# fair deal scheme and transfer of home



## theroux

My mother is thinking of transferring the family home to me, her son. 

She will continue to live in the home and we will be liable for tax as I live abroad. However my question is about the fair deal nursing home scheme. If at some point after the transfer she decides to be assessed for the scheme I know the home would be included (assuming its within 5 years of the transfer). 

What would this mean in practice? It seems to imply on the website that costs from the property are deferrable until after the persons death. But if my mother transfers her home she wont have anything left and thus will have nothing to pay after death. It seems according to the wording below that she is liable after death. 

Can anyone elaborate on if there is reason not to do the transfer now?




			
				fair deal at HSE website said:
			
		

> The person who is responsible for repayment of the nursing home loan to the Revenue Commissioners is called the relevant accountable person. The relevant accountable person may be a different person to the applicant, depending on the circumstances as set out in the following examples:
> Example 1: Where you transfer or sell part or all of your property, during your lifetime, you and your spouse/partner will be the relevant accountable persons.


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## Black Sheep

If your mother is giving/gifting you the family home would not therefore feel responsible for her care


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## theroux

Black Sheep said:


> If your mother is giving/gifting you the family home would not therefore feel responsible for her care



I dont quite understand your question. Under the scheme there would be an assessment of her assets and then the state basically the pays the bill for her care for anything she cant afford. Thus its makes no difference in terms of responsibility since she will be cared for either way.

What I am wondering about is if she is liable "after" her death, what happens if she has no assets.


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## partnership

I think there is a 5 year rule so if she transfers it to you now and in two years time she needs to avail of the fair deal scheme to go into the nursing home then it would be counted as an asset.  This is to stop people deliberately  transferring property to avoid paying towards their care.  If she does not transfer it and needs care then it does not necessarily have to be sold - the state will pay and when she dies it is sold and they recoup the amount.


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## theroux

partnership said:


> I think there is a 5 year rule so if she transfers it to you now and in two years time she needs to avail of the fair deal scheme to go into the nursing home then it would be counted as an asset.  This is to stop people deliberately  transferring property to avoid paying towards their care.  If she does not transfer it and needs care then it does not necessarily have to be sold - the state will pay and when she dies it is sold and they recoup the amount.



Thanks for the reply.  So if she does transfer it am I right in saying she can't defer payment of it like she can with property she owns?

I understand with property, payment can be defered until after death.  Can it still be deferred if the property is transferred? And if so  who is liable after the death?

Im just concerned if she transfers it to me and she needs care within 5 years, how will we be expected to pay for the required percentage based on the property (we cant sell the property since I plan to live in it!). Would she simply be denied funding?


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## twofor1

theroux said:


> It seems according to the wording below that she is liable after death.



The paragraph you quote only applies where the life loan has been granted, if your mother transfers the house to you now, then she no longer owns it and cannot apply for the life loan option under Fair Deal, so there would be no liability after her passing. 





theroux said:


> Can anyone elaborate on if there is reason not to do the transfer now?




If you mother passes away within 3 years of entering the nursing home, then it would make little difference whether she transferred her home to you or not, as either way she would have to contribute 7.5% of its value annually towards the cost of her care.

After 3 years, If she was still in the nursing home and still owned the house, the 7.5% of the house value that she had been paying annually, would now be paid by the state as long as she remained in care.

After 3 years, if she was still in the nursing home but had transferred the house to you, then she would continue paying the 7.5% of the house value annually for as long as she remained in care, which could be for many more years.

From a Fair Deal Perspective only, you would have nothing to loose and potentially a lot to gain by not transferring the house now.


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## theroux

Many thanks for your post, 



twofor1 said:


> After 3 years, if she was still in the nursing home but had transferred the house to you, then she would continue paying the 7.5% of the house value annually for as long as she remained in care, which could be for many more years.



I dont think this is true is it? If she tranfers the house to me, but maintains it as "her principal residence" then from what I can understand the 3 year cap still applies. I dont see why she would "continue" to pay the 7.5% beyond the 3 years...


