Participants in the Fair Deal Scheme should be obliged to rent out their houses

Discussion in 'Housing and mortgage arrears - policy issues' started by Brendan Burgess, Aug 12, 2017 at 10:18 AM.

  1. twofor1

    twofor1 Frequent Poster

    This is a big part of the problem, it rarely makes sense to sell the house, so they remain empty.

    The house is assessed at 7.5% annually for 3 years only, so the maximum that can be taken is 22.5%, even if the person in care lives for 10 years or more. By keeping the house, at some stage the beneficiaries are going to get at least 77.5% of the house value.

    If the house was sold at the time of entering nursing home care, one would be assessed on the proceeds indefinitely. The longer the person in care lived the less there would be in the pot.

    Perhaps an incentive to sell when the person enters nursing home care rather than when they die which can be many years later would surely see many empty homes on the market. And / or would a substantial vacant property tax do the trick ?

    When Fair Deal started it was 5% of property value capped at 15% and 5% of other assets.

    By 2013 there were more people availing of Fair Deal and they were living longer so contributions were increased to 7.5% of property value capped at 22.5% and 7.5% of other assets.

    Increasing the 7.5% again and extending the 3 year cap to 4 years would mean a lot more are paying themselves and at the same time leaving something for their beneficiaries.

    I think these would be better solutions than the imputed rent solution which throws up numerous complications.
  2. Gervan

    Gervan Frequent Poster

    I really can't see how this could work. If we had to offer our house for rent just now, no-one would want it! It's full of personal possessions, old equipment, things that don't work very well, beds with old mattresses, carpets that need cleaning.
    Is the proposal that the families now have to bring these vacant properties up to the standard that will be acceptable? Who is to pay for that, and what happens to a lifetime if books and belongings?
    odyssey06 likes this.
  3. Threadser

    Threadser Frequent Poster

    Very good point. Most houses vacated by elderly people are not in a suitable condition for renting. Also a parent moving to nursing home care is a hughly traumatic time. Expecting people to rush ahead and clear the family home of all personal belongings ignores the reality of the hugh emotional upheaval surrounding this whole process.
    odyssey06 and Westgolf like this.
  4. Easter

    Easter Registered User

    Forcing people to become landlords at such a stressful time is unrealistic.

    I agree though that tax payers shouldn't have to pay nursing home fees for people just to preserve inheritance. The inheritance tax thresholds are already generous enough.

    I think there is a horrible culture of entitlement to inheritance in this country. If the fair deal needs more funds, up the percentage contribution and extend the years over which it's to be taken.

    In return the State should make more good quality public nursing home beds available and end the need for families to pay hundreds of Euro monthly in top up fees to the Fair Deal.

    As for making housing available - make more ghost estates available as social housing. I don't buy that they're too far from family etc for them to be right for people. Thousands of people have had to emigrate to fund mortgages and can't live in their chosen locations. Why should people who choose to have children without a job get centrally located in housing that is needed for workers? If you're not working and want a council house, accept one in a location that isn't in demand for workers. Controversial I know, but there are so many workers that can't have their chosen location. Why must everyone on the council housing lists be accommodated in those particular council areas? To afford a house I will have to move out of Dublin. No matter how many years I work and wait I won't be able to afford a house in Dublin. Why should my taxes fund others to live where I can't? This is a bigger issue than the rental of vacant houses under Fair Deal charges.
  5. Leper

    Leper Frequent Poster

    This whole subject stinks from where I sit. You are an old person and worked and paid taxes all your life. Suddenly, you are too infirm to stay at home and you must be hospitalised. Hospitals/Nursing Homes are such; they are not holiday homes. Currently, we punish people who have saved for old age and we award many who squandered every asset they have. The freeloaders get away scott free as usual.

    Some form of fair play is required for everybody not marginalisation. Of course, we will never get this because of the "We get everything free" culture that our politicians have supported since the foundation of the state remains.

    Just look at our Childrens' Allowance system. Everybody gets it. Whether you are Leper or Michael O'Leary you are entitled. The 3rd Level Grants system is probably the most abused of all. Some of us pay through the roof to send somebody to university, many others screw the system and it costs them nothing.

    So now, we want to force our elderly to rent out their houses to pay for Nursing Homes/Hospitals. It's a loser from the start. Again it would only be the honest people who would be "caught."If this idea was inflicted on say the immigrant community there would be uproar. Somebody earlier said the unions were part of the cause of our elderly needing care. Sounds like that Austrian former corporal with the small moustache blaming the Jews for everything. Trade Unions don't represent the non paying elderly and never did.

    The subject is becoming a little hurtful as its likes could plant a seed that will grow into a spreading ugly tree.
    jjm, Marsha25 and NicolaM like this.
  6. Brendan Burgess

    Brendan Burgess Founder

    I agree that we have a freeloader culture which should be tackled.

    I agree with others who have said we should tackle ghost estates.

