Fair Deal Scheme question

O

On a Plain

Registered User
Messages
43
My aunt is applying for the fair deal scheme to go into full time care. She has a pension and no other income. She lives in a house as a life tenant, so she doesnt own the house, but has use of it for her lifetime. She wants to know how would that be assessed for the fair deal scheme?
 
The answer depends on how the 'life tenancy' arose, was it via a will or did she transfer her own house to another witha right to remain until her death. a right of Residency is not taken into account in Fair Deal financial assessment but 'Life Interest' is. There is a table with values and ages etc. Can you tell us more about the origin of the tenancy, her age and the value of the house?
 
Slim said:
The answer depends on how the 'life tenancy' arose, was it via a will or did she transfer her own house to another witha right to remain until her death. a right of Residency is not taken into account in Fair Deal financial assessment but 'Life Interest' is. There is a table with values and ages etc. Can you tell us more about the origin of the tenancy, her age and the value of the house?
Click to expand...

Hello. Yes certainly. She was given a life tenancy via a will, or more exactly a "right to use" which i assume is the same thing.
She is 82 years old and the house would be valued at about 450,000
 
A copy of the will will have to be submitted to the HSE along with the application. If the HSE assesses the right as anything other than a 'right of residence' it can be assessed as follows: €450,000 x .2538 = €114,210 in year 1. This would be the capital value of the 'right' and would then be assessed at 7.5% per annum. There is a table for getting the multiplier which is based on age.
 
Slim said:
A copy of the will will have to be submitted to the HSE along with the application. If the HSE assesses the right as anything other than a 'right of residence' it can be assessed as follows: €450,000 x .2538 = €114,210 in year 1. This would be the capital value of the 'right' and would then be assessed at 7.5% per annum. There is a table for getting the multiplier which is based on age.
Click to expand...

Ok thanks for that. I think she would fall into the right of residence but the HSE can decide based on the will
Can I ask exactly what you mean "anything other than a right of residence"? I am just confused about the difference between a right to reside and a 'life interest'
 
Yes, it's very confusing. Anything that is other than a 'right to reside' and specified in the will as such, may well be regarded as 'life interest' which is reckonable. Many people made their wills pre Fair Deal and did not distinguish between the two but are now caught out. The life interest suggests that, if the property were sold before the applicant's death, they would benefit from the sale, but I'm not certain. That is why 'right to reside' is so important as it imparts no property right.
 
Thats interesting. I believe this will was made before the Fair Deal Scheme came about. The words used to describe the trust are "right to use". There is no time period specified and no use of the word 'Life' or the word 'interest'
But I think 'right to reside' and 'right to use' are fairly close in definition
 
Slim said:
Yes, it's very confusing. Anything that is other than a 'right to reside' and specified in the will as such, may well be regarded as 'life interest' which is reckonable. Many people made their wills pre Fair Deal and did not distinguish between the two but are now caught out. The life interest suggests that, if the property were sold before the applicant's death, they would benefit from the sale, but I'm not certain. That is why 'right to reside' is so important as it imparts no property right.
Click to expand...

I can understand why they distinguish these as a Life Tenant basically has full ownership over a property during their lifetime. Theoretically they can rent it out, or even sell it although they would be unlikely to find a buyer as ownership would not last beyond the lifetime of the tenant. The point is they can benefit financially from the property. Someone with a right to reside simply has a right to live in a property and could not gain financially.
In the OP Aunt case this is interesting. I could see the words 'right to use' either way really !
 
You must log in or register to reply here.
Back
Top