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## twofor1

theroux said:


> I dont think this is true is it?



To the best of my knowledge it is.

If your mother transfers the house to you then she no longer owns it, how then can the 3 year cap on the family home apply ?

For arguments sake if the house was worth €100K, and she transferred it to you, although your mother would no longer own the house, she would be assessed as if she had this €100K asset with no 3 year cap, and rightly so.

Your mother has an asset and should be assessed accordingly, why should the state pay more for your mothers care if she chooses to gift her house to you ? 

*Couldn’t I just transfer my income and assets in order to reduce my contribution? *

No, the Scheme contains measures to protect against this. Under the legislation, any income or asset which is transferred within 5 years of applying for the Scheme is taken into account in the financial assessment. 

This does not affect your right to sell assets for full market value. Rather it is intended to prevent people from depriving themselves of assets for the purposes of the financial assessment. 

http://www.dohc.ie/issues/fair_deal/FAQs_07_2013.pdf?direct=1


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## STEINER

theroux said:


> Many thanks for your post,
> 
> 
> 
> I dont think this is true is it? If she tranfers the house to me, but maintains it as "her principal residence" then from what I can understand the 3 year cap still applies. I dont see why she would "continue" to pay the 7.5% beyond the 3 years...




My understanding of it is that the 7.5% is for 3 years max whilst in the nursing home.  The 5 year lookback rule is just an anti-avoidance measure which will stop asset transfers for the purpose of pulling a fast one. If she were to transfer now and within the next 5 years made a fair deal application, it would be 7.5% for 3 years only in the nursing home.  A transfer doesn't mean someone is trying to reduce the nursing care charge.  There can be a whole host of reasons for transferring property.


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## twofor1

STEINER said:


> If she were to transfer now and within the next 5 years made a fair deal application, it would be 7.5% for 3 years only in the nursing home.



I don't think this is correct, see #8 above.


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## Slim

If the transfer was less than 5 years prior to the application, the value of the property would be assessed as if the transfer had not taken place. The 3 year cap would apply only to the PPR. Any other asset, not transferred prior to 5 years, would continue to be assessed.


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## theroux

thank you for your help all


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## theroux

Also I assume the value would be assessed on the transferred value? The property in question is increasing in value rapidly (20% in the last year it seems). It seems to make sense to me to transfer it now and at least "lock in" the price (this will also benefit me in terms of the tax bill Ill be paying). If we wait the increased value of the property will count against us.

(As it happens, I dont think we will need to go as far as nursing care for a while anyway so Im conscious of the house value increasing)


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## Bronte

http://www.askaboutmoney.com/showthread.php?p=1378636&posted=1#post1378636

Above is another thread that might be helpful.


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## twofor1

theroux said:


> (this will also benefit me in terms of the tax bill Ill be paying



It must be quiet a valuable house and as such if your mother needed nursing home care in the next 5 years, her contribution would be high. 

7.5% annually of a valuable house would be a lot, and even substantial savings would dwindle quickly.

I have a family member in a nursing home for over 4 years now, the part of their contribution based on their valuable home ceased after year 3, had this not ceased their care would now be unaffordable, thankfully though their contribution is now based on their income only, so there is no financial burden on them or us and this will remain the case indefinitely.


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## Slim

Theroux, getting back to your original query, I have clarified as follows on the other post:

1. A right of residence is not assessed as means , but

2. A 'Life Interest' is deemed assessable and there is a table to enable the HSE calculate the value of that.

so you may make sure that it is a right of residence that is agreed on transfer.


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## twofor1

Slim said:


> so you may make sure that it is a right of residence that is agreed on transfer.



The legislation states ‘’ _any income or asset which is transferred within 5 years of applying for the scheme is taken into account in the financial assessment’’_

Therefore I think theroux’s mother can transfer the house to him while maintaining a right of residence and will not be assessed on the right of residence privilege, but she will still have transferred the house, and as such if she needs nursing home care in the next five years, then the house will still be taken into account in the financial assessment and no 3 year cap will apply.


