Fair Deal/Nursing Homes Fair Deal - questions

[Kelmar]

Hi - I have reviewed the HSE website and got some very good general information on the Fair Deal scheme

About the Fair Deal scheme

Fair Deal provides financial support for those in long-term nursing home care. You pay part of the nursing home fees and we pay the balance. Read more at HSE.ie

www2.hse.ie

I have a few more detailed questions and was wondering if anyone can answer them;
1. If a person has assets beyond his own home then as I understand it the Fair Deal scheme will take 80% of his income (pension mostly) PLUS 7.5% per year of any other assets. Is that right?
2. If a person has some investment assets beyond his own home will they insist on taking the 7.5% from the investments first before impacting the person's home or can the person opt to take the Nursing home loan which means the cost of nursing home will be paid on the death of the person and the subsequent sale of their home. In other words if a person wants to protect their investments and have the nursing home paid from the proceeds of their home when they die can they do that?
3. The information on HSE site states that in considering a financial assessment of an applicant "The assessment will also look at any assets that you have transferred in the last 5 years" What does this actually mean? If a person has transferred money to a son in the last 5 years will the HSE hold the son liable for the cost of their parent's care if the existing assets run out? Do they really pursue this?
4. On the HSE website there is a list of nursing homes by county with prices. Are the prices quoted the actual cost of the care or would that amount need to be topped up ? If so by approx how much (% wise). I am trying to work out how much per annum the real cost will be. As an example if the cost per week is €1,000, then that will be €52,000 per annum which will be made up of 80% of pension say 10k with the remaining 42k needing to come from the person's other assets. Is that right?
5 Is the type of care delivered in these listed nursing homes the same whether the person has the means to pay the full 52k or not?
6. If a person has no assets other than their home and its worth say 200k then that would cover about 4 yrs in a nursing home. What happens beyond that?

Appreciate any guidance on any of these questions

 

[kickstart]

Hi - I have reviewed the HSE website and got some very good general information on the Fair Deal scheme

About the Fair Deal scheme

Fair Deal provides financial support for those in long-term nursing home care. You pay part of the nursing home fees and we pay the balance. Read more at HSE.ie

www2.hse.ie

I have a few more detailed questions and was wondering if anyone can answer them;
1. If a person has assets beyond his own home then as I understand it the Fair Deal scheme will take 80% of his income (pension mostly) PLUS 7.5% per year of any other assets. Is that right?

Yes.

2. If a person has some investment assets beyond his own home will they insist on taking the 7.5% from the investments first before impacting the person's home or can the person opt to take the Nursing home loan which means the cost of nursing home will be paid on the death of the person and the subsequent sale of their home. In other words if a person wants to protect their investments and have the nursing home paid from the proceeds of their home when they die can they do that?

There is no link between the cost of the home and the cost of care to the applicant if they use the Fair Deal Scheme. So regardless of cost, the FDS will establish all the assets and income, and charge the applicant 7.5% of value of the assets, and 80% of the income every year. After 3 years, the 7.5% of the family house bit no longer applies.

So, for a sole owner/occupier, this is 7.5% of the value of the family home per year. If jointly owned, then 7.5% of half the value of the family home.

If the applicant wants to hold onto their interest in the family home, then they simply pay out the 7.5% of the value of their holding it each year for 3 years. So if they own the house entirely, and the house is worth €200k, they pay €15,000 per year (along of course, with 80% of their income).

If they don't want to, or can't pay this €15k per year, they can avail of the Nursing Home Loan, which pays it on their behalf, and recovers it when they die from their estate.

3. The information on HSE site states that in considering a financial assessment of an applicant "The assessment will also look at any assets that you have transferred in the last 5 years" What does this actually mean? If a person has transferred money to a son in the last 5 years will the HSE hold the son liable for the cost of their parent's care if the existing assets run out? Do they really pursue this?

If the assets were transferred in the last 5 years, it means they are treated for income calculation purposes as if they are still owned by the applicant. I don't know how keenly they pursue this. I assume pretty keenly though.

4. On the HSE website there is a list of nursing homes by county with prices. Are the prices quoted the actual cost of the care or would that amount need to be topped up ? If so by approx how much (% wise). I am trying to work out how much per annum the real cost will be. As an example if the cost per week is €1,000, then that will be €52,000 per annum which will be made up of 80% of pension say 10k with the remaining 42k needing to come from the person's other assets. Is that right?

I can't answer about how much is included - I'd guess it's different with each service provider, so you should ask. Additional things like excursions, newspapers, hair and beauty treatments are almost definitely not covered. In your example, if the cost is €52k, then the Fair Deal Scheme will meet that cost directly, and charge the 80% of income and 7.5% of assets from the applicant, regardless of how much that actually comes to. The cost of extras must be met from whatever income the applicant has left over.

