Fair Deal/Nursing Homes 3 Year Cap on Application or on Entering a Nursing Home??

[deckoo]

My mum entered a nursing home 18 months ago. She is widowed. She has a valuable home but beyond that has exhausted all her assets to cover nursing home costs up until now. Does the 3 year cap apply from application into the first deal scheme, or from entering a nursing home as different sources give different answers.

If it is from when she entered a nursing home we do have other options to cover the cap until beyond the 3 years which may be beneficial to her.

Many Thanks!

 

[Brendan Burgess]

I presume that the 3 year cap refers to three years of occupation of a nursing home. It would make no sense otherwise.

Brendan

 

[deckoo]

I presume that the 3 year cap refers to three years of occupation of a nursing home. It would make no sense otherwise.

Brendan

The person from the HSE i was talking to today was telling me that it was 3 years from time of application, not from entering a nurins home - ie if you had paid 2 years privately and then applied for fair deals that the 7.5% would apply for the subsequent 3 years, which seems contrary to the information on the HSE website and the Citizens Information website - hence me doubting myself

 

[Des Pondent]

My understanding is any time in a nursing home paying privately counts towards the 3 year cap. Can’t find it at the moment but HSE’s website did say it somewhere. Citizens' information has this.

3-year cap

Some assets are only included in the financial assessment for the first 3 years you are in care. This is known as the ‘3-year cap'. It means that you pay a 7.5% contribution based on the value of certain assets for up to 3 years.
These assets can include:

• Your home
• The proceeds of the sale of your home
• Your farm or business

After 3 years, you will not give any further payment based on these assets, even if you are still getting long-term nursing home care. The ‘3-year cap’ applies whether you choose to get the Nursing Home Loan or not.

All other assets will be taken into account for as long as you are in care.

If you have already been in a nursing home for 3 years when you apply for the scheme, then you do not pay the 7.5% on your home.

https://www.citizensinformation.ie/...h-services-for-older-people/fair-deal-scheme/

 

[Brendan Burgess]

The person from the HSE i was talking to today was telling me that it was 3 years from time of application, not from entering a nurins home - ie if you had paid 2 years privately and then applied for fair deals that the 7.5% would apply for the subsequent 3 years,

That makes sense but would it come up that often?

First of all, the average stay is only about 18 months.

Secondly, would you not avail of the loan from Day 1 ?

Brendan

 

[deckoo]

That makes sense but would it come up that often?

First of all, the average stay is only about 18 months.

Secondly, would you not avail of the loan from Day 1 ?

Brendan

So there has been cash to pay nursing home fees to date privately; and there is the potential to cover the costs for the remaining 18 months to get beyond the 3 year cap timeframe. Due to the value of the home it is beneficial to pay the fees privately rather than give up 7.5% of the value of the home for the first 3 years of nursing home care.

However if the 7.5% cap only kicks in from application for fair deals scheme rather than from entering the nursing home it alters the decision making process in terms of best next step.

 

[huskerdu]

So there has been cash to pay nursing home fees to date privately; and there is the potential to cover the costs for the remaining 18 months to get beyond the 3 year cap timeframe. Due to the value of the home it is beneficial to pay the fees privately rather than give up 7.5% of the value of the home for the first 3 years of nursing home care.

However if the 7.5% cap only kicks in from application for fair deals scheme rather than from entering the nursing home it alters the decision making process in terms of best next step.

Note that the loan is 7.5% of the value of the house OR the nursing home fees paid, whichever is lower.

If you pay out less than 7.5% of the value of the house, you dont have to pay back the whole 7.5%.

 

[deckoo]

So given the following circumstances:

• She has been in a nursing home for the past 18 months and has paid privately
• Has a valuable home currently on the market
• No remaining income stream beyond state pension
• Off spring have means to give loan if required for the next 18 months
• Has not yet applied for Fair Deals Scheme

What would recommendations be for next steps in terms of fair deals vs loan?

 

[Des Pondent]

So given the following circumstances:

• She has been in a nursing home for the past 18 months and has paid privately
• Has a valuable home currently on the market
• Has not yet applied for Fair Deals Scheme

What would recommendations be for next steps in terms of fair deals vs loan?

What's a valuable house ? if it’s a €million and she is the sole owner it is likely she won’t qualify for Fair Deal.

If she does qualify for Fair Deal, the house value is only assessed for 3 years.