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## theroux

twofor1 said:


> I have a family member in a nursing home for over 4 years now, the part of their contribution based on their valuable home ceased after year 3, had this not ceased their care would now be unaffordable, thankfully though their contribution is now based on their income only, so there is no financial burden on them or us and this will remain the case indefinitely.



I just spoke to the HSE and they have confirmed that the 3 year cap would still apply as long as its still her primary residence.

Also the value would be locked at the transferred value.


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## Slim

twofor1 said:


> The legislation states ‘’ _any income or asset which is transferred within 5 years of applying for the scheme is taken into account in the financial assessment’’_
> 
> Therefore I think theroux’s mother can transfer the house to him while maintaining a right of residence and will not be assessed on the right of residence privilege, but she will still have transferred the house, and as such if she needs nursing home care in the next five years, then the house will still be taken into account in the financial assessment and no 3 year cap will apply.


 
Interesting! Are you saying that a transferred house, having been transferred within 5 years and therfefore assessable, will not be regarded as a PPR and so the 3 year cap would not apply? Seems harsh.


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## theroux

Slim said:


> Interesting! Are you saying that a transferred house, having been transferred within 5 years and therfefore assessable, will not be regarded as a PPR and so the 3 year cap would not apply? Seems harsh.



this is confirmed as not being the case


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## twofor1

theroux said:


> I just spoke to the HSE and they have confirmed that the 3 year cap would still apply as long as its still her primary residence.



Did they fully understand that your mother would be transferring the house to you now ?


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## twofor1

Slim said:


> Interesting! Are you saying that a transferred house, having been transferred within 5 years and therfefore assessable, will not be regarded as a PPR and so the 3 year cap would not apply? Seems harsh.



It does seem harsh, but thats what I was told by the HSE when considering our options.


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## twofor1

Slim said:


> Interesting! Are you saying that a transferred house, having been transferred within 5 years and therfefore assessable, will not be regarded as a PPR and so the 3 year cap would not apply? Seems harsh.



Thats what I have been told.

You mention on the other tread that you get your info from an expert on Fair Deal, perhaps you could ask him/her to clarify this position as it seems
theroux and myself have been given different answers by the HSE on this issue.


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## theroux

Id be interested in a second opinion as well.


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## twofor1

The paragraph below seems to say the principal residence ceases to be a relevant asset if the person concerned has received care services for a period of 3 years. In other words the 3 year cap would apply if the home has been transferred.

What I was told by the HSE when considering our options was if the home was sold or transferred, then for assessment purposes it’s value would be like any other asset and assessed indefinitely. It now appears this is not correct.

6*. The interest of a person in a principal residence, or in a transferred*
*asset which qualifies as a principal residence, shall not be or*
*shall cease to be a relevant asset where the person concerned is*
*receiving or has received—*
*(**a**) care services,*
(_b_) transitional care services within the meaning of _section 13_,
(_c_) services in a nursing home which services would, if they
had been provided after the coming into operation of the
definition of “approved nursing home”, have come within
the meaning of the definition of “long-term residential
care services”, or
(_d_) any combination of the services referred to in _paragraphs_
_(a) _to _(c)_,
*for a period of 3 years (which period need not be continuous).*

See page 64 here;

http://www.oireachtas.ie/documents/bills28/acts/2009/a1509.pdf


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## theroux

thank you for looking into this


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## twofor1

That is my interpretation; I have no legal background whatsoever.

Given that there is potentially a lot at stake, it might be wise to ask the question in writing and have confirmation in writing before making the transfer.


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## Sophrosyne

Hi Theroux, TwoFor1

I think that two issues are being confused:

Financial Assessment of Contributions; and

Ancillary State Support, aka Nursing Home Loan

*Financial Assessment of Contributions*
You are correct that the imputed value of a person’s principal private residence *or one that has been transferred during the 5-year look-back period* will be disregarded in the financial assessment of contributions after 3 years -Sch 1, Part 3, section 6.  