    But we need to tackle all of the problems.

    And it's a huge problem to have homes lying vacant while people are in nursing homes.

    My priority here is to give people an incentive to rent out their houses or to discourage them from leaving them idle.

    Of course, there will be practical problems. It's a stressful time - fine, make no deduction for the first three months to allow the family to deal with one issue at a time.

    They don't want to be a landlord - fine. Sell the house or pay the costs themselves.

    We have to make the housing crisis a priority and we must stop encouraging people to leave homes empty. That housing crisis is at all levels and not just the lack of social housing.

  7. Marsha25

    Marsha25 Registered User

    I don't think it's that simple. A persons home is, in their mind, always going to be that. Many elderly may harbour a secret thought that they may someday go home and therefore not dwell on the fact that they are effectively heading to the departure lounge! Supposing there is no son/daughter, or they live away. Who is supposed to take charge of renting out the house, dealing with tenants, maintenance if a washing machine breaks etc? The home owner won't be in a position to do it. I don't think anyone should be effectively pressured to rent out their house. Going into a nursing home can be a traumatic stage in an elderely persons life. For them to be pressured to give up that home, have to clear out all their belongings and have strangers move in is not going to be an easy task.
    And I agree with Leper, that generation have fulfilled their tax obligations over their years of working and should not be made feel that you or I are effectively paying for their care. There are other sectors of community where I wholeheartedly begrudge funding via my tax contribution, but the elderly having to go into a nursing home is not one.
    G7979, Westgolf and Threadser like this.
  8. Brendan Burgess

    Brendan Burgess Founder

    Hi Marsha

    There are two issues here

    The primary one is the shortage of housing. I really think that we need to address this whatever way we can. We should not incentivise people to leave their homes vacant.

    The second one is the the fairness of it. Like you I resent paying high taxes to pay some of the highest social welfare rates in europe and I resent that more than paying for elderly people's nursing home care. But I have to say, there is no reason why you should have to pay for my care if I have a valuable house which could be sold to fund it.

  9. Marsha25

    Marsha25 Registered User

    We had the situation where my elderly parent went into a nursing home. As his savings dwindled we had to look at the situation. He agreed to sell after a few months of being in the home. There was no choice and we had to take into account the fact that the sale proceeds would then be assessed as savings for the second 3 year term. It was a very stressful and emotional time, having to clear out all our parents possessions quite quickly and him knowing that his home was gone. I do wonder how people manage without selling up as even with the fair deal contribution, money has to be paid weekly and if a person has an expensive house they are paying a good bit more than my father. I'd say the stress of it all contributed to his demise. I wouldn't wish the situation on anyone. It does become necessary for some to sell up or rent in order to pay for their portion of fees, but I still don't think it should be a condition of availing of the fair deal.
    Westgolf likes this.
  10. Brendan Burgess

    Brendan Burgess Founder

    In virtually all these cases, the owner of the house is never going to return to them. It's immoral to leave the house empty when there is a shortage of houses. It's immoral to have a system which encourages them to leave it empty.

    As I said earlier, it's like paying farmers not to farm their land when people are starving.

  11. twofor1

    twofor1 Frequent Poster

    One of my elderly relations built their own house at night and weekends, he and his wife then reared their family in their family home.

    She passed away, he is now in a nursing home under Fair Deal. He will never live at home again, but it is still his home and he is brought there for a cup of tea once or twice a week and he will watch the match there on Sunday afternoon.

    If his home was rented he could never go home again.

    If that's immoral so be it.

    Expecting the elderly to rent the family home is not the solution, there are other options.
    Sarenco, G7979, Leper and 3 others like this.
  12. Clamball

    Clamball Frequent Poster

    I think it is right that vacant homes become part of the housing stock for the good of the country. But there are many considerations before fair deal recipients should be compelled to rent their home as part of the fair deal scheme.

    I know my in-laws found it all very tramuatic with my MIL becoming ill before Christmas, the acute hospital trying to discharge her, when she could no longer walk and her mental state deteoriating rapidly. Getting so much conflicting information on the fair deal, needing to organise valuations, agree a nursing home, explain any delays to the acute hospital, solicitors, banks, all the bills for the house etc. The fair deal seemed to be pretty confrontional as far as I could see as they were ensuring all bank accounts and assets were declared as the MIL had left very confused records. Adding to all that stress the requirement to get the house into a rentable state, remove and deal with personal belongings, etc just seems to add another layer of stress. I am sure my inlaws would be very happy to use the rental income to maintain the house, pay towards the fair deal etc. But as some one else said reluctant landlords have a lot to deal with, if you need to pay house insurance where does the money come from? 80% of income goes to nursing home, 20% belongs to the home owner and many of them are in no position to approve payments.

