Is disposing of assets to avail of the Fair Deal Scheme fair?

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Annieindublin said:
They were savers all their lives and have a substantial bank account. Currently it’s being spent on care to keep them in their own home, long may that continue. Their kids aren’t in need, their grandkids.., well yes of course.., the 20/30 year olds could really use a hand but they aren’t going to get it.
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Each to their own, but I have to think why not.

My parents distributed most of their assets aged either side of 80, kept the pensions, the house and a little cash. I can see us doing the same thing. What does an 80 year old need €300k in cash for?
 
Brendan Burgess said:
Maybe I misunderstood the post.

He has a house worth €300k and €300k in cash. He proposes, in effect, to give the house to one of the sons and €30k to each of his grandchildren.

If I have understood it correctly, is that wrong or is it just good financial planning?

Edit: I am fairly sure that is what is proposed:



Brendan
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No plans for Dad to be destitute ;-) Just trying to ensure good financial planning.
If he were to act on this in the morning he would still have ~30K savings himself, plus continue to receive his pension.
There is a level of trust on his behalf that some of his offspring would look after him if more were required, perhaps Johnny!
I'd like to think that we would look after our own Dad and ensure he is not wanting for anything.... our parents made many sacrifices for us.

As for Marsupial's attempt to be provocative, I appreciate the hyberbole to make the point. It is a emotive topic. I hope your luck holds out and les enfants or les grand-enfants are fortunate and wealthy enough to buy a house themselves ..... not all are, no matter how hard they work.
As I said above, I agree with us paying our taxes etc through our working lives to ensure the elderly receive the care they need. What's hard to take is paying those taxes, saving whatever can be saved after tax and then paying again from those (already taxed) savings when one needs care later in life. I think the workers of the previous generation have already paid their dues and deserve to spend or dispose of their savings as they wish, rather than being penalised for saving and end up being obliged to pay .... again.
 
hero25 said:
There is a level of trust on his behalf that some of his offspring would look after him if more were required, perhaps Johnny!
I'd like to think that we would look after our own Dad and ensure he is not wanting for anything.... our parents made many sacrifices for us.
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No, you want the taxpayer in general to look after him. That is clear from your very first post.
 
hero25 said:
What's hard to take is paying those taxes, saving whatever can be saved after tax and then paying again from those (already taxed) savings when one needs care later in life.
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Why should we not all pay for our needs throughout our life?

We should make plans to fund our care and our health in advance.

If someone has €600k and a very generous public service pension, they should not be imposing on the taxpayer.

Brendan
 
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While the state may avoid paying nursing home fees for my parents having cash gives them choices.
If you’ve nothing and the state decides that the most cost effective way to care for you is in a nursing home you’ll have no choice.

Policies change and you run the risk of further hse or whoever taking your council house and moving you to a home miles away. Might help solve some of the housing crisis too.

Having your own home and some assets means you can call the shots to a certain extent.
 
While in Ireland, there are a lot of expectations for parents to give financial help to their children, in some countries children have some financial responsibilities towards their parents and have to pay for their care (even if they haven't received anything from them). So to me, the fair deal is not always that bad.

My parents distributed most of their assets aged either side of 80, kept the pensions, the house and a little cash. I can see us doing the same thing. What does an 80 year old need €300k in cash for?
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My parents have a fair amount of cash and assets. Both also have a good defined benefit pensions. My father is 82. He is buying a reasonably big car, planning to build a new house for his old age in the winter (he has planning permission), organising his trip to Spain in September... They have a busier social life than I have... And probably a bigger monthly income. So reducing their savings would reduce their dreams and plans... (Particularly if their cash was reduced to 30k) They are getting older but are not dead... I haven't received anything from them yet. I know I probably will eventually... Do I agree with all their ways and plans? No. Would I have been grateful to receive some money when I needed it more? Probably. But that's their money, their life... I don't see why they should limit their expectations for my benefits. And they will be able to pay for their care if they need it and the way they want it.
 
Annieindublin said:
While the state may avoid paying nursing home fees for my parents having cash gives them choices.
If you’ve nothing and the state decides that the most cost effective way to care for you is in a nursing home you’ll have no choice.

Policies change and you run the risk of further hse or whoever taking your council house and moving you to a home miles away. Might help solve some of the housing crisis too.

Having your own home and some assets means you can call the shots to a certain extent.
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This to me is the crux of the matter. Choice. To be able to have a choice of home I might end up in. To be able to make a choice around what extras I want to have such as hairdressing, activities etc. Everything costs extra.

I get the thought process about reducing your assets to the minimum so that you can have care for free, but to me, free wouldn't be free without my freedom of choice.

Also, no matter how close or loving a family is, I wouldn't like to be overly dependent on anyone if I can help it. As I've said before in answer to other posts, families can fall out and apart for the most obscure reasons when least expected. Elderly parents can suffer from the consequences of these fallouts if they have not held on to their own money and independence for as long as possible.

I'm not saying don't be generous to your next of kin as you go through life. I'm just saying take care of your own future first.
 
Brendan Burgess said:
Why should we not all pay for our needs throughout our life?

We should make plans to fund our care and our health in advance.

If someone has €600k and a very generous public service pension, they should not be imposing on the taxpayer.

Brendan
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True but should there not be a reward for being prudent in life?
 
Annieindublin said:
On the plus side my dad retired at 62 and he’s still doing well at 90. The civil service pension people didn’t expect that!
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Yes they did! The actuarial calculations give him until 97, at which time he's expected to do the decent thing.

