Participants in the Fair Deal Scheme should be obliged to rent out their houses

[twofor1]

There should be an imputed rent. And if you don't collect it, then you pay for the nursing home yourselves.

In your particular case, it may make sense to sell the house.

This is a big part of the problem, it rarely makes sense to sell the house, so they remain empty.

The house is assessed at 7.5% annually for 3 years only, so the maximum that can be taken is 22.5%, even if the person in care lives for 10 years or more. By keeping the house, at some stage the beneficiaries are going to get at least 77.5% of the house value.

If the house was sold at the time of entering nursing home care, one would be assessed on the proceeds indefinitely. The longer the person in care lived the less there would be in the pot.

Perhaps an incentive to sell when the person enters nursing home care rather than when they die which can be many years later would surely see many empty homes on the market. And / or would a substantial vacant property tax do the trick ?

When Fair Deal started it was 5% of property value capped at 15% and 5% of other assets.

By 2013 there were more people availing of Fair Deal and they were living longer so contributions were increased to 7.5% of property value capped at 22.5% and 7.5% of other assets.

Increasing the 7.5% again and extending the 3 year cap to 4 years would mean a lot more are paying themselves and at the same time leaving something for their beneficiaries.

I think these would be better solutions than the imputed rent solution which throws up numerous complications.

 

[Gervan]

I really can't see how this could work. If we had to offer our house for rent just now, no-one would want it! It's full of personal possessions, old equipment, things that don't work very well, beds with old mattresses, carpets that need cleaning.
Is the proposal that the families now have to bring these vacant properties up to the standard that will be acceptable? Who is to pay for that, and what happens to a lifetime if books and belongings?

 

[Threadser]

I really can't see how this could work. If we had to offer our house for rent just now, no-one would want it! It's full of personal possessions, old equipment, things that don't work very well, beds with old mattresses, carpets that need cleaning.
Is the proposal that the families now have to bring these vacant properties up to the standard that will be acceptable? Who is to pay for that, and what happens to a lifetime if books and belongings?

Very good point. Most houses vacated by elderly people are not in a suitable condition for renting. Also a parent moving to nursing home care is a hughly traumatic time. Expecting people to rush ahead and clear the family home of all personal belongings ignores the reality of the hugh emotional upheaval surrounding this whole process.

 

[Leper]

This whole subject stinks from where I sit. You are an old person and worked and paid taxes all your life. Suddenly, you are too infirm to stay at home and you must be hospitalised. Hospitals/Nursing Homes are such; they are not holiday homes. Currently, we punish people who have saved for old age and we award many who squandered every asset they have. The freeloaders get away scott free as usual.

Some form of fair play is required for everybody not marginalisation. Of course, we will never get this because of the "We get everything free" culture that our politicians have supported since the foundation of the state remains.

Just look at our Childrens' Allowance system. Everybody gets it. Whether you are Leper or Michael O'Leary you are entitled. The 3rd Level Grants system is probably the most abused of all. Some of us pay through the roof to send somebody to university, many others screw the system and it costs them nothing.

So now, we want to force our elderly to rent out their houses to pay for Nursing Homes/Hospitals. It's a loser from the start. Again it would only be the honest people who would be "caught."If this idea was inflicted on say the immigrant community there would be uproar. Somebody earlier said the unions were part of the cause of our elderly needing care. Sounds like that Austrian former corporal with the small moustache blaming the Jews for everything. Trade Unions don't represent the non paying elderly and never did.

The subject is becoming a little hurtful as its likes could plant a seed that will grow into a spreading ugly tree.

 

[Brendan Burgess]

I agree that we have a freeloader culture which should be tackled.

I agree with others who have said we should tackle ghost estates.

But we need to tackle all of the problems.

And it's a huge problem to have homes lying vacant while people are in nursing homes.

My priority here is to give people an incentive to rent out their houses or to discourage them from leaving them idle.

Of course, there will be practical problems. It's a stressful time - fine, make no deduction for the first three months to allow the family to deal with one issue at a time.

They don't want to be a landlord - fine. Sell the house or pay the costs themselves.

We have to make the housing crisis a priority and we must stop encouraging people to leave homes empty. That housing crisis is at all levels and not just the lack of social housing.

Brendan

 

[Marsha25]

I don't think it's that simple. A persons home is, in their mind, always going to be that. Many elderly may harbour a secret thought that they may someday go home and therefore not dwell on the fact that they are effectively heading to the departure lounge! Supposing there is no son/daughter, or they live away. Who is supposed to take charge of renting out the house, dealing with tenants, maintenance if a washing machine breaks etc? The home owner won't be in a position to do it. I don't think anyone should be effectively pressured to rent out their house. Going into a nursing home can be a traumatic stage in an elderely persons life. For them to be pressured to give up that home, have to clear out all their belongings and have strangers move in is not going to be an easy task.
And I agree with Leper, that generation have fulfilled their tax obligations over their years of working and should not be made feel that you or I are effectively paying for their care. There are other sectors of community where I wholeheartedly begrudge funding via my tax contribution, but the elderly having to go into a nursing home is not one.