If she is already in under Fair Deal, she can then sell the house and the proceeds will only be assessed for the remainder of the 3 years.

If she sells the house before being accepted for Fair Deal she will be assessed on the proceeds indefinitely.

Don’t think it makes sense to sell her valuable house now, maybe sell after being approved for Fair Deal and funding granted.

One of my parents lived for 7 years under Fair Deal.

 

[deckoo]

Under Fair Deal, if she owns a house she is only assessed on its value for 3 years.

If she is already in under Fair Deal, she can then sell the house and the proceeds will only be assessed for the remainder of the 3 years.

If she sells the house before being accepted for Fair Deal she will be assessed on the proceeds indefinitely.

Don’t think it makes sense to sell her valuable home now, maybe sell after being accepted.

One of my parents lived for 7 years under Fair Deal.

Thank you,

So if she got accepted on Fair Deals before selling the home what would the financial contribution be?

• 3 years at 7.5% the value of the home (given this is her 1 remaining asset)
• 3 years at the HSE cost of nursing home care (as this willl be less than 7.5% of the value of the home.)
• 18 months at 7.5% the value of the home (given this is her 1 remaining asset)
• 18 months at the HSE cost of nursing home care (as this willl be less than 7.5% of the value of the home.)

Or if we decided not to enter fair deals for another 18 months:

• Would this be advantageous? Would she be beyond the 3 year cap as she will have been in a nursing home for that period so not have to give up any of the value of her home, or does the 3 year cap only kick in from when she would apply for fair deal?

I am clearly confused so really appreciate these contributions.

 

[Des Pondent]

So if she got accepted on Fair Deals before selling the home what would the financial contribution be?

If your mother was accepted for FD she would be financially assessed, your mothers only asset is a valuable house and her only income is the state pension. Putting aside any disregards she might be allowed, her contribution would be 7.5% of the value of the house for each of the first 3 years plus 80% of her state pension. Under FD you will never pay more than the actual cost of your care. For those who don't have savings or whose savings are gone, the nursing home loan can be applied for to pay the amount assessed on the house.

After 3 years the valuable house would be disregarded leaving your mother only paying 80% of her state pension thereafter. 80% of a full contributory pension is about €220 weekly, most nursing homes are at least €1,200 weekly, some a lot more.

I thought the 18 months paid privately would count towards the 3 year cap, citizens information would appear to back this up but the lady you spoke with in the HSE says this is not the case, possibly the rules have changed. You could call your local citizens information and ask them to check this out for you. Either way I can't see any disadvantage to Fair Deal.

The 3 year cap and the nursing home loan only apply to those under FD. If you decided not to enter FD you mother would continue to pay the full nursing home cost indefinitely.

 

[Nermal]

What's a valuable house ? if it’s a €million and she is the sole owner it is likely she won’t qualify for Fair Deal.

If she does qualify for Fair Deal, the house value is only assessed for 3 years.

If she is already in under Fair Deal, she can then sell the house and the proceeds will only be assessed for the remainder of the 3 years.

If she sells the house before being accepted for Fair Deal she will be assessed on the proceeds indefinitely.

Don’t think it makes sense to sell her valuable house now, maybe sell after being approved for Fair Deal and funding granted.

One of my parents lived for 7 years under Fair Deal.

What's the upper limit on home or other asset values before qualifying? I haven't seen one quoted anywhere.

 

[Des Pondent]

What's the upper limit on home or other asset values before qualifying? I haven't seen one quoted anywhere.

I haven't seen an upper limit quoted anywhere either, It would have been clearer if I said benefit rather than qualifying. If as a single person you have assets of say a €million, your annual assessed amount on those assets alone would be €75K which would pay for most nursing homes, so you might not benefit from FD at that time anyway.

If your only asset was a house worth a million and you had no other assets or cash, FD would be useful in that you could then apply for the nursing home loan to pay the amount assessed on the house. I have never been there though so don’t know how it works in that circumstance.

 

[Slim]

What's the upper limit on home or other asset values before qualifying? I haven't seen one quoted anywhere.

Everyone who qualifies on medical grounds will undergo Financial Assessment. Limit is once the contribution assessed equals or exceeds the cost of the nursing home, no state assistance is required, client pays the full cost but after 3 years, the principal private residence (or proceeds if sold in the meantime) is dropped from the Assessment and some state contribution may become payable. Also, if paying the nursing home fees depletes the resources sufficiently, a contribution may become payable even sooner.