5 Is the type of care delivered in these listed nursing homes the same whether the person has the means to pay the full 52k or not?

Yes; if they avail of the Fair Deal Scheme, the full €52k is met by it. If they have any income, then they are charged as above, regardless of the cost of the care they receive.

6. If a person has no assets other than their home and its worth say 200k then that would cover about 4 yrs in a nursing home. What happens beyond that?

They are covered for life. If they avail of the Nursing Home Loan, then they will rack up 7.5% of the value of the house for 3 years, which must then paid out by their estate when they die.

 

[Kelmar]

Many thanks BrianB - this is very helpful!

Just one point of clarification; in your response you say;
"There is no link between the cost of the home and the cost of care to the applicant if they use the Fair Deal Scheme. So regardless of cost, the FDS will establish all the assets and income, and charge the applicant 7.5% of value of the assets, and 80% of the income every year. After 3 years, the 7.5% of the family house bit no longer applies"

Does this mean that if the published cost of care is 52k and if the person has assets 1,000,000 and income of 16k they would pay 75k plus 80% of 16k = 88k. Or would they pay the 52K?

 

[kickstart]

Many thanks BrianB - this is very helpful!

Just one point of clarification; in your response you say;
"There is no link between the cost of the home and the cost of care to the applicant if they use the Fair Deal Scheme. So regardless of cost, the FDS will establish all the assets and income, and charge the applicant 7.5% of value of the assets, and 80% of the income every year. After 3 years, the 7.5% of the family house bit no longer applies"

Does this mean that if the published cost of care is 52k and if the person has assets 1,000,000 and income of 16k they would pay 75k plus 80% of 16k = 88k. Or would they pay the 52K?

From my understanding of it, they would pay €88k per year. The FDS doesn't suit everyone - if you have a lot of assets like this example, you come off worse financially.

 

[elcato]

From my understanding of it, they would pay €88k per year.

I'm pretty sure this is not right and they would not be worse off. They simply pay the 52k.

BUT: It's been a while since I applied and there's been a few changes since.

 

[kickstart]

I'm pretty sure this is not right and they would not be worse off. They simply pay the 52k.

BUT: It's been a while since I applied and there's been a few changes since.

I'm pretty sure this is not right and they would not be worse off. They simply pay the 52k.

BUT: It's been a while since I applied and there's been a few changes since.

I'll be happy to be wrong (I've plenty of practice). Something on the FDS web page that backs your statement up is:

"Your contribution towards the cost of your care will be worked out after a financial assessment. The HSE then pays the balance between what you pay for your care and what the nursing home charges for providing that care."

...BUT, I see no explicit mention of a cap, and that sentence could be viewed as living some room for ambiguity, and further in to the HSE web site on it, they then say:

"If you have little income and assets, you pay less. If you have more, you pay more." This is what has led me to the statement up above.

As I say, I'd be happy to be wrong, and may well be.

An important point to note is that you can apply for the FDS, but not go on to take it up: as they final arbiter of what they will charge, it seems to be no harm to apply, and you'll get an authoritative annual figure.

 

[AlbacoreA]

My understanding you don't more than the cost of your care.

Fair Deal Scheme

People who move into registered nursing homes may receive financial support from the HSE under the Nursing Homes Support Scheme, also known as the Fair Deal scheme.

www.citizensinformation.ie

There are safeguards built in to the Financial Assessment which ensure that:

• Nobody will pay more than the actual cost of care

The cost of nursing homes is 1500~2000 ish a week, so 80~110k a year.

That often won't include other things like activities.
Also not included are other medical costs like consultants outside the home. (if you don't have a medical card)

 

[AlbacoreA]

The issue assets other than your PPR, is that they are not capped at 3yrs.
So in theory after 13~14 years they will be consumed by the scheme, if needed to cover the cost.
They recalculate it yearly though.

 

[twofor1]

They recalculate it yearly though.

I think it’ very important to point out;

A financial reassessment does not happen automatically, it must be requested.

A reassessment is usually beneficial to most and particularly those who did not avail of the nursing home loan.

I suspect there are many out there who only ever had their original financial assessment and are now paying far more than they need to for Fair Deal.

 

[Dinarius]

From my understanding of it, they would pay €88k per year. The FDS doesn't suit everyone - if you have a lot of assets like this example, you come off worse financially.

If I'm understanding this correctly, is it the case that the worse off you are, the more you benefit? i.e. the less you have to lose?

If so, I guess that means that the wealthier you are, the more you pay for your care, which is as it should be, I suppose.

Presumably, it also means that the Fair Deal scheme is also open to those who have little or nothing.

Thanks.

D.

 

[AlbacoreA]

If I'm understanding this correctly, is it the case that the worse off you are, the more you benefit? i.e. the less you have to lose?

