Fair Deal Nursing Home Subvention Scheme. Rent house or leave idle?

A

Azurerat

Guest
Hi,

My mum is in a nursing home under the subvention scheme (pre Oct 27 1999).

My father has now been referred for long term care and I have to apply under the new fair deal scheme.

My problem is this: their house is now unoccupied. His only income is his pension which i understand he will contribute 80% of for the scheme. I also understand that he will have to pay 2.5% (as he is married ie 1/2 of 5%) of the house value for a max of three years under deferred payment.

My problem is what to do with the house? If it is rented I believe this is considered income and 80% is taken?

Can the house be sold while they are alive (my parents have willed it to their children including me), I believe it is then considered savings of my father and as such 2.5% is taken annually for the remainder of his life? Or do we leave the house idle?

Any advice is greatly appreciated.

Az
 
Re: Fair Deal Scheme Advice

The house can be sold with their permission. If they're incapable of giving permission i.e if they have dementia , then you will either need to have power of atorney already or if not you might need to consider making them a ward of court.

I would not leave the house idle as you could have problems with flooding in winter or vandalism.

The fair deal has 2 aspects. 1) There is a contribution to the care costs. . If there is a shortfall then it's made up by your parents pension. 2) If there is still a shortfall you can get a loan from the government who will in turn take 15% or 7.5 % in your case of your parents estate on death. If the shortfall is very small when you add the governmnet contribution and the penion contribution then I would not take up the second part of the scheme. Instead I would sell the house, Lodge the money with the ward of court and have them pay the shortfall out of the proceeds of the house.

Every case will be slightly different depending on your parents assets and income. In our case the nursing home is 740 per week.The fair deal pays 450 of this, My mothers pension pay a further 250 per week leaving a shortfall of 40 euro or 2080 per year. Depending on what your parents assets are worth it may be financially sounder to not take up the loan from the government . You really need to work out what 15% or 7.5% in your case of there estate will be worth.

Renting out the house might be hassle but if you feel up to it you could do it. It could turn out to be a thankless task though
 
Re: Fair Deal Scheme Advice

Thanks for your response, excuse my ignorance but are you saying the fair deal gives u so much towards the cost, plus my parents pension 80% and the shortfall can be make up either by a loan from state (ie where the assets\savings will be assessed) or you can decide to make up the shortfall yourself and the assets\savings are not assessed? I thought that under the fair deal your assets\saving where automatically assessed?
 
Re: Fair Deal Scheme Advice

The HSE agrees a price with nursing homes who register for the scheme. Regardless of which home you go to your contribution stays the same. These agreed rates, which vary greatly, can be downloaded here.

http://www.hse.ie/eng/services/Find_a_Service/Older_People_Services/nhss/costs.html

Your weekly contribution will be assessed as 80% of your income and 5% of your assets.

The first €36K of assets (€72K for a couple) will not be counted in the assessment.

Your principal residence will only be included in the financial assessment for the first three years. Any other assets will be included in the assessment indefinitely.

In your case if your parent’s home was valued at €200K, as they are a couple it would be assessed as 2.5% of €200K, that’s €5K a year, for three years,

This is the part of the scheme which is optional, again in your case you can apply to have your assessed contribution reduced by €100 weekly for three years and have a charge of €15K put against the property.

You can download ten examples of how it works here.

http://www.dohc.ie/issues/fair_deal/fair_deal_examples.pdf

All other details can be found here.

http://www.dohc.ie/issues/fair_deal/
 
Whatever you do, don't sell the house. As an asset, their primary residence is protected by a three year rule. Savings in a bank account are not.

Fair Deal is not too difficult to work out and in truth, its turning out to be a good deal for most people.

The calculations are fairly simple

Every nursing home in the countrty under the scheme has a n agreed rate with the HSE as negotiasted with the NTPF. These rates on on the HSE website. This is the fee that the nursing home will be paid.

Payment to the nursing home is made up from three sources,
Income - 80% of the residnets income
Assets - an annual contribution equal to 5% of the value of assets and ignoring the first €36,000.
Also, there is a special provision to ignore the resident's home in the value of assests after three years.
HSE - The HSE pays the balance.

There are numerous examples of how this works out on the HSE website.

One other thing about your case, consider applying for fair deal for your mother. If your mother has been getting subvention, then her assets (half of the house) was considered at the time of application and she has been penalsied for years becuase she has the house. Therefore, her contribution under fair deal will decline sharpely once she has been in a nursing home for three years.

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Azurerat said:
Hi,

My mum is in a nursing home under the subvention scheme (pre Oct 27 1999).

My father has now been referred for long term care and I have to apply under the new fair deal scheme.

My problem is this: their house is now unoccupied. His only income is his pension which i understand he will contribute 80% of for the scheme. I also understand that he will have to pay 2.5% (as he is married ie 1/2 of 5%) of the house value for a max of three years under deferred payment.

My problem is what to do with the house? If it is rented I believe this is considered income and 80% is taken?

Can the house be sold while they are alive (my parents have willed it to their children including me), I believe it is then considered savings of my father and as such 2.5% is taken annually for the remainder of his life? Or do we leave the house idle?

Any advice is greatly appreciated.

Az
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