Health Insurance Fair deal question/example, help needed

Mochila

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My (widowed) Dad recently had a stroke and will now need care in a nursing home. We are looking at the Fair deal scheme. Approx 4 years ago, he gave each of us (4 children) €25,000 each. He has approx €50000 in savings, and a house worth 350,000.

Does anyone know how they will assess his savings? I spent my gifted money on house improvements, I'm sure the others have v little left too. We are worried we will either not afford his care or end up in debt.

Can anyone shed some light? Thank you.
 
My (widowed) Dad recently had a stroke and will now need care in a nursing home. We are looking at the Fair deal scheme. Approx 4 years ago, he gave each of us (4 children) €25,000 each. He has approx €50000 in savings, and a house worth 350,000.

Does anyone know how they will assess his savings? I spent my gifted money on house improvements, I'm sure the others have v little left too. We are worried we will either not afford his care or end up in debt.

Can anyone shed some light? Thank you.
Hi. Your Dad's savings may be assessed at €150k, to include the gifts within the past 5 years. I say 'may' as it is not certain the HSE will seek statements that far back, but you should assume they will. There is an exemption for the first €36k so his contribution will be: 80% of pension/income plus 7.5% of €114k plus 7.5 of €350k (for three years only). The financial assessment can be reviewed each year as savings are depleted. The contribution in respect of the home can be deferred until your father's death. The element that will be assessed on your gifts amounts to €7.5k pa amongst 4 of you. If you can carry the cost until your father's passing, you can probably recoup that from the estate, assuming it is left to you all equally.
 
Thank you so much, that's really helpful. I did wonder if they would expect all of his savings, and was beginning to panic that they would look for all his money back!
So we can defer the house portion. Am I right in saying the contribution would be
approx 114k x 7.5% /52 = approx €165 per week? The rest we could defer?

I think the form says bank statements for the previous 6 months, although I do know they asses 5 years. Is the 5 years just self declared?
 
Thank you so much, that's really helpful. I did wonder if they would expect all of his savings, and was beginning to panic that they would look for all his money back!
So we can defer the house portion. Am I right in saying the contribution would be
approx 114k x 7.5% /52 = approx €165 per week? The rest we could defer?

I think the form says bank statements for the previous 6 months, although I do know they asses 5 years. Is the 5 years just self declared?
Don't forget to add 80% of his weekly income(pension, state and occupational plus any other income, if any etc). 5 years is the time limit for taking disposal of savings into account and is set out in the regulations.
 
Can I ask, is there anyone who doesn't qualify for Fair Deal?
No, FD is available to all but for some, depending on the financial assessment, they would receive no subsidy as their means are too high.
 
How do the HSE assess savings?
Is it correct to say someone's savings are no longer their own when it comes to the Fair Deal Scheme. If the HSE go back 5 years and in the meantime the person gives a cash gift to someone the HSE treat it as if it was never given and pretend the person still has that money? ?
 
How do the HSE assess savings?
Is it correct to say someone's savings are no longer their own when it comes to the Fair Deal Scheme. If the HSE go back 5 years and in the meantime the person gives a cash gift to someone the HSE treat it as if it was never given and pretend the person still has that money? ?
No, a person's savings are their own but the HSE assess the contribution as if the person still has the money if it's within 5 years. The wording is that they have 'deprived themselves' of assets or income .
 
That is deplorable. Circumstances change and how can someone be assessed on monies given away in good faith.
 
That is deplorable. Circumstances change and how can someone be assessed on monies given away in good faith.

I’m sure there are genuine cases, problem is though, if they did not have this 5 year rule many would deliberately gift any savings above the threshold, or simply get others to mind their savings in their accounts, thereby avoiding the 7.5% that should be assessed on these savings.


End result would be less in the pot, which would mean less people being able to avail of Fair Deal.
 
That is deplorable. Circumstances change and how can someone be assessed on monies given away in good faith.
It's not a straightforward as that. I believe that the provision is intended to prevent applicants transferring cash or assets to avoid assessment under Fair Deal. Genuine disbursements, such as home repairs or maintenance, would be allowable as opposed to 'gifts' or unexplained transfers. The key part of the legislation is that no consideration or consideration less than 75% of the value has been received in return.
 
Thank you. I completely understand that laws are made to prevent cheating but how can it be seen as so when you cannot preempt certain sickness or medical effects.
 
Thank you. I completely understand that laws are made to prevent cheating but how can it be seen as so when you cannot preempt certain sickness or medical effects.
I guess if we could foresee our illnesses and deterioration, we could all plan accordingly and come in under all sorts of criteria, including Fair Deal. Who knows, and who wants to know, what is around the corner and how close?
 
