Fair Deal/Nursing Homes Fair deal scheme with nursing home loan , House price may now have increased.

M

mondo101

Registered User
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Hiya,

We signed up for Fair deal scheme with nursing home loan for a relative.

He passed away 1.5 years into their Nursing home stay. We had his house valued at the time of the loan at 370,000, and in order to sign up for the nursing home loan.

We are also aware that the nursing home need to be notified when the house is sold.

We have just received a letter from HSE requiring a schedule of assets.

My question is, if we sell the house for more than what it was valued at , at time of loan, ( a likely scenario since houses prices have risen since he passed away 6 months ago )

Will we owe the HSE even more money now based on the actual selling price ? Eg: €450,000 , or is the value at time of loan set in stone ?

I read somewhere that calculations are based on the value of the house at time of death , the house value would therefore be more than 370,000 (the Value 1.5 years ago ) but less than the actual selling price.

Please help.

I
 
Surely the estate just pays the amount that was actually loaned/advanced - i.e. the cumulative amount that was paid under the loan scheme to the nursing home? And not some percentage of the house selling price?
 
ClubMan said:
Surely the estate just pays the amount that was actually loaned/advanced - i.e. the cumulative amount that was paid under the loan scheme to the nursing home? And not some percentage of the house selling price?
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Correct - although the closing figure has what the HSE describe as "CPI interest" added to it.

My impression, as someone going through the repayment process at the moment, is that the HSE looks for a schedule of the applicant's assets after their death to check whether any assets were omitted when the loan was first applied for - but that's just my impression.
 
ClubMan said:
Surely the estate just pays the amount that was actually loaned/advanced - i.e. the cumulative amount that was paid under the loan scheme to the nursing home? And not some percentage of the house selling price?
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The maximum amount which can be recouped is 7.5% of the value of the house per year for a maximum of 3 years even if the amount paid by the fair deal scheme exceeds that amount so the value of the house is relevant
 
huskerdu said:
value of the house per year
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Its the value of the house at the time the loan is taken up; which valuation is documented and submitted at the time of application.

Having said that you can expect some investigation if you submit a value of €100k and the house sells two years later for €400k.
 
mondo101 said:
I read somewhere that calculations are based on the value of the house at time of death .........
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I asked the HSE about house values increasing over time. I was told that as long as the original valuation was reasonably accurate and the higher value at time of death is in line with house price inflation, then what is owed is calculated on the original valuation.

One of my family lived for nearly 9 years in a nursing home under Fair Deal, their house’s value had almost doubled in that time, what was owed was still assessed on the original valuation.

From €370k to €450k in 1.5 years is nearly a 22% increase, seems a lot but if the original valuation was reasonable and given the current property price boom it might not be an issue.

All you can do is submit the schedule of assets, usually the probate form and see what happens.
 
Hiya and thx for the reply …
It’s also interesting to think that if the house prices had crashed and the house was now only worth 270,000 ,then I think we all know that the HSE would still be looking for the original valuation of 370,000….so they can’t have it one way if higher but the other way of lower to suit themselves !
 
It is on the original estimate (upon entry into nursing home) not the new (increased value). I've been through this process myself and had the same question and couldn't get a straight answer from the HSE. I went through probate and the HSE looked at the original valuation as that is what the loan is taken out against. That said they also came back and take whatever else they can take - a portion of any other assets - savings, second property, land etc too...
 

Surely that wouldn't have happened if those other assets had been disclosed originally and taken into the HSE's initial calculations?
 
Shirazman said:
Surely that wouldn't have happened if those other assets had been disclosed originally and taken into the HSE's initial calculations?
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Some assets might only come to light after the person passes away, which is also why, after death the HSE send you a letter requesting a "schedule of assets", to catch anything that may have been omitted (not intentionally) however, this schedule of assets is what prompted my question regarding the value of the house.
 

Isn't the number of people who "accidentally" omit to declare some of their assets for a Fair Deal really amazing? (it's even more ironic when one thinks of the meaning of the word "Fair" in Fair Deal!)

I'm fighting with the HSE at the moment because they appear to want me to go through the probate process for a relative who passed away with total assets of only €125 in a post office (the only other asset - the family home - was in both names). Frustrating.
 
I don't think its quite as amazing as you think.

I've been through this process for older relatives and their paperwork can be in a right state.
 
Thirsty said:
I don't think its quite as amazing as you think.

I've been through this process for older relatives and their paperwork can be in a right state.
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So roughly how often have you found them claiming to have assets that they don't actually have?
 
a. Claiming assets they don't have
Wills that say "I leave the pink widget with yellow spots to Joe"; when the pink widget was sold 20 years ago.
Handing over post office books that are donkey's years old for accounts long since closed.
"Be sure and tell Johnny he can have Maise's foal"
etc., etc.,

b. Forgetting about assets they do have
Credit Union accounts
Bank accounts
life policies
unclaimed pensions.
 
It's not that simple so you shouldn't be so quick to make assumptions! My mum would have completed all of the Fair Deal paperwork for my dad when she was bedridden and herself end of life so it's not as simple as "accidentally" omitting details.
 

Happily, I appear to inhabit a completely different world than you! In my world, it's far more common to encounter sweet old couples asking for advice on making assets disappear so that they can avail of various means tests. It makes one very cynical of the 'accidental' amnesiacs.
 
Could I ask a supplementary question to this? Is the nursing home loan charged aswell as the 7.5per cent per year? We are in a situation where the home fees are slightly less than our calculated applicants weekly contribution but we can only make the contribution by availing of the home loan. It means the FD part isn't giving us anything
 
Tomban said:
We are in a situation where the home fees are slightly less than our calculated applicants weekly contribution but we can only make the contribution by availing of the home loan. It means the FD part isn't giving us anything
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In your case, Fair Deal might not be paying any of the cost now, but they are giving you the loan for the amount assessed on the house. If you were not in the scheme, you would have to pay the full amount monthly with no loan facility.

Another major benefit of Fair Deal; in 3 years time the house will be disregarded, the scheme will then pay the amount assessed on the house indefinitely.

Up until last year with Fair Deal, if you sold the family home the proceeds would be assessed indefinitely, this is no longer the case. If it suited your circumstances, you can now sell the house and the sale proceeds will only be assessed for 3 years. Would this option be any benefit in your case ?
 
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