Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie
Hi all,
Vanilla are planning an update to the site on April 24th (next Wednesday). It is a major PHP8 update which is expected to boost performance across the site. The site will be down from 7pm and it is expected to take about an hour to complete. We appreciate your patience during the update.
Thanks all.

Fair Deal Scheme - assets over €1m

Options
  • 03-08-2019 11:22pm
    #1
    LegacyUser
    Registered Users Posts: 166,026 ✭✭✭✭


    I am posting this anonymously for reasons

    I understand that under the fair deal scheme, the government will take 80% of person's income, plus 7.5% of their asset each year (capped at 3 years for their own home), and excluding first 36k or thereabouts in cash.

    Therefore if an elderly parent for instance has a second property and cash assets - say total value of 400k, and their own principle home was worth approx. 1m.

    Under Fair deal - 1m x 7.5% = 75k, plus 365k x 7.5% = 27k - total 103k. So over a 3 year period, the government would have take over 300k, where as privately might only cost around 65k. (Given that there was a piece in the paper recently that nursing home prices under the fair deal scheme, are higher than if one pays privately). In addition, you may be able to claim back 20%/40% on nursing home fees. So say claim back 20%, may actually only be costing 52k

    After 3 years, they would be just taking the 7.5% of the cash each year - so possible around 20k, a year, but there would be approx. 225k loan outstanding on the main residence to be paid by family at some future date.

    Given all the above information, for anyone with a second property or high cash value in savings - would it be crazy to go with the fair deal option?


Comments

  • Options
    #2
    TrixIrl
    Registered Users Posts: 200 ✭✭TrixIrl


    Yes the fair deal would not make financial sense in this case, unless the person going into.the nursing home had become incapacitated at a very young age due to stroke etc and is expected to live for say 30 years.

    The fair deal scheme is set up to part finance the cost of residential nursing home care for those who cannot afford it so there has to be a point at which it is not viable for those with significant assetts that can afford to pay privately.


  • Options
    #3
    BrianD3
    Registered Users Posts: 8,273 ✭✭✭BrianD3


    Under the Fair Deal you don't pay more than the cost of your care. There may be nursing homes (especially HSE run ones) that cost 103k per year but most private nursing homes are much less than that so you wouldn't be paying 103k for a nursing home where the cost of the care is 65k

    Also, re: tax relief, yes it is available on nursing home fee that you pay yourself (not under the Fair Deal) I have read that tax relief can be claimed on the Fair Deal fees too.

    For anyone with significant assets it will be costly no matter what you do. Also, the extras can be a significant expense. AFAIK items like incontinence wear are not included under the Fair Deal.


  • Options
    #4
    Voltex
    Registered Users Posts: 1,580 ✭✭✭Voltex


    KidCarer wrote: »
    I am posting this anonymously for reasons

    I understand that under the fair deal scheme, the government will take 80% of person's income, plus 7.5% of their asset each year (capped at 3 years for their own home), and excluding first 36k or thereabouts in cash.

    Therefore if an elderly parent for instance has a second property and cash assets - say total value of 400k, and their own principle home was worth approx. 1m.

    Under Fair deal - 1m x 7.5% = 75k, plus 365k x 7.5% = 27k - total 103k. So over a 3 year period, the government would have take over 300k, where as privately might only cost around 65k. (Given that there was a piece in the paper recently that nursing home prices under the fair deal scheme, are higher than if one pays privately). In addition, you may be able to claim back 20%/40% on nursing home fees. So say claim back 20%, may actually only be costing 52k

    After 3 years, they would be just taking the 7.5% of the cash each year - so possible around 20k, a year, but there would be approx. 225k loan outstanding on the main residence to be paid by family at some future date.

    Given all the above information, for anyone with a second property or high cash value in savings - would it be crazy to go with the fair deal option?

    OP..your basically correct. Everything other than the PPR becomes a "relevant asset" which will be taken into account in terms of capacity to pay for nursing care. The first €36k is the value of their estate...not their cash.

    Given that you have a relative with assets worth €1M+, maybe there is scope to afford the weekly nursing home costs on a weekly basis?


  • Options
    #5
    splinter65
    Registered Users Posts: 9,420 ✭✭✭splinter65


    OP just pay the nursing home every week. Fair Deal is not applicable in this case.
    It’s recommended by the HSE that applicants above a certain level in financial terms consult with their accountant and/or solicitor before going any further with Fair Deal and this would be one of those cases.


  • Options
    #6
    Ace2007
    Registered Users Posts: 19,660 ✭✭✭✭Ace2007


    BrianD3 wrote: »
    Under the Fair Deal you don't pay more than the cost of your care.
    splinter65 wrote: »
    OP just pay the nursing home every week. Fair Deal is not applicable in this case.
    It’s recommended by the HSE that applicants above a certain level in financial terms consult with their accountant and/or solicitor before going any further with Fair Deal and this would be one of those cases.

    Not to hijack the thread, but if the OP wasn't going to be paying more than the cost of the care, what benefits would there be of not going to fair deal route, is it simple because paying privately should be cheaper than paying under the fair deal scheme, as the cost of care, although identical would be different?


  • Advertisement
Advertisement