 

[Brendan Burgess]

Hi Marsha

There are two issues here

The primary one is the shortage of housing. I really think that we need to address this whatever way we can. We should not incentivise people to leave their homes vacant.

The second one is the the fairness of it. Like you I resent paying high taxes to pay some of the highest social welfare rates in europe and I resent that more than paying for elderly people's nursing home care. But I have to say, there is no reason why you should have to pay for my care if I have a valuable house which could be sold to fund it.

Brendan

 

[Marsha25]

We had the situation where my elderly parent went into a nursing home. As his savings dwindled we had to look at the situation. He agreed to sell after a few months of being in the home. There was no choice and we had to take into account the fact that the sale proceeds would then be assessed as savings for the second 3 year term. It was a very stressful and emotional time, having to clear out all our parents possessions quite quickly and him knowing that his home was gone. I do wonder how people manage without selling up as even with the fair deal contribution, money has to be paid weekly and if a person has an expensive house they are paying a good bit more than my father. I'd say the stress of it all contributed to his demise. I wouldn't wish the situation on anyone. It does become necessary for some to sell up or rent in order to pay for their portion of fees, but I still don't think it should be a condition of availing of the fair deal.

 

[Brendan Burgess]

In virtually all these cases, the owner of the house is never going to return to them. It's immoral to leave the house empty when there is a shortage of houses. It's immoral to have a system which encourages them to leave it empty.

As I said earlier, it's like paying farmers not to farm their land when people are starving.

Brendan

 

[twofor1]

One of my elderly relations built their own house at night and weekends, he and his wife then reared their family in their family home.

She passed away, he is now in a nursing home under Fair Deal. He will never live at home again, but it is still his home and he is brought there for a cup of tea once or twice a week and he will watch the match there on Sunday afternoon.

If his home was rented he could never go home again.

If that's immoral so be it.

Expecting the elderly to rent the family home is not the solution, there are other options.

 

[Clamball]

I think it is right that vacant homes become part of the housing stock for the good of the country. But there are many considerations before fair deal recipients should be compelled to rent their home as part of the fair deal scheme.

I know my in-laws found it all very tramuatic with my MIL becoming ill before Christmas, the acute hospital trying to discharge her, when she could no longer walk and her mental state deteoriating rapidly. Getting so much conflicting information on the fair deal, needing to organise valuations, agree a nursing home, explain any delays to the acute hospital, solicitors, banks, all the bills for the house etc. The fair deal seemed to be pretty confrontional as far as I could see as they were ensuring all bank accounts and assets were declared as the MIL had left very confused records. Adding to all that stress the requirement to get the house into a rentable state, remove and deal with personal belongings, etc just seems to add another layer of stress. I am sure my inlaws would be very happy to use the rental income to maintain the house, pay towards the fair deal etc. But as some one else said reluctant landlords have a lot to deal with, if you need to pay house insurance where does the money come from? 80% of income goes to nursing home, 20% belongs to the home owner and many of them are in no position to approve payments.

If the government steps in to help and set up a one stop shop what's the betting it becomes so beruacatic that the elderly person waits even longer in an acute bed before the transfer to a nursing home and the health system suffers.

 

[odyssey06]

I think also in 'weighing the balance sheet', you forget the taxes that these people would have paid all their life... on the understanding that they paid it when they had it and the state would be there for them when they needed it.
If we're to move away from that model then we would also need to look at all other aspects of the taxes and state supports model.

At the moment the state is getting something back from the value of these assets... I think there's a very real chance if the state tries to grab too much \ makes the conditions too onerous they will find there's nothing there to grab. Why leave a nest egg if the state will confiscate it... spend it all, live the high life and end up with nothing in reserve at 65 - and the state will give you the same support.
Then you are into moral hazard territory...

 

[Monbretia]

Should people be compelled to rent out spare bedrooms in their house? Anyone living in a house on their own with more than one bedroom Might be a lot easier than getting perhaps an old house ready for renting. It wouldn't help with nursing home costs but would help the housing situation.

I know there is no way my father's house would rent in it's present state, nothing really wrong with it if you are of his era but I wouldn't rate the chances of younger people renting it, no dishwasher/dryer and no room for them either.

Actually there is a council house near his that has been fully renovated and has been turned down by several people, it's old style very small by today's standards with a kitchen no bigger than most utility rooms, people just won't go for that anymore. Might be different if all these properties were in Dublin but they are not.

 

[Gordon Gekko]

My own view is that there should be incentives to give up larger/vacant homes rather than penalties for having them.

The sanctity of the family home must be preserved; it is up to Government to solve the housing crisis through the delivery of new units, not by way of a land grab and demonisation of people who have paid their way all their lives.

 

[Brendan Burgess]

Should people be compelled to rent out spare bedrooms in their house? Anyone living in a house on their own with more than one bedroom M

Probably not. But if they are on social welfare or if they are getting rent allowance, they absolutely should be.

If I want to pay to live on my own in a three bed house that is fine. But I should not be getting paid by the state to do so.

Brendan

 

[Brendan Burgess]

he sanctity of the family home must be preserved;

That is exactly what we need to demolish.