If so, I guess that means that the wealthier you are, the more you pay for your care, which is as it should be, I suppose.

Presumably, it also means that the Fair Deal scheme is also open to those who have little or nothing.

Thanks.

D.

Depends how altruistic you about contributing a lot more than others.

Its costs about 1 Billion to fund, and its running with a large deficit....

 

[hydrocarbon]

Some additional comments:

A useful way to view the Fair Deal scheme is as a means-tested government subsidy. Depending on assets/income the subsidy in a given year may turn out to be zero, but you can never be "worse off" using the Fair Deal scheme than paying privately. The worst that can happen is that you pay 100% and the HSE pays 0% - i.e. there is no benefit at that time.

Also even with a zero subsidy applying for the Fair Deal scheme may allow someone to pay the negotiated NTPF/Fair Deal rate, which will be less than the nursing home's private rate.

In the Dublin area many nursing homes have a Fair Deal rate in the range of €1200 to €1300/week. In addition activity fees/hairdressing etc. run at about €200 - €250/month. These additional fees are not covered by the Fair Deal scheme. Drugs/medicine are also not included - the same Medical Card/Drug Payment schemes apply as if someone were not in a nursing home.

The level of financial due diligence performed by the HSE at the time of the Fair Deal application may vary, but on death/inheritance everything will be cross-checked by Revenue so if the assets/disposals previously declared to the HSE don't match up with the assets/disposals used for probate/CAT purposes there will be a problem. Any HSE subsidy overpayments due to undeclared assets will need to be paid back from the estate before probate is granted, as far as I understand it, presumably with interest/penalties etc.

 

[Dinarius]

Thanks for the reply.

In our case, funding of €1200/1300 per week would be out of the question. It would have to involve qualification for the Fair Deal scheme or bust.

On a related matter; there was an item on Morning Ireland the other day about people not putting in writing their preferences for care should they become incapacitated and the legal issues that may arise. I'm not sure I fully understood what change the spokesperson was lobbying for.

My parent has not put in writing their preferences. So, if for example they had a severe stroke and had to be put into care, are there legal loopholes we would have to jump through before this was possible?

Many thanks.

D.

 

[elcato]

If you are talking specifically about the Fair Deal then you can apply to be the Care Representative for your parent(s). you will deal with all matters involving Fair Deal and will the the point of correspondence for the HSE. You can also apply for the auxillary loan for the said person when/if they go into a nursing home.

 

[fidelcastro]

I'll be happy to be wrong (I've plenty of practice). Something on the FDS web page that backs your statement up is:

"Your contribution towards the cost of your care will be worked out after a financial assessment. The HSE then pays the balance between what you pay for your care and what the nursing home charges for providing that care."

...BUT, I see no explicit mention of a cap, and that sentence could be viewed as living some room for ambiguity, and further in to the HSE web site on it, they then say:

This is completely wrong - terrible misinformation for the OP!!!. What rubbish, tin hat brigade.

As mentioned, the Fair deal is a subsidy - you DONT need to apply for it.. in fact the State would be alot happier if you didnt!!., so if your worried, simply dont apply, and enter into a private contract with the nursing home. JOB DONE!.

If your assessed weekly means are greater than the homes weekly fee, then you pay the weekly charge direct to the Nursing home without any Top up from the HSE - you are a private patient, you sign a private contract between you and the nursing home. If you dont pay up, you will owe this money and your nursing home contract will be revoked, and your relative discharged..

If your calculated weekly means is less than the weekly fee charged by the home, then you may be entitled for Top Up. Be aware that the NHSS scheme money budgetted can run out as one gets closer to year end. So, even if you are entitled, at time of application, if the kitty is dry then tough s*ite paddy, wait till funding is renewed at start of next budget cycle.

Once you are approved and receive a confirmation that there is funding , you are covered from then on. You should apply yearly for a reassessment to as your savings will be diminished by 7.5% p.a.

Even with cover, its a Top up from HSE. You still have a contract - a standing order form will need to be signed to have monies debited from your relatives current account, to the Home, and you must not spend the relatives savings on anything except what is required for their care. e.g. hair dressers, clothes, health insurance etc. keep receipts. The re-assessment after year 1 will assume this scenario, any other spending is not allowed in their calculations, so you will need to be careful with the savings.

For example, we pay 4375 per month direct & HSE Top up is 205 euro p/w to the home.

 

[noproblem]

Wow, nursing home costs are not small change. With all this talk about the oncoming grey brigade getting larger and larger I hope people are taking all this in because the day of a son or daughter, etc, minding us is gone. (in most cases) Older people need to sit down, look at their assets, sort out wills, and do lots of calculations so as to be able to avail of funding, talk to family and be ready for getting older and not being able to manage themselves.

