When does the Fair Deal loan have to be repaid?

Brendan Burgess

Brendan Burgess

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From Revenue.ie

If the person in care dies
The due date for repayment is 12 months after the death of the person in care. Interest will be charged on any payments made after the due date. Interest will be charged from the date of death and not the due date of the loan repayment.

If the property is sold or transferred
The due date for repayment is 6 months after the date of sale or transfer of the property on which the Charging Order exists. Interest will be charged on any payments made after the due date. Interest will be charged from the date of sale or transfer and not the due date of the loan repayment.

For example...

1 January 2020 , the person dies.

Probate granted 1 November 2020

House sold and proceeds received 1 March 2021

The estate does not have any funds other than the house.

Brendan
 
Technically you are supposed to pay the interest but that scenario happened to my mothers estate a few years ago and the solicitor was able to handle it without penalty. Probably doesn't answer your question though as regards the hows and whys.
 
Thanks.

In practical terms, it would be very unusual to get a grant of probate and a house sold within 12 months.

So they end up paying 8% interest from the date of death.

Brendan
 
In the case you outline, interest on the amount owed would apply at a punitive rate of .0219% per day for the 14 months since death.

I asked revenue for an extension, explaining that the house sale was going through but due to the pandemic it was delayed and would not be complete within a year of death.

Revenue replied stating that they are the collection agents for the HSE and could not grant an extension to the collection timeframe and are bound by legislation to charge interest from the date of event.

But the reply went on to say, once the principal amount is paid, the interest on late payment can be appealed and revenue takes a fair and pragmatic view and judges each case on its own merits.

From this response it appears there is some flexibility to waive the interest for genuine cases though I have no idea how long beyond the year you might get away with.

In this case there was also no cash in the estate, some of the beneficiaries then decided to pay revenue from their own funds before the due date and were refunded from the house sale proceeds before distribution.
 
Thanks twofor1

That is very useful to get the first hand experience of it.

If Revenue waives the interest, you might let me know.

Brendan
 
Hi Pinoy

Three big variables:
The organisation and efficiency of the Executor
The speed of the Probate Office
The housing market

I would say that very few houses are sold within a year of the person dying.

But if the deceased has left cash, it could be used to repay the Fair Deal Loan within the year.

Brendan
 
Brendan Burgess said:
If Revenue waives the interest, you might let me know.
Click to expand...
Not knowing when the sale would close or how much leeway would be allowed some of the beneficiaries paid revenue in full before the due date from their own funds and were then refunded from the house sale proceeds before distribution. So no interest waiver applied in this case.
 
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