*Nursing Home Loan*

This is covered by Part 3 of the Act.

Part 3, section 15, specifically excludes from this loan “transferred assets” i.e. any assets which have been transferred during the 5-year look-back period.

The reason for this is that the applicant has to consent to a charging order (similar to a mortgage) being placed on the property, in order for Revenue to recoup the loan on the death of the applicant.

Obviously, this cannot happen if the applicant no longer owns the property.


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## Slim

twofor1 said:


> Thats what I have been told.
> 
> You mention on the other tread that you get your info from an expert on Fair Deal, perhaps you could ask him/her to clarify this position as it seems
> theroux and myself have been given different answers by the HSE on this issue.


 
Sorry for not getting back sooner. I have checked it with my source who is adamant that the 3 year cap will apply even where the PPR was transferred within the preceding 5 years.


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## Sophrosyne

Slim,
That is correct. In determining the amount of contributions the 3-year cap applies to transferred assets - *Sch 1, Part 3, section 6.*
However, Theroux’s question is about whether his mother can defer payment of those contributions under the *Nursing Home Loan Scheme*.
Part 3, section 15 of the Act seems to affirm that she cannot.
I think _this_ is what he wants to be checked out.


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## Cavan 123 cars

Slim said:


> Sorry for not getting back sooner. I have checked it with my source who is adamant that the 3 year cap will apply even where the PPR was transferred within the preceding 5 years.


 Hi slim,

My mother is in a nursing home at moment paralysed on left side and wheelchair bound .this happened in dec 2012.father was main carer for her till got sick (diabetes) last oct 14 .We had to put her in home as no one to take care of her.We are farmers and land has been transferred from parents to myself and 2 brothers in dec 14 so only asset parents have is family home and 70 k savings which is dropping fast with home payments of 900 per week.Could you ask you fair deal expert where we stand as we are at our wits end ringing people and don't know where we stand regarding the fair deal scheme.Thanks for your help


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## twofor1

Cavan 123 cars said:


> we are at our wits end ringing people and don't know where we stand regarding the fair deal scheme.



My understanding is the financial assessment will take into account the family farm as it was transferred in the last 5 years. If your parents suffered sudden illnesses or disabilities and you and your brothers are family successors continuing to run the farm, then the 3 year cap might apply to the farm as it does to the family home. As the farm has already been transferred, the 3 year cap might apply anyway.

All the information you need can be found in the link below, pages 6/7 explain your contribution and when the 3 year cap can extend to farms. The HSE nursing home support offices are also listed at the back with phone numbers, I found my local office very helpful with any queries I had when making applications for Fair Deal.

http://www.hse.ie/eng/services/list/4/olderpeople/nhss/NHSS%20Information%20Booklet.pdf

Looks like your mothers annual contribution will be 80% of her income indefinitely as long as she is in a nursing home plus 7.5% of* half* the value of the home and farm for the first three years only (Assuming the farm qualifies one way or another for the 3 year cap)

The €70K savings should be disregarded as it is below the threshold.


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## Slim

Cavan 123 cars said:


> Hi slim,
> 
> My mother is in a nursing home at moment paralysed on left side and wheelchair bound .this happened in dec 2012.father was main carer for her till got sick (diabetes) last oct 14 .We had to put her in home as no one to take care of her.We are farmers and land has been transferred from parents to myself and 2 brothers in dec 14 so only asset parents have is family home and 70 k savings which is dropping fast with home payments of 900 per week.Could you ask you fair deal expert where we stand as we are at our wits end ringing people and don't know where we stand regarding the fair deal scheme.Thanks for your help


Sorry, didn't pick up this post til Friday. According to my source:

