Fair Deal/Nursing Homes Rent family home and keep the cash in new Fair Deal revamp.

In any other circumstance, 80pc of rental income is taken by the Government towards the cost of a person’s nursing home care.

The Housing For All plan will propose that the exemption for family members will be extended to rental income raised from any tenant staying in a person’s principle residence while they are in care.
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I think the 80% confiscation rate is too much, but I think that 0% would be much too little.

If you have means you should have to forfeit part of it to pay for your care.
 
How does this work for tax purposes - the house owner is the person in care, if FD aren't taking the income, it has to be taxed, right? The kids can't just pocket it, so as you say, unlikely to have much impact on the housing shortage - the hassle involved is unlikely to be worth it for the kids.
 
shweeney said:
How does this work for tax purposes - the house owner is the person in care, if FD aren't taking the income, it has to be taxed, right? The kids can't just pocket it, so as you say, unlikely to have much impact on the housing shortage - the hassle involved is unlikely to be worth it for the kids.
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That would be my reading of it. While the rental income might be excluded from the Fair Deal financial assessment, presumably the net rental income belongs to the nursing home resident and is taxable like any other income.

Other reasons that come to mind for not wanting to rent;

Many availing of Fair Deal still use their house. Some of my family were or are frequently brought to their home for a cup of tea, or to watch a match, or to sit in the garden for a while, it means a lot to them, and makes having to live in a nursing home more acceptable.

No family member might be willing to take on the role of landlord and all the headaches that go with it. I certainly would not be volunteering.

Some will not have the money needed to comply with rental standards and obligations or might not consider the investment worth the return.

Many homes that are officially vacant, have family members living in them on a rent free caretaker basis, and / or used by family living abroad when they return for holidays etc.

Concerns over getting vacant possession when the owner passes away I’m sure will put some off renting.
 
It's possibly a minority, but people do have houses rented out and owners are in the Fair Deal scheme. In saying that, I am referring to owners who in a lot of cases do not know it's happening. Don't ask me how I know that, I just do. Is tax being paid on that income? The answer is, no. :cool:
 
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I'm more interested in this (from the same article):

"Legislation which imposed a three-year cap on annual contributions to Fair Deal from the sale of a family home was recently signed into law by President Michael D Higgins."

Anyone have more info?
 
This was very unclear to me. Who would have the authority to rent out the house? Presumably most people in nursing homes wouldn't be able to manage a letting, even without diminished capacity. The majority of people I know availing of fair deal have dementia: I suppose this could allow for the house to be lived in and to make a contribution towards upkeep, but would the decision-makers/landlords be whoever had power of attorney? And then presumably all expenses/profits can either go on covering the cost of 'extras' in the nursing home or just build up in a bank account?

I know of one case where someone is likely to go into a nursing home soon but the house would need a massive refurbishment, including removing a lot of aides like stairlifts etc, before it could be rented out. And then when the owner passes away, the house would end up being sold. Its difficult to imagine it working in practice for a lot of families.
 
Thirsty said:
I'm more interested in this (from the same article):

"Legislation which imposed a three-year cap on annual contributions to Fair Deal from the sale of a family home was recently signed into law by President Michael D Higgins."

Anyone have more info?
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This has been talked about for a long time, I thought it would only apply to farms and businesses, not family homes, maybe that is not the case, I don’t know. This article explains the farmers grievance but also says;

Sale of assets​

Minister Butler said she is currently working on another amendment with Minister for Housing, Local Government and Heritage, Darragh O’Brien.
This relates to the potential sale of the family assets while a person is availing of nursing-home care under Fair Deal.
The various complexities of this amendment are still being worked on, according to Minister Butler.

https://www.agriland.ie/farming-news/fair-deal-successor-must-operate-farm-for-six-years/
 
shweeney said:
How does this work for tax purposes - the house owner is the person in care, if FD aren't taking the income, it has to be taxed, right? The kids can't just pocket it, so as you say, unlikely to have much impact on the housing shortage - the hassle involved is unlikely to be worth it for the kids.
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I suspect the rent would be subject to income tax. Secondly the income is legally the nursing home patient and as such will form part of their estate when they pass away and as such the state can claim 22.5% of the value of the estate.

On top of this there are potential CAT implications depending on value of inheritance etc.

Personally I can't see many people availing of this for the reasons mentioned in the other posts along with the anti landlord legislation.
 
