Key Post Funding Nursing Home Care: Fair Deal – The Basics

[twofor1]

Many questions have come up on AAM about funding nursing home care. From my lay person’s experience, here’s some basic information which I hope will be of help. It does not cover every aspect of Fair Deal just the basics as a starting point.

If I have omitted something that should be included, please let me know.

The Nursing Home Support Scheme, “Fair Deal” is a HSE administered scheme of financial support for people who need long term nursing home care. Under Fair Deal, people contribute towards the cost of their care and the State pays the balance.

Fair Deal is available to all who have been assessed as needing long term nursing home care, subject to availability of funding.

The amount payable is calculated by looking at the applicant’s income and assets to work out their contribution to care. The contribution will be 80% of annual income and 7.5% of the value of assets per annum.

The applicant’s principal residence will only be included in the financial assessment for the first 3 years of their time in care; all other assets will be taken into account for as long as they remain in care.

The contribution based on the principal residence can be deferred and collected from the applicant’s estate; this element of the scheme is optional and is known as "Ancillary State Support" or ‘’The Nursing Home Loan’’.

In the case of a couple, where one person needs nursing home care, the financial assessment is based on half their combined income and assets.

With nursing home costs typically €900 - €1,200 weekly, Fair Deal is usually very beneficial to most.

If considering long term nursing home care, the public health nurse in the applicant’s local HSE health centre is usually a good starting point for advice, or if the person is in hospital, it’s the hospital social worker who will advise.

Application forms and contact details for all Nursing Home Support Offices and a step by step guide to Fair Deal can be found here;

http://www.hse.ie/eng/services/list/4/olderpeople/nhss/


The Department of Health have a very informative Frequently Asked Questions on Fair Deal, which include examples of financial assessments on pages 16 – 18.

http://health.gov.ie/wp-content/uploads/2014/04/Frequently-Asked-Questions.pdf

A Calculator thast enables you to carry out a simulated Financial Assessment yourself before completing the official Application Form is here; http://myfairdeal.ie/?page_id=64

Some points to note;

· Any asset disposed of in the past 5 years will be included in the financial assessment.

· The first €36,000, or €72,000 for a couple will be disregarded in the financial assessment.

· Fair Deal includes provisions for what to do if the person who needs care does not have capacity to make decisions / process the application by themselves.

· There is no financial benefit in choosing a cheaper nursing home; the assessed contribution is based on the applicant’s income and assets and not the cost of the nursing home.

· The Nursing Homes Support Office should be able to help in filling in the application form or answer questions about an application. In my experience, they only take calls in the mornings but were always very helpful.

· It can be very beneficial to get the applicant’s financial contribution reassessed by the Nursing Homes Support Office on an annual basis, particularly if using savings to pay the assessed amount on the principal residence. This is because the balance of savings is probably reducing significantly. (A reassessment is generally by request only.)

· Some nursing homes charge an additional flat fee for activities etc., these are not covered under Fair Deal at present.

· Nursing Homes Ireland have produced a guide to assist in choosing a nursing home;

http://www.nhi.ie/index.php?p=NHI_guide

· Most nursing homes, though not all are approved for the scheme. Here is the approved list of nursing homes, both public and private;

http://www.hse.ie/eng/services/list/4/olderpeople/nhss/costs.html

· It’s a good idea to have a name down in at least 3 of your chosen nursing homes as most do have waiting lists. Those who want a single room might have to take a sharing room initially until a single becomes available.

· Tax relief is available at the higher rate for nursing home costs (or for carers in the family home), details here;

http://www.citizensinformation.ie/e...ng_home_fees_and_for_dependent_relatives.html

 

[twofor1]

Fair Deal FAQ's:

I live in rented accommodation so don’t own a home or any other assets. Can I avail of Fair Deal ?

Fair Deal is available to all regardless of what income or assets they have, in your case you will be assessed on your income only.

My Mam, a widow, lives alone and now needs long term nursing home care. Can we rent out her house ?

Yes you can, but net rent after costs will be assessed as income (80%), as such it might be a lot of hassle for little financial gain. Do the sums for your own particular circumstances.

My Mam, a widow, is now in a nursing home under Fair Deal. The family home is unoccupied, can it be sold ?

Yes it can be sold, but the proceeds of the sale will be assessed as cash assets indefinately, whereas if it remains as the family home it will be disregarded from the financial assessment after 3 years.

My Dad is in a nursing home under Fair Deal and availed of the nursing home loan. My Mam lives in the family home. If my Dad dies will the family home have to be sold ?

No your Mam can continue to live in the family home, but she must apply within 3 months of your Dad’s passing for a deferral, it does not happen automatically.

We have been paying nursing home costs privately, money is running out, can we now apply for Fair Deal ?

Yes, Fair Deal can be applied for at any time. If you have been paying privately for 3 years or more, your Principal Private Residence will be disregarded in your financial assessment under Fair Deal.

My brother is in a nursing home under Fair Deal. He did not apply for the nursing home loan with his initial application. It’s now looking like he might not have enough savings to pay the amount assessed on his family home for the next 18 months, what can he do ?

Your brother can apply for the nursing home loan now, it could have been availed of when he first applied for Fair Deal or any time during his stay in the nursing home.

The nursing home loan is 7.5% annually of the value of the principal residence, capped at 3 years, so 22.5%. If I die say after only 1 year can 22.5% still be taken from my estate?

