Health Insurance Fair deal scheme/Nursing home Loan

[trojan]

Unfortunately I don't know how to reference another site but in the Money Guide Ireland they give an example of a married couple with house valued 400,000 jointly owned with wife needing nursing home care and the contribution appears to be 236.53 weekly. Is it possible to apply for the Fair deal scheme by making this payment and avoiding the Nursing Home and the resultant mortgage on the house.



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Moderator Note - example of calculation taken from Money Guide Ireland - see here:


Example of Calculation

A married couple living in a house which they jointly own.
The wife needs full-time nursing home care. They have a combined income of €500 per week. Their house is valued at €400,000. Under the scheme, the wife will only have to pay €200 a week towards her cost of care. This is because half of the couple’s income is €250 and 80% of this is €200. The HSE will pay the balance of the nursing home costs.
A deferred contribution of €236.53 per week, for a maximum of three years, is also payable from the estate after the death of both of the couple. This is calculated as follows:
Value of house: €400,000
Less the Asset disregard for couple: € 72,000
Remaining Value: €328,000
50% of remaining value : €164,000 (because it is jointly owned)
7.5% of 164,000 per annum: € 12,300
Divide by 52 to get weekly amount: € 236.53

If the wife is still in a nursing home after three years, the principal residence would no longer be used in the financial assessment. (Total deferred payment capped at €12,300 in this example).

 

[Black Sheep]

Not quite sure what your question is.

There are 2 parts to the Fair Deal. It is based on the:-
(1) Care assessment need
(2) Financial assessment.

Assuming that the care needs have been established as (High dependency)requiring nursing home care they will then move on to the financial assessment. This will show the amount the HSE will pay towards the patients care based on the value of the home and any savings.

 

[trojan]

My query is can one avail of the Fair deal but avoid the Nursing Loan which creates a Mortgage on your home by paying 236 euro weekly as outlined in the example given. Sorry for any confusion

 

[cremeegg]

can one avail of the Fair deal but avoid the Nursing Loan which creates a Mortgage on your home

Yes.

The loan is a separate thing from the fair deal, and must be applied for separately. There is absolutely no requirement to avail of the loan, if you do not wish to do so. If you can afford to cashflow the ongoing payments, there is a considerable tax advantage to a taxpayer in not taking the loan. The weekly amount to be paid depends on an individual assessment in each case. The €236 referred to is just an example.

 

[trojan]

Thanks. What confuses me is that in the Money Guide example there is reference to a deferred payment whereas i thought a person would make the weekly payments ongoing in cash

 

[twofor1]

In the example given above the wife’s assessed weekly contribution is €436.53, this is not clearly stated, possibly causing confusion.

€236.53 is the amount assessed on the family home and is deferred as in this case they are availing of the nursing home loan. The fact that the nursing home loan is being availed of is not clearly stated, possibly causing confusion.

Wife does pay €200 weekly and the additional €236.53 capped at 3 years is deferred.

As already pointed out the nursing home loan is optional, if one has the funds to pay the amount assessed on the family home and wish to do so, fine.

 

[trojan]

Thanks for that. If one wanted to avoid the Nursing Loan scheme how much approx is required to be paid in cash to achieve this. Sorry for prolonging this issue

 

[Marsha25]

That will depend on a few factors -
How much weekly fee for the particular nursing home is
What clients house is worth
What savings/shares etc client has
What pension/other income client has

Our example:
House value €90k
Shares/cash in bank around €28k
State non-contributory pension €232 per week
Nursing home fee €800 per week

Parent paid €310 per week towards his fee, plus €35 extra for access to physio/daily newspaper, so most was covered by his pension. The shortfall came from his cash savings.

 

[twofor1]

If one wanted to avoid the Nursing Loan scheme how much approx is required to be paid in cash to achieve this. Sorry for prolonging this issue

Hi trojan,

There is no simple answer to your question as everyone’s circumstances and finances are different.

Putting your figures into the calculator on this very informative site might answer your question.

http://myfairdeal.ie/