I am confused at this stage. My situation is that my mothers health has detiorated since Jan 2014, and she is suffering from vascular dementia, her short term memory is affected. She went into a nursing home in July 2015 and was assessed and accepted for FDS before entering nursing home care. Subsequently my brother and sister who have power of attorney and are also executors of my mother will decided between them that it would be more "prudent" to pay the nursing home privately. My brother claims tax relief on the nursing home fees and my mother pays the shortfall from her income/ pensions. He maintains that there is no gain to him and that without this arrangement my mother couldn't afford nursing home care. The home she is in is approved for the scheme. I thought the scheme was to cater for just such an eventuality? I am not privy to the details of my mothers affairs other than to say that she is in receipt of a widows pension and a public service pension from my late father. She has some savings and her house is on the market at the moment with an asking price of €235,000. The proceeds of the sale will be placed in an account in my brother and sisters name and in five years time they will then apply for the scheme on her behalf..... My opinion is that she should have been in the FDS from the start and that what they are doing is jeopardising her chances of being accepted at all in future, that Revenue will want to know what happened to her main asset, and that Revenue are just as likely to include the value of the house in their assessment if they think that she has dispossessed herself of assets to avoid tax. Are you saying even if this is so, that as long as their is a five year gap, the house will not be included in her assets. Surely it would make more sense to keep the house and use her savings for any shortfall in nursing home fees, or to pay the loan portion if they were to avail of it back so that the main asset would be free and clear after three years. Sorry for being so long winded, but would appreciate any views. P. S. My brother says he has taken tax advice from his accountant
 
I am confused at this stage. My situation is that my mothers health has detiorated since Jan 2014, and she is suffering from vascular dementia, her short term memory is affected. She went into a nursing home in July 2015 and was assessed and accepted for FDS before entering nursing home care. Subsequently my brother and sister who have power of attorney and are also executors of my mother will decided between them that it would be more "prudent" to pay the nursing home privately. My brother claims tax relief on the nursing home fees and my mother pays the shortfall from her income/ pensions. He maintains that there is no gain to him and that without this arrangement my mother couldn't afford nursing home care. The home she is in is approved for the scheme. I thought the scheme was to cater for just such an eventuality? I am not privy to the details of my mothers affairs other than to say that she is in receipt of a widows pension and a public service pension from my late father. She has some savings and her house is on the market at the moment with an asking price of €235,000. The proceeds of the sale will be placed in an account in my brother and sisters name and in five years time they will then apply for the scheme on her behalf..... My opinion is that she should have been in the FDS from the start and that what they are doing is jeopardising her chances of being accepted at all in future, that Revenue will want to know what happened to her main asset, and that Revenue are just as likely to include the value of the house in their assessment if they think that she has deprived herself of assets to avoid tax. Are you saying even if this is so, that as long as their is a five year gap, the house will not be included in her assets. Surely it would make more sense to keep the house and use her savings for any shortfall in nursing home fees, or to pay the loan portion if they were to avail of it back so that the main asset would be free and clear after three years. Sorry for being so long winded, but would appreciate any views. P. S. My brother says he has taken tax advice from his accountant
Also I thought you had to have a property to avail of the Fair Deal Scheme or is that only relevant if you are availing of FD loan scheme? How do the HSE recoup the balance of fees if the contribution is 80% from the client leaving everybody who is in the scheme with 20% of their weekly income.
 
There are a couple of key points:
1. You don't know the extent of your mother's pension and savings
2. Your brother says he has taken tax advice.

The 5 years for Fair Deal would mean any transfer prior to 5 years of application would not be taken into account. It has been stated here that it would be better to apply for FDS now but not take it up until 5 years later. This is only relevant if the house is NOT sold. If sold, the cash is reckonable indefinitely but if transferred to your siblings, it will not be counted after 5 years.
 
There are a couple of key points:
1. You don't know the extent of your mother's pension and savings
2. Your brother says he has taken tax advice.

The 5 years for Fair Deal would mean any transfer prior to 5 years of application would not be taken into account. It has been stated here that it would be better to apply for FDS now but not take it up until 5 years later. This is only relevant if the house is NOT sold. If sold, the cash is reckonable indefinitely but if transferred to your siblings, it will not be counted after 5 years.
 
So my brother is correct if they sell the house and transfer the proceeds and don't apply for five years No tax will be payable on the value of the house.
In fact they can transfer her savings too and they won't pay any tax on that either.
So my mother having been deprived of all her assets and they are moderate, I would say within the limits of the thresold, she will then be accepted for the scheme? Surely everybody could do that.
Does she have to have a house or property or land to qualify?
Are there any other pitfalls to consider?
Thanks for your prompt reply
 
Hi. It's not tax but a contribution assessed at 7.5% of any cash or property subject to an exemption for first €36k of savings. Hse looks back a maximum of 5 years for the assessment. During that 5 years, your mum will have paid the best part of €250k towards her nursing home care. You, or your brother, need to run the numbers of paying direct or using Fair Deal. Yes, you are correct. We could all do that, given the resources and foresight!
 
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