No, using the example of a house worth say €200,000, 7.5% is €15,000 or €288.46 weekly. You are borrowing €288.46 a week for a maximum of 156 weeks (3 years). If you die after 20 weeks you only owe 20 x €288.46, if you die after 104 weeks you only owe 104 x €288.46 and so on. Even if you live forever the maximum that can be taken from the estate, for the nursing home loan is 156 x €288.46 (€45,000), ie there is a 3 year cap.

 

[Brendan Burgess]

Two for one

That is excellent. Thank you very much. I had found it very hard to understand this.

Here is my summary of two of the examples from the HSE FAQ which I have also attached to this post

Example 1

Mr Smith may choose to get a loan of €308 per week from the HSE. So he pays €200 and the HSE will recover the €308 from his estate when the house is sold.


Example 2

 

[Easter]

In addition to extra fees for entertainment, GP etc, some nursing homes also charge a top up on the actual room. In the last few weeks I have visited a number of private nursing homes in South Dublin. One had additional fees of between €55 and €240 a week for rooms! Another made a distinction between 'Fair Deal rooms' and private rooms. Again, there was a gap here of a couple of hundred a week. So when viewing, ask for the fees up front and save yourself some time on viewing homes that are out of reach financially.

On a related note, I would advise people to also sort out Power of Attorney. It becomes more difficult to access nursing home loan against the property if the person loses the capacity for consent.

Also... plan well ahead. Many of the nicer nursing homes have waiting lists of over a year.

I think it is also worth noting the differences between private and HSE nursing homes. I have heard that HSE have better nurse ratios.

Read the HIQA reports for each nursing home you view. All that glitters is not gold!

 

[thedaddyman]

A list of agreed prices the HSE have with nursing homes is here. However as a previous poster mentioned some homes are charging top ups for "additional services", whether or not the person ever avails of those services

[broken link removed]

 

[Easter]

A little note on Fair Deal application processing times. It took us 10 months to have our form processed after we had submitted all that was required from us in terms of financial details. The hold up was with local primary care team who had to complete reports from physiotherapists, nurse, OTs. We were also referred for specialist geriatric assessment and scans.

Once all completed forms were received by Fair Deal office it took about a month for funds to be made available. There is no reimbursement of fees paid privately if there are holdups in processing the application.

 

[Dan Murray]

Thanks to all for very interesting contributions.


1. If your income is, for simplicity, €100,000 p.a. - what precisely happens? Is it that €80,000 goes to the HSE and that your residual income is €20,000 - i.e. does the €20,000 become your gross income for income tax purposes?

Moderator's note: Question relating to ARF moved here:
ARFs and the Fair Deal Scheme

 

[twofor1]

In addition to extra fees for entertainment, GP etc, some nursing homes also charge a top up on the actual room. In the last few weeks I have visited a number of private nursing homes in South Dublin. One had additional fees of between €55 and €240 a week for rooms!

None of the nursing homes that I have family members in charge for GP’s but I have heard of it in others. It is very wrong that a resident with a medical card is charged for GP services.

Last year I looked at several nursing homes on behalf of an elderly relative, there was a single room available in a well known south Dublin nursing home, the manager explained that they only offer single rooms as part of their ‘’Premium Package’’ at a cost of between €200 - €400 weekly on top of one’s contribution from Fair Deal.

For the €200 premium package, you got hairdressing, toiletries, Wi-Fi in your room and a daily paper.

For the €400 premium package, you got the above plus a slightly bigger room on the 5th floor with stunning views. I was assured that the additional charge for premium packages was fully allowable for tax relief.

Most other nursing homes had an additional charge of €40 - €90 weekly that apply to each resident in single or sharing room, which they also say is for activities. Again they all assured me that this charge was fully allowable for tax relief.

I'm stunned that some are prepared to pay up to €400 weekly for a premium package and whatever about the activities charge being eligible for tax relief, I’m equally stunned that a person who chooses to pay an additional €400 weekly on top of Fair Deal for Wi-Fi, toiletries, a daily paper, haircut every 2 weeks and a stunning view could get tax relief on this additional payment.

 

[Brendan Burgess]

1. If your income is, for simplicity, €100,000 p.a. - what precisely happens? Is it that €80,000 goes to the HSE and that your residual income is €20,000 - i.e. does the €20,000 become your gross income for income tax purposes?

If your income is €100,000 , you pay €60,000 for your nursing home fees. You get a deduction of €60,000 for tax purposes, so your taxable income would be €40,000 a year.

The Fair Deal Scheme is not designed to help high earners, other than to give them tax relief.

Brendan

 

[Dan Murray]

Thanks Brendan,

My bad. Should have used €50,000 as the initial gross income for the purposes of the example.

 

[Brendan Burgess]

A person aged over 70 would have a net income of €756 per week.
80% would be €600

So they should contribute €600 towards their weekly cost.

But, if they pay €30,000 a year towards their care, their taxable income would be reduced to €20,000 so they would pay no tax.

80% of €50,000 would €40,000 per year or €770 per week.

I don't know if the HSE does this extra round of calculations. They should base the 80% on gross income as it would be the same as net income for those affected and claiming a tax deduction.

Brendan

 

[Dan Murray]

....They should base the 80% on gross income as it would be the same as net income for those affected and claiming a tax deduction.

Just checked the legislation - assessable income is net income.

In relation to my main query (transferred to its own thread) - the legislation is silent on ARFs!

 

[Brendan Burgess]

I have a list of examples in this post:

Explaining the Fair Deal Scheme

 

[Sue Ellen]

Great information here folks. Having been through the process some years back with a relative I know that the whole thing can be quite stressful and daunting.

Brendan/twofor1,

Would this list from Google of the previous threads on AAM and elsewhere be useful for this Key Post?