Some religious notion that you should pay taxes to keep my father in a nursing home so that he can keep his house empty and leave it to me free of taxes when he dies.

There should not be anything sacred about the family home during a housing crisis.

Brendan

 

[Early Riser]

In virtually all these cases, the owner of the house is never going to return to them. It's immoral to leave the house empty when there is a shortage of houses. It's immoral to have a system which encourages them to leave it empty.

Presumably you are basing this on some general moral principle, rather than just that you have strong views about this matter. It would be helpful if you could state the general principle and then we might see how solidly grounded it is and how this could be applied to other situations.

Its just that I tend to get suspicious when someone starts justifying there position on the basis of "morality". It often sounds like they are saying that "my morality is superior to your morality and that's why I can see that this position is correct and you cannot." It is also simply a variation of every argument of the more extreme left for penal taxation of everything - "its immoral that some people have lots when others have so little". (Ironic given your comments on Welfare).

I know that this is not what you are saying but you seem to be basing your position here on a similar exposition of "morality". By the way, I do think the Fair Deal scheme needs to be reformed as otherwise it will be unsustainable and/or it will be confined to only a minority who need it. But I would prefer to keep vague morality out of it.

 

[Marsha25]

"Ireland provides a reasonable safety net to most people. It's not perfect, but it's broad and accessible. The basis of the social safety net is give and take. Yes, older people have paid taxes, and many are financially vulnerable. But there are also many who are relatively wealthy (or at least asset rich) and surely should not be benefiting from the common fund, which then leaves less for those in genuine need. We have progressive income tax which recognises that those of us who have more are in a position to pay more - it's not unreasonable for that to extend to the fair deal scheme.[/QUOTE]

Is it not already part of the Fair Deal though - those who have anything over €36k have to pay 7.5% of the excess per year along with 80% of their income. So while one persons assets are worth 80k and they have a small pension, another person could have a house worth 500k with a substantial pension, and another person no house at all and living on state non contributory pension. Each person pays a different amount based on their means.

 

[jjm]

Presumably you are basing this on some general moral principle, rather than just that you have strong views about this matter. It would be helpful if you could state the general principle and then we might see how solidly grounded it is and how this could be applied to other situations.

Its just that I tend to get suspicious when someone starts justifying there position on the basis of "morality". It often sounds like they are saying that "my morality is superior to your morality and that's why I can see that this position is correct and you cannot." It is also simply a variation of every argument of the more extreme left for penal taxation of everything - "its immoral that some people have lots when others have so little". (Ironic given your comments on Welfare).

I know that this is not what you are saying but you seem to be basing your position here on a similar exposition of "morality". By the way, I do think the Fair Deal scheme needs to be reformed as otherwise it will be unsustainable and/or it will be confined to only a minority who need it. But I would prefer to keep vague morality out of it.

How many houses are we talking about any figures please .I suspect when you take out all the people who finish up in a Nursing home where there partner still lives at home along with the people who spend less than a year in a nursing home before the die we are talking about very few houses

These houses will be coming on to the market when the die anyway,

 

[arbitron]

Is it not already part of the Fair Deal though - those who have anything over €36k have to pay 7.5% of the excess per year along with 80% of their income. So while one persons assets are worth 80k and they have a small pension, another person could have a house worth 500k with a substantial pension, and another person no house at all and living on state non contributory pension. Each person pays a different amount based on their means.

No, people are penalised for holding assets as cash rather than as their family home. There is a 3-year cap to a maximum of 22.5% charge on the family home. This does not apply to cash or other assets.

Your contribution to care

Having looked at your income and assets, the Financial Assessment will work out your contribution to care. You will contribute:

• 80% of your income (less deductions below) and
• 7.5% of the value of any assets per annum (5% if the application was made before 25 July 2013)

However, the first €36,000 of your assets, or €72,000 for a couple, will not be counted at all in the Financial Assessment.

Where your assets include land and property, the 7.5% contribution based on such assets may be deferred and paid to Revenue after your death. This is known as the Nursing Home Loan. You can read more about the repayment of the Nursing Home Loan in the FAQs on the Nursing Homes Support Scheme (pdf).

Your principal residence will only be included in the financial assessment for the first 3 years of your time in care. This is known as the 22.5% or ‘three-year cap' (the cap is 15% for applications made before 25 July 2013). It means that you will pay a 7.5% contribution based on your principal residence for a maximum of 3 years regardless of the length of time you spend in nursing home care.

In the case of a couple, the contribution based on the principal residence will be capped at 11.25% (7.5% for applications before 25 July 2013) where one partner remains in the home while the other enters long-term nursing home care, that is, the ‘three-year cap’ applies. If you opt for the Nursing Home Loan in respect of your principal residence, your spouse or partner can also apply to have the repayment of the Loan deferred for their lifetime

If you have already been in a nursing home for 3 years when you apply for the scheme, then you do not pay the 7.5% on your principal residence.

After 3 years, even if you are still getting long-term nursing home care, you will not pay any further contribution based on the principal residence. This ‘three-year cap’ applies regardless of whether you choose to opt for the Nursing Home Loan or not.

All other assets will be taken into account for as long as you are in care.