 

[Dinarius]

This is completely wrong - terrible misinformation for the OP!!!. What rubbish, tin hat brigade.

As mentioned, the Fair deal is a subsidy - you DONT need to apply for it.. in fact the State would be alot happier if you didnt!!., so if your worried, simply dont apply, and enter into a private contract with the nursing home. JOB DONE!.

If your assessed weekly means are greater than the homes weekly fee, then you pay the weekly charge direct to the Nursing home without any Top up from the HSE - you are a private patient, you sign a private contract between you and the nursing home. If you dont pay up, you will owe this money and your nursing home contract will be revoked, and your relative discharged..

If your calculated weekly means is less than the weekly fee charged by the home, then you may be entitled for Top Up. Be aware that the NHSS scheme money budgetted can run out as one gets closer to year end. So, even if you are entitled, at time of application, if the kitty is dry then tough s*ite paddy, wait till funding is renewed at start of next budget cycle.

Once you are approved and receive a confirmation that there is funding , you are covered from then on. You should apply yearly for a reassessment to as your savings will be diminished by 7.5% p.a.

Even with cover, its a Top up from HSE. You still have a contract - a standing order form will need to be signed to have monies debited from your relatives current account, to the Home, and you must not spend the relatives savings on anything except what is required for their care. e.g. hair dressers, clothes, health insurance etc. keep receipts. The re-assessment after year 1 will assume this scenario, any other spending is not allowed in their calculations, so you will need to be careful with the savings.

For example, we pay 4375 per month direct & HSE Top up is 205 euro p/w to the home.

Why do you have to pay €4375 per month?

Is it because the relative in the home is deemed to be well off enough not to need HSE support?

My only existing example is my wife's relative who sold her house and moved into a nursing home. The State takes her pension and have been taking a monthly sum from the proceeds of the house sale. But, when this runs out - soon - my understanding is that the State will then cover the shortfall, and not the person's family. Isn't this the case?

You also mention that they State would prefer if you didn't apply for funding. I'm not sure what you mean by this. That is surely what we should be doing in the event of our relative needing full-time care. You're paying about €1100 per week. We don't have that (€2200 before tax) kind of money. Isn't it precisely the less well-off that this is targeting?

Am also curious as to how they arrived at the top-up figure of €205 per week.

Thanks for the reply.

D.

 

[fidelcastro]

Why do you have to pay €4375 per month?.
The Fair Deal is a top up, or subsidy. In our case, the top up is of the order of 205pw. So that is roughly 4*205p/w=820pm. So the actual charge from the home is the sum of 4375+820 per month, we pay the E4375 by standing order direct to the home, [we have a contract], the HSE sends them the other 820pm.


Is it because the relative in the home is deemed to be well off enough not to need HSE support?
Modest savings, small house, and modest occupation.

My only existing example is my wife's relative who sold her house and moved into a nursing home. The State takes her pension and have been taking a monthly sum from the proceeds of the house sale. But, when this runs out - soon - my understanding is that the State will then cover the shortfall, and not the person's family. Isn't this the case?

Not exactly. As her savings diminish, the 80% of her pension will not be sufficient to cover the bill. So unless you never applied for an annual reassessment, your statement holds true. If you submitt annual re-assessment of your savings and means, then a decreasing pot will be reflected in annual increases in the HSE subvention.

But if YOU dont re-submitt annually to reflect the decrease in assets, the HSE top-upwill remain a constant and your fee to the nursing home will be a constant.

When her savings go below 36K, the State will cover the delta. The persons family is NOT responsible for the delta, they only have to obey the FD rules in regard to what her savings can be used for e.g. clothing, health insurance. No gifts or presents allowable to be spent from the relatives savings. In other words, her cash is strictly for her care. .

PS
It was a mistake to sell the house. The state only takes into account 7.5% of value of house for 3 years in its calculation of top-up. Hence after 3 yrs , you would expect a step change in the value of the FD Top up. Selling it means the State will take 100% of house, save for final 36k of her total savings.[/QUOTE]

 

[fidelcastro]

Wow, nursing home costs are not small change. With all this talk about the oncoming grey brigade getting larger and larger I hope people are taking all this in because the day of a son or daughter, etc, minding us is gone. (in most cases) Older people need to sit down, look at their assets, sort out wills, and do lots of calculations so as to be able to avail of funding, talk to family and be ready for getting older and not being able to manage themselves.

yes, there is a lot of mis-understanding about responsibilities of the family vs HSE. Some of these nursing homes are not very nice to live in, so the family needs to visit and look at what is best. Like vetting your creche/school for your kids.

 

[imalwayshappy]

Hi All

Can anyone recommend an accountant who knows about the fair deal scheme? In in my experience to date, many accountants do not know much about this scheme. Ideally, I am looking for someone who is good at tax planning and succession planning. Thanks