Fair Deal/Nursing Homes Fair Deal - Home Renovations?

J

jifitz

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Hi folks,

Great info on this site RE fair deal, but not found the answer to a specific question we have.

Father in law has recently gone into a nursing home under fair deal. Son lives in the father in law's PPR (for his whole life) and is paying the balance of the 7.5% fair deal contribution. They did not avail of the nursing home loan. Can the son renovate and improve the PPR, or would this require a financial reassessment and potentially increase the financial contribution?

If so, would this still be the case after 3 years once the PPR is no longer part of the financial assessment?

Any advice appreciated.
 
If they are not using the Loan element, and the property is not sold; the PPR doesn't come into it.
 
Thanks for replying thirsty - would doing renovations on the property increase the value and then be considered a "change in circumstances", thus triggering a financial reassessment?
 
Again, the person's PPR is not assessed unless it is used as security for the Loan element of the Fair Deal scheme; or if its rented out then the rental imcome comes into play.

I was unclear in the above para.
HSE only concerned if house is sold or rented out while nursing home resident is living. If there's no loan then there's no security.

I'm not sure of the wisdom of spending so much money on a property you don't own; but that's another question.
 
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jifitz said:
would doing renovations on the property increase the value and then be considered a "change in circumstances", thus triggering a financial reassessment?
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Even if you are not availing of the loan a valuation would have been submitted with your Fair Deal application. Your dad would have been assessed at 7.5% of this value for the first 3 years.

If your dad’s house was to become substantially more valuable as a result of renovations and improvements then in my opinion it would be a notifiable change in circumstances that you would be obliged to declare and it would trigger a financial reassessment.

The HSE will have no way of knowing the house has increased in value until your dad passes away. Even though he did not avail of the loan his representatives are obliged to submit a schedule of assetts. While the HSE will allow for house price increases, with the renovations and improvements your dad's house could be outside the acceptable margins. If this is the case the HSE will look to be paid. So even after 3 years it could be an issue.
 
The 7.5% is assessed on the written valuation of the home at the time of application. The family have opted to pay the 7.5% rather than avail of the loan.

Nothing I have read or researched suggests that the HSE will request a new valuation of the PPR after death *for the purposes of re-evaluating the 7.5% contribution*.

I've sumitted requests on behalf of relatives to the HSE for review of personal contribution & was not asked to revalue the PPR.

I'd be interested in hearing from anyone who has recently settled an estate & repaid a fair deal loan & what their experience was.

Having said that, if there is an attempt to de-fraud, by submitting a false valuation in the first place then all bets are off.

I still wonder why you would put money (other than maintenance) into a house you don't own.
 
For one thing, he might be getting the house as an inheritance, or whatever. If he's living there it might need some maintenance and doing up. I don't see an issue with it at all. Every dog in the street knows there's thousands of families using Fair Deal under false pretences but that's a different thing entirely to this, and doing a bit of work on the house as he's living there in understandable in this case.
 
There's no inheritance until the nursing home resident dies; and many a surprise has come along after a death.

If I were the OP, aside from it being somewhat distasteful, I wouldn't be counting my chickens!
 
Thirsty said:
There's no inheritance until the nursing home resident dies; and many a surprise has come along after a death.

If I were the OP, aside from it being somewhat distasteful, I wouldn't be counting my chickens!
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Oh dear, give it a rest like a good man. He asked a specific question and a simple question about Fair Deal, not one on morals or conjecture.
 
Thirsty said:
The 7.5% is assessed on the written valuation of the home at the time of application. The family have opted to pay the 7.5% rather than avail of the loan.

Nothing I have read or researched suggests that the HSE will request a new valuation of the PPR after death *for the purposes of re-evaluating the 7.5% contribution*.

I've sumitted requests on behalf of relatives to the HSE for review of personal contribution & was not asked to revalue the PPR.

I'd be interested in hearing from anyone who has recently settled an estate & repaid a fair deal loan & what their experience was.

Having said that, if there is an attempt to de-fraud, by submitting a false valuation in the first place then all bets are off.
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You can ask to be reassessed annually whether you pay the 7.5% or avail of the loan, they will not look for a revaluation of the house.

When a person in care dies their representatives are obliged to give the HSE a schedule of assets, if probate is being applied for it is usually the CA24 (I think it is a different form since last year) This schedule lists all assets and includes a current house valuation.

It seems many people forget about some bank accounts and other assets when applying for Fair Deal, but all comes out in probate. This link is a few years old but makes the point.

https://www.independent.ie/business...-of-people-under-declare-assets-35404772.html

My experience with concluding Fair Deal has been very positive.

In one case the house on death was valued 40% above what it was valued 6 years previously, this was not questioned as the original valuation was reasonable at the time.

In another, a bank account was on the CA24 that was not mentioned on the Fair Deal application, it was only discovered after the person died. The HSE questioned this and 7.5% of this account had then to be paid for each year.
 
Thanks all for your input. Yes the house will be inherited by my brother-in-law. He's lived there his whole life and keen to move on with his life. He's done some small improvements to keep it habitable and reasonably comfortable, but is thinking of doing something more substantial, like a structural extension. From what i'm reading that there is an element of risk, especially if the improvements substantially increase the value of the house, given the HSE will need to see the new valuation?
 
Other than maintenance, I would hold off doing any other work.

He doesn't own the property; even if he believes he will inherit in the future, it's premature at best to be considering major renovations.
 
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