 2018. that's within the last 5 years of today.

Lets say he applies for the Fair Deal today, that 500k would be taken into consideration and between his pension, his house and the 500k transferred, he would not qualify for anything from Fair Deal.

If he re-applies again in Jan 2024.... At that stage the 500k is outside the 5 years look back, BUT .... is it really??

• As this is his 2nd application, does the 500k still come into the picture? (His first application being in August 2022)
• is this a disadvantage of appyling for the Fair Deal? Why would he bother applying for it in Aug 2022?

Notwithstanding that it is very complicated, is it the case that where someone has a large sum of cash and a house, that the 7.5% cap is applied to the value of both, but they take the cash first? And then the house gets looked at?

So, if you had, say 100k cash, and a 500k house, is it 7.5% of the 600k, for 3 years?

Or, is it burn through the 100k till you hit 36k, then 3 years of the house at 500k?

afraid its both! AFAIK

the 100k cash is part of overall assets. Add on 7.5% of the value of the house, in this case 37500, so year 1 overall assets = 137500.

for simplicity, assume the 100k doesnt reduce over 3 years ..... the 7.5% of the value of the house is no longer taken into consideration after 3 years, but the 100k is still up for grabs!

assets year 1 = 100,000 + 37500 = 137500

assets year 2 = 100,000 + 37500 = 137500

assets year 3 = 100,000 + 37500 = 137500

assets year 4 = 100,000

so depending on the patient's pension and other assets (if any) they may not qualify for Fair Deal.

Thanks for the response. My assumption was that , let's say nursing care costs 70k per annum, and 80% of the pension is 20k,then the 50k comes from the 7.5% of total assets (64k cash (allowing the 36k cash exemption) +400k house). And its a "bill", so it is paid from cash while there is cash.

Care shortfall is 50k. 7.5% of 464k asset is 34.8k. So the 34.8k is the "bill" for year 1.

Year 2, assets are 400k house and the cash above the 36k threshold so 429.2k. Of this bill (32,190), 29,200 is paid from remainder of cash. Let's say with balance coming from 36k exemption (for simplicity.

Now, in year 3, that is when the house is "touched". At 400k, it is 30k at 7.5%. And that is the "bill" for 3 years.

After that, house is sold on death, say 5 years later, and 3 x 30k (90k) nursing home loan is paid from proceeds, leaving estate worth 410k and whatever cash is left?

Point is: this assumes fair deal applies throughout period, and not just when person runs out of cash?

Is this correct?

Mercifully, we are not at this stage, but looking for an understanding of how all this works..

Notably, the HSE does not give "worked examples" of all of this...

do you need to factor in the burn down of the savings from €100k in year 1 .. which will diminish the savings in Y2, Y3 etc ?

My mother is in a nursing home since last December. She is 95, medically fit but physically unable to care for herself. The way it worked for us is as follows:

She had savings of around 120,000. She has a Widow's Pension and a private pension from my dad's employment which together anlmount to around 1,400 per month. Her house is valued at 350,000.

Under Fair Deal, without the loan aspect of the plan, she was entitled to 46 cents per week contribution towards her care so she was paying over 4,000 per month. Although she has substantial savings, she might live to 100, so her money would run out fairly quickly.

Since activating the loan aspect of the scheme she is now subsidised by 2,000 a month. This will be recouped on sale of the house up to a maximum of 7.5% per year, capped after 3 years. We have been advised to contact the office every 12 months and her contribution will be recalculated taking into account her diminishing finances. Basically the less money you have the more that is covered under FD.

Any extra charges such as prescriptions, doctor visits, chiropodist visits, personal care products, hair, nails etc are paid for privately and not included in Fair Deal. They usually add up to about 250 a month extra.

I am in this predicament now. What was the outcome. Was your friend forced to pay back the loan or was she allowed to defer? And if so was it because they were on social welfare!

Too limited a response; if the person who continues to be living in the house was previously in receipt of carers allowance, they can defer repayment and continue living there indefinitely. There are other circumstances in which this also applies.

https://www2.hse.ie/services/schemes-allowances/fair-deal-scheme/nursing-home-loan/#deferring-repayment-of-the-nursing-home-loan