The Horseman said:
I suspect the rent would be subject to income tax. Secondly the income is legally the nursing home patient and as such will form part of their estate when they pass away and as such the state can claim 22.5% of the value of the estate.
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I understood 22.5% only applies to the asset value at point of entry to the scheme. For existing FD participants this is now fixed. The upside including rental profits is gravy.
 
Banquo said:
I understood 22.5% only applies to the asset value at point of entry to the scheme. For existing FD participants this is now fixed. The upside including rental profits is gravy.
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I would have thought it was the value of the estate at the date of death. I don't know for definite but what happens if the value of the estate increases significantly either by increase in property value or if the patient themselves receive money.

On the flip side what would happen if the asset value were to drop? Does the 22.5% increase to equate to the original money amount?
 
The Horseman said:
Secondly the income is legally the nursing home patient and as such will form part of their estate when they pass away and as such the state can claim 22.5% of the value of the estate.
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I think you are misunderstanding the Fair Deal financial assessment. The state cannot claim 22.5% of the estate on death.

You pay 7.5% of house value for 3 years only, you can pay this part weekly / monthly for the first 3 years or avail of the loan. If you avail of the loan and you live 3 years or more, then 22.5% will be owed on your death. But it will be 22.5% of the house value only (As declared in your application), and not any other assets that are in the estate. If the client lives for 2 years, only 15% of the house value only will be owed, 1 year 7.5%.

Regardless of whether you avail of the loan or not, all Fair Deal clients must after disregards pay 7.5% of all other assets on a weekly / monthly basis for as long as they are in care, not just 3 years. This part of your contribution cannot be deferred.

Many don’t avail of the loan and owe nothing to Fair Deal on death even though they might have valuable estates.
 
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twofor1 said:
I think you are misunderstanding the Fair Deal financial assessment. The state cannot claim 22.5% of the estate on death.

You pay 7.5% of house value for 3 years only, you can pay this part weekly / monthly for the first 3 years or avail of the loan. If you avail of the loan and you live 3 years or more, then 22.5% will be owed on your death. But it will be 22.5% of the house value only (As declared in your application), and not any other assets that are in the estate.

Regardless of whether you avail of the loan or not, all Fair Deal clients must after disregards pay 7.5% of all other assets on a weekly / monthly basis for as long as they are in care, not just 3 years. This part of your contribution cannot be deferred.

Many don’t avail of the loan and owe nothing to Fair Deal on death even though they might have valuable estates.
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As far as I can recall it is the total value of the estate which excludes I think €36k of savings for a person and €72k for a couple.

If you don't avail of the loan then you finance your stay. If you do avail of the loan you pay 80% of your income along with the 22.5% of the value of your estate.

It's been a good while since I looked at it and did not go too deeply into it as it was not applicable to my family at the time.
 
The Horseman said:
It's been a good while since I looked at it and did not go too deeply into it as it was not applicable to my family at the time.
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I think if you looked into it a bit deeper you would find the state cannot take 22.5% of the estate on death. If the loan was availed of, it's possible up to 22.5% of the house value only could be owed.
 
My understanding is...

You pay up to 7.5% of the value off your home for 3 yrs. 80% of income, pensions etc.

All other asset's call etc are not limited to three years and that's taken at 7.5% a year every year until the balance falls to 36k for a single person 72k for a couple or they no longer need care.

However you should never pay more than the cost of the care. You also don't have to use the house to pay the bill, invoice at the end If you have other asset's, cash etc., you can use those to pay off the loan etc. and leave the house untouched.

If the house is sold while the person is in care. You turn it into cash basically, and the full amount can be used to fund care as long as the person is in care.

I think its very confusing.
 
As others have said, I think there's a load more problems with renting a property than giving up away 80% of the income.

Everyone wants to get their hands on older people properties. When they should be getting the govt to build the houses they've been promising for decades.
 
twofor1 said:
Yes cash and all other assets are included in the financial assessment but the amount assessed on cash and other assets must be paid on a weekly / monthly basis and cannot be deferred.

The state cannot take 22.5% of your estate on death.
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Yes but do you agree the 2
twofor1 said:
I think if you looked into it a bit deeper you would find the state cannot take 22.5% of the estate on death. If the loan was availed of, it's possible up to 22.5% of the house value only could be owed.
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Agreed but is the 22.5% calculated on the valuation of the house when entering the scheme ( my understanding) or on the valuation of the property on death ( assuming it's not sold in the meantime).?
 
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