Fair Deal/Nursing Homes fair deal loan versus using assets

[Adriana]

we have been told that it is better to take our a FD loan rather than using assets (income in the form of pensions and rent) to pay for a nursing home, as if so, the amount of the loan will be deducted from the person's assets when calculating the FD contribution. is this true?

 

[Slim]

No, the FD loan only arises after the financial assessment has been carried out. The assessment will take into account household income, assets(joint & individually held) after deduction of disregards, 36k/72k (individual/couple). Only then, does the individual or family decide whether or not to apply for the loan. As 80% of income is assessed, it's usually paid from monthly income. The loan is most useful to cover the 7.5% of assets for which the cash might not be readily available.

 

[Des Pondent]

is this true?

I don’t think so.

Your assessed contribution remains the same with or without the loan.

It doesn't happen automatically, but you can apply to be reassessed every year, with or without the loan.

There might be other reasons to avail or not of the loan.