Fair Deal/Nursing Homes Fair Deal house - "nursing home loan" - better to avoid and pay out of cash assets?

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podgerodge

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Quick one - am I correct in saying that if you don't avail of the nursing home loan (that is available to avoid paying 22.5% of the house over 3 years), as you can manage the 7.5% per year out of current cash assets, are you better off doing so?

House €700k
Cash €200k.

  1. €52,500 taken as 7.5% of house in year 1
  2. €15,000 taken as 7.5% out of €200k cash in Year 1
  3. Is 7.5% of house in year 2 and 7.5% of cash in year 2 calculated based on remaining €132,500 i.e. you have spent €52,500 previous year fulfilling the 7.5% of house, therefore you have less cash assets in year 2. Or is the €52,500 house funds disaallowed as a deduction on cash assets?
  4. Taking this further, if it's an allowable deduction, in Year 3, one would start with €132,500-€52,500 = €80,000 for 7.5% tax on cash - or does 7.5% cash charge apply prior to deduction of €52,500.
Hope that makes some sense. But perhaps I'm completely lost on this!

Edit:
Above example didn't take into account the first €36k assets exempt. Thanks.
 
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No such thing as a quick one with Fair Deal I’m afraid, it's full of complications. We opted to use savings rather than get the loan, in our case it was the right thing to do but that might not apply to all who have the choice.

Our experience was, if you do nothing, your original assessed contribution, based on the €200k savings stays the same every year, even though a lot of that €200k is no longer there after year 1, 2, 3 etc.

However, you can apply to be re-assessed approaching the end of every year. If you do this you will then be assessed on the new lower cash balance. It does not happen automatically, you have to apply each year.

Apart from whatever amount is spent on nursing home fees, a lot more cash will go on maintaining / insuring the family home, possibly VHI, medical costs and many other different expenses that will see that €200k drop rapidly.
 
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Can anyone tell me please , is it solicitor who pays HSE ?
A lot of confusion here . How long should it take for HSE to look for there money after sale of house . Would really appreciate any knowledge that people have .
 
You should get professional legal advice.

I appointed a solicitor to do probate so he paid the HSE from the house sale money.

I think if the executor is doing probate themselves, and needs the house sale money to pay the loan, again it’s the solicitor handling the house sale that pays the HSE from the house sale money, as he has to give an undertaking to the buyer that the charge on the property will be removed.

I think it is up to the executor to deal with the HSE loan issue, if the executor is doing probate and the house is not being sold.

The HSE expects repayment within a year of death, thereafter interest applies from date of death.

The above is only my understanding from bar stool discussions with others in similar circumstances, best to get professional legal advice.
 
We went down the road of cash assets rather then the loan. Not sure who pays the HSE but we were actually owed a refund so it was the solicitor dealing with probate who got the money paid as part of the estate. Loan is repaid to revenue so I am assuming it comes up as part of the tax clearance element of probate.
 
How does a refund situation occur thedaddyman?
@thedaddyman
 
How do the HSE take the 7.5% of your house (for 3 years), and cash (on-going) and 80% of pension?

I am applying for Fair Deal at moment, and my parent has already gone into a home (we are privately paying out of their bank account) while we do the Fair Deal application.

I have access to the bank account and have been paying bills like the nursing home, but I don't have a Power of Attorney.

So I am wondering how these payments will actually be made - is it a direct debit mandate that would be completed, and will I run into any problems with the on-going operation of the account on their behalf if the bank sees HSE involvement?

Thanks.
 
We had a POA in place so was more straightforward but in our case the pension was already being paid into a bank account and the HSE (in our case the local hospital) took the money via a DD which we had to sign off on. Assuming the house was valued as part of Fair Deal, then in effect you need to have the cash in place to fund the 7.5% or potentially take out the loan. Note the DD doesn't have to come out of your parents account.

You'll also need to to pay the home seperately for things like hairdressers, newspapers etc but be aware that some will try and charge regardless of whether your parent can avail of the services or not.

My experience is that the Fair Deal team are very helpful.
 
I did not have Power of Attorney, with the approval of my parent and with my siblings being fully aware, I controlled the bank accounts online. Pension came in, direct debits for nursing home, utilities, alarm monitoring etc all went out, I could do most online, debit card could also be used when needed for things like house insurance etc.

Siblings were given statements, any non obvious debits such as debit card purchases for clothing etc were explained and receipts kept.

I didn't run into any problems.
 
If you originally could not get a medical card due to too high an income, and now the HSE takes 80%, can the lower income as a result then entitle you to a medical card, or are you still deemed to be on the higher income for eligibility purposes?
 
To add to my previous question, like @Des Pondent I have no POA, but have access to accounts with family agreement. I am waiting for the financial assessment to be completed, and I am wondering how does the HSE get its money from the bank account if I have no POA? (i.e. the 7.5% of the house and 7.5% of the income/assets).
 
In my experience (and this is going back a couple of years), the HSE pay the nursing home the assessed amount under Fair deal and you pay the rest, usually via DD. The % figures are used to calculate what you have to pay the nursing home, not that you have to pay over the 7.5% directly to the HSE.

Note if you don't have the cash assets to cover the house proportion, that is potentially where the Fair deal loan can kick in
 
podgerodge said:
I am wondering how does the HSE get its money from the bank account if I have no POA? (i.e. the 7.5% of the house and 7.5% of the income/assets).
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You pay your assessed amount based on the house and income / assets directly to the nursing home, the HSE pays them the balance.
You give the nursing home the bank details and they will direct debit that account.
Alternatively you can do an EFT on line each month.
 
Thanks @Des Pondent . and @thedaddyman

In relation to the house proportion, if the nursing home resident is not capable of signing things, I just do a transfer from their account as I have access, or would the bank query a large outflow like this, or does fact that it is HSE make things sufficient.
 
Is a signature needed for a direct debit ? My parent would have been able to give a signature of sorts but I think I just gave the nursing home the account details and they then direct debited the account every month.

I have often changed utility providers etc, given my bank details and they then direct debit that account without any signature needed.

I don’t know if your parents' bank will question large transfers, in our case anyway the bank questioned nothing.
 
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