If the family were to submit an Application for Fair Deal, A Care Needs Assessment would be carried out on the Applicant. If the Applicant was deemed as needing Long Term Care then the Financial Assessment would be carried out. A couple contribute 40% of their Joint Pensions. Then the first 72,000.00 of any Cash Assets or Property Assets are not included in the Assessment. Anything over this amount of 72,000.00 is assessed at 3.75%. Any Property, Land etc that has not been transferred 5 years prior to applying to the Scheme is also included in the Financial Assessment - documentary evidence of the amount received or the market value of the Asset at the time of sale or transfer must be submitted. There is a 3 year limit on the Property which means that there is a Review done after 3 years and the value of the Principal Property is taken off the Financial Assessment but any other Property or Land will remain @3.75%. Theyallow for Prescription Costs and Property Tax.
Looks like the transfer is too late to avoid assessment. Also, even after 5 years from date of transfer, it
will continue to be assessed as income or capital.


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## Cavan 123 cars

Slim said:


> Sorry, didn't pick up this post til Friday. According to my source:
> 
> If the family were to submit an Application for Fair Deal, A Care Needs Assessment would be carried out on the Applicant. If the Applicant was deemed as needing Long Term Care then the Financial Assessment would be carried out. A couple contribute 40% of their Joint Pensions. Then the first 72,000.00 of any Cash Assets or Property Assets are not included in the Assessment. Anything over this amount of 72,000.00 is assessed at 3.75%. Any Property, Land etc that has not been transferred 5 years prior to applying to the Scheme is also included in the Financial Assessment - documentary evidence of the amount received or the market value of the Asset at the time of sale or transfer must be submitted. There is a 3 year limit on the Property which means that there is a Review done after 3 years and the value of the Principal Property is taken off the Financial Assessment but any other Property or Land will remain @3.75%. Theyallow for Prescription Costs and Property Tax.
> Looks like the transfer is too late to avoid assessment. Also, even after 5 years from date of transfer, it
> will continue to be assessed as income or capital.


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## Cavan 123 cars

Thanks Slim/Twofor1,

Are you basically saying we won't get the 3 year cap for family farms and even after 5 years we would still have to pay until all of the farm is sold which is our livelihoods now.Surely their has to be a way around this as we have our houses built on these farms etc.I am 42 and if I sign it to my 18 year old son will he have to pay also as he is training to be a farmer.JUst sounds so unfair to have to sell our heritage which is in the family almost 100 years.PLease reply folks I'm really worried now


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## Slim

It looks that way as the farm is regarded as your parent's asset and will be assessed as long as they are alive. It is a really tricky area and you should contact your local HSE office for detailed information.


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## roisin11

theroux said:


> I just spoke to the HSE and they have confirmed that the 3 year cap would still apply as long as its still her primary residence.
> 
> Also the value would be locked at the transferred value.


Could I ask you a question? My mom has been deemed as needing nursing home care and is applying for fair deal. I'm very confused on what's going to happen to the property and was wandering if you could give me the contact details of who you spoke to in the HSE regarding this? Maybe they could give me some clarity?


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## Slim

roisin11 said:


> Could I ask you a question? My mom has been deemed as needing nursing home care and is applying for fair deal. I'm very confused on what's going to happen to the property and was wandering if you could give me the contact details of who you spoke to in the HSE regarding this? Maybe they could give me some clarity?


Hi. It depends on where you live. If you look up www.hse.ie and search for 'Fair Deal' you should be led to your local HSE office which will have an office that can help. Here's the link http://www.hse.ie/eng/services/list/4/olderpeople/nhss/


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## roisin11

Thanks for that.


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## Johnbbf

Oops.


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## bellaboots

can someone answer these questions as i cant find answers any where online ......mam is in a care home 5 months we have been paying privately on the basis of what her house is valued at she has no savings .......the house at the moment is been sold does the 3 year cap apply on the money from the house if not  is there any more due after the 3 years plus she wants to gift half the sale price between me and my 3 brothers .....the house value is 230k .......thanks in advance for any help


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