    If the government steps in to help and set up a one stop shop what's the betting it becomes so beruacatic that the elderly person waits even longer in an acute bed before the transfer to a nursing home and the health system suffers.
  13. odyssey06

    odyssey06 Frequent Poster

    That's a can of worms Brendan.
    It must have been immoral then to ban bedsits - whereas I would say it was a stupid, utopian short sighted measure and anyone who voted for it should have a guilty conscience.
    It must surely have been immoral not to allow Docklands developments to be another storey higher?
    It's immoral to allow nursing home fees to spiral out of control meaning that both the state and the person in the nursing home are paying over the odds the treatment.
    Why do 24 paracetamol cost €2.50 in the Republic, and under 1 pound in the North?
    A fair deal should mean a fair price for fair treatment.

    Taken to its logical conclusion, it would be immoral to allow people to own > 1 home, or a home that was bigger than 'their needs'. A single person shouldn't be allowed to occupy a three or four bed property on their own.
    We should confiscate enough farm land until we have sufficient land to build enough houses - we can import food, we cannot import space for housing.

    We have developers sitting on zoned land, not building the houses that are desperately needed... should they not be the first targets for the urgent moral action rather than the people in nursing homes???
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  14. odyssey06

    odyssey06 Frequent Poster

    Last edited: Aug 13, 2017 at 3:19 PM
    I think also in 'weighing the balance sheet', you forget the taxes that these people would have paid all their life... on the understanding that they paid it when they had it and the state would be there for them when they needed it.
    If we're to move away from that model then we would also need to look at all other aspects of the taxes and state supports model.

    At the moment the state is getting something back from the value of these assets... I think there's a very real chance if the state tries to grab too much \ makes the conditions too onerous they will find there's nothing there to grab. Why leave a nest egg if the state will confiscate it... spend it all, live the high life and end up with nothing in reserve at 65 - and the state will give you the same support.
    Then you are into moral hazard territory...
    Last edited: Aug 13, 2017 at 3:19 PM
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  15. Monbretia

    Monbretia Frequent Poster

    Should people be compelled to rent out spare bedrooms in their house? Anyone living in a house on their own with more than one bedroom :) Might be a lot easier than getting perhaps an old house ready for renting. It wouldn't help with nursing home costs but would help the housing situation.

    I know there is no way my father's house would rent in it's present state, nothing really wrong with it if you are of his era but I wouldn't rate the chances of younger people renting it, no dishwasher/dryer and no room for them either.

    Actually there is a council house near his that has been fully renovated and has been turned down by several people, it's old style very small by today's standards with a kitchen no bigger than most utility rooms, people just won't go for that anymore. Might be different if all these properties were in Dublin but they are not.
  16. Gordon Gekko

    Gordon Gekko Frequent Poster

    My own view is that there should be incentives to give up larger/vacant homes rather than penalties for having them.

    The sanctity of the family home must be preserved; it is up to Government to solve the housing crisis through the delivery of new units, not by way of a land grab and demonisation of people who have paid their way all their lives.
    G7979, NicolaM, jjm and 2 others like this.
  17. Brendan Burgess

    Brendan Burgess Founder

    Banning bedsits was indeed stupid. But that does not mean that it's ok to encourage people to leave empty houses vacant during a housing crisis.

  18. Brendan Burgess

    Brendan Burgess Founder

    Probably not. But if they are on social welfare or if they are getting rent allowance, they absolutely should be.

    If I want to pay to live on my own in a three bed house that is fine. But I should not be getting paid by the state to do so.

  19. Brendan Burgess

    Brendan Burgess Founder

    That is exactly what we need to demolish.

    Some religious notion that you should pay taxes to keep my father in a nursing home so that he can keep his house empty and leave it to me free of taxes when he dies.

    There should not be anything sacred about the family home during a housing crisis.

  20. odyssey06

    odyssey06 Frequent Poster

    Let's reverse course on making stupid mistakes like banning bedsits first then see where we are. I don't think this will make any realistic or meaningful contribution to ending the housing crisis.
    How many people whose homes are empty are in Fair Deal schemes?
    How many of them can we say with certainty will never return home?
    How many of those properties are in RPZs and would be in a fit state to rent?

    I think allowing developers to leave zoned land unbuilt is a far bigger cause of the housing crisis, and sorting that out will do 100 times more to resolve the housing crisis than this proposal.
    The conduct of some mostly southern Dublin councils in setting completely unrealistic building standards means they are sitting on large land banks.
    Let's tackle them as sacred cows first.

    How 'sacred' is the family home when some of its value is already in the scope of the clawback of the Fair Deal scheme? Seems like we have already crossed that bridge.
    I think it's a fair question to ask how much should the state be seeking to claw back in value. But I don't think conflating it in with the housing crisis is going to be helpful to that debate, or to the housing crisis.
    I think it's also fair to question what the long terms effect will be if people see no incentive to owning their own home and instead relying on state support - the state picks up the nursing home fees of people who have no assets to clawback from.
    So why bother working hard to build up assets if you are going to end up in the same boat as if you never tried?