I wonder would the two sons in your original example not be better off topping up their mother's income to pay the nursing home fees in order to keep her out of the FD scheme entirely?
Well, she will have to contribute 80% of her net annual income (~€25k) and her estate will potentially lose up to 22.5% of the value of her house.
I'm not sure I understand this - will her estate not lose up to 22.5% of the value of her home (€157,500 at today's value)?
Alternatively, the mother and her sons could foot the nursing home bill without going into the scheme at a net cost of ~€35k per annum.
Happy to be corrected on any of the above.
No one pays more than the cost of their care.
Are you saying the following
1) She pays €32,000 out of her own pocket
2) She is deemed to pay the other €28,000 although the HSE actually pays it.no she pays the full 60k.
3) She gets tax-relief on the full €60,000
Brendan
OK twofor1
She registers for the Fair Deal, but the HSE doesn't pay anything or lend any money.
If so, then the correct thing for people to do is
1) Register for the Fair Deal immediately
2) The children should pay most of the nursing home fees.
Brendan
How on Earth can the kids get tax relief and the Fair Deal monies?!
‘’ If you have already been in a nursing home for 3 years when you apply for the scheme, then you do not pay the 7.5% on your principal residence.’’
Can’t see this mentioned on the HSE or Dept of Health sites, but if this is up to date and correct, then there is probably no point in the lady in this case going through Fair Deal. Her sons can pay privately, get the tax relief and apply in 3 years time for Fair Deal.
Assuming the statement is correct, would it not be fair to say that it would be positively unwise to apply for the FD scheme until the lady in this case has been in a nursing home for three years?
Yes, that is what I have said in my post that you have quoted.
Well, no, you said there was "probably no point" in going through the FD scheme, which suggests that it probably doesn't matter much either way.
What I'm asking is whether the family in question would actually be better off opting not to avail of the scheme, at least until the mother has already spent three years in a nursing home?
Apologies in advance if I have misrepresented your position.
So for the first 3 years of nursing home care, why not just claim tax relief on the €80k fee, resulting in an annual cost of €48k? Then enter Fair Deal which would make the fee €32k forever (i.e. 80% of the individual's income).
No €156,000 landgrab in respect of the house and the effective fee for the family capped at €32k forever.
So you are not saying it would be positively unwise to avail of the scheme.
You are saying that it probably doesn't matter much either way but, on balance, you would opt into the scheme on the basis that it might provide some protections from possible future changes to contribution levels. Right?
So you disagree with Gordon's analysis below - is that correct ?
I cannot see any reason why this lady with a €700K house and annual income of €40K would not be in Fair Deal, she has nothing to lose, and potentially a lot to gain. Nursing home fees are deductible whether you are in under Fair Deal or not.
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