On no account should he live to be 100 and expect a cheque for €2,540 from the President. That would be greedy!
 
We have a crazy system where you can:

1: Be born here, never work, never contribute, take from the system all your life and have everything paid for you including nursing home care.

2: Work but flitter away all your money having a great time, never save, never invest etc and have your nursing home care paid for you.

3: Show up in this country after asylum shopping etc. have no real connection to the country but have everything paid for you including nursing home care.

4: Work hard, save, invest, pay for everything and then build up some funds after paying tax for everyone else which will then be taken by the state to pay for your nursing home fees + a hefty chunk taken as inheritance tax afterwards.

I honestly don't understand how anybody could fall into 4 without doing as much as possible to minimise their exposure. The sensible thing to do is try and arrange your affairs to maximise the amount of money you can personally control the dispersal of yourself to family etc. Nobody in group 1-3 will thank you for your money and the government will waste your life's savings in seconds on group 1-3 while enriching a small few
well connected people - don't be a fool.
 
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I’m heading for 4… but actually I’m not. As soon as I retire I plan to travel and spend winters in a warmer climate. It’s not a scheme to dispose of my assets it’s a preference.

My kids already live abroad, for a number of reasons, I can’t leave yet, got the crinkles to mind, but when work and other commitments cease I’m leaving for some sunshine and heat.
 
I spoke to a colleague who was involved in the setting up of FairDeal.

He proposed it as social insurance.

The Govt did not go ahead with that proposal.

Instead, it is means-tested social assistance.

FYI, it is social insurance in Germany, (Pflegeversicherung).

kpmg.com

Germany – Increased Social Security Contribution Thresholds for 2024

GMS Flash Alert 2024-003
kpmg.com kpmg.com

It costs 4% of wages up to 62,100.
ER = 1.7%
EE = 2.3%

less if you have children.
 
If the rules are that gifts more than five years ago are ignored, then they’re the rules, and a gift made, say, six year earlier should be ignored.

The rules are the rules.

Do we think that other rules should also be disregarded? e.g. claiming the Bike to Work Scheme regularly in line with the rules or gifting grandkids €3k a year? Maybe it would be more morally correct to do it every two years?

Five years was chosen and they’re the rules of the game.
 
Brendan Burgess said:
I agree with you Marsupial. There is something wrong with the system whereby someone with €600k of assets can give them away and then get the rest of us to foot the bill.
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This behaviour is driven in part by the bizarre handout the state gives to children receiving €300,000+ in gifts/inheritance from parents tax free.

hero25 said:
Apart from his old OAP, Dad or his children have never received a cent in welfare from the State. He is one of many of that generation who worked hard, paid their taxes, paid for their own house, educated their children, expected no handouts and saved hard.
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So he refused to claim child benefit, never used the HSE or any other public services, all his kids were home schooled, etc.?

As has been pointed out many times on AAM, unless you are a child-free, middle-aged high-earner then you are getting something back from the state.
 
arbitron said:
This behaviour is driven in part by the bizarre handout the state gives to children receiving €300,000+ in gifts/inheritance from parents tax free.

So he refused to claim child benefit, never used the HSE or any other public services, all his kids were home schooled, etc.?

As has been pointed out many times on AAM, unless you are a child-free, middle-aged high-earner then you are getting something back from the state.
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But rule no 1. of Irish self-righteous begrudgery is that the other guy is always getting more from the State than I am!
 
T McGibney said:
Its long been public policy that senior citizens should be encouraged to divest themselves of surplus assets particularly in advanced old age.
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From an economic point of view it’s preferable too.

People in their 30s with capital are far more likely to innovate and start businesses than people in their 80s.
 
arbitron said:
This behaviour is driven in part by the bizarre handout the state gives to children receiving €300,000+ in gifts/inheritance from parents tax free.



So he refused to claim child benefit, never used the HSE or any other public services, all his kids were home schooled, etc.?

As has been pointed out many times on AAM, unless you are a child-free, middle-aged high-earner then you are getting something back from the state.
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In the UK, gifts aren’t taxable at all. I can give €5bn to my kids, and once I live for seven years, it’s completely tax-free.

There are also arguments that if someone earns €100 and pays €52 in tax, they should be free to do whatever they like with their €48.

We have a threshold of €335,000 and my sense is that it’s about right in tbe context of the above.
 
Gordon Gekko said:
If the rules are that gifts more than five years ago are ignored, then they’re the rules, and a gift made, say, six year earlier should be ignored.

The rules are the rules.
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But we should keep rules under review. Maybe 5 years is too long or too short?

Maybe we should make all gifts taxable at 33% and then scrap the 5 years.
 
Gordon Gekko said:
In the UK, gifts aren’t taxable at all. I can give €5bn to my kids, and once I live for seven years, it’s completely tax-free.

There are also arguments that if someone earns €100 and pays €52 in tax, they should be free to do whatever they like with their €48.

We have a threshold of €335,000 and my sense is that it’s about right in tbe context of the above.
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I’d rather see them pay less tax on their earned income and have higher taxes on unearned income, inheritance and gifts.

And can we please stop with the “worked hard all their life”, “built the country” and “hard earned money” nonsense.
The generation that are now retired are also the ones who bankrupted the country during the Celtic Tiger and most of their wealth is due to property price inflation and pension fund inflation, neither of which was earned.
 
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