The Nursing Homes Support Scheme, known better as the Fair Deal Scheme, provides financial support to people who need long term nursing home care. There’s a lot to it so here are the key points you need to know.
1. Care Needs Assessed
Before confirming that long-term nursing home care is the most appropriate option, HSE professionals will first assess your physical abilities, current local and family supports already available to you and of course your personal wishes.
2. Financial Situation Assessed
Your finances are examined to see how much you have to contribute towards your nursing home fees. If “Your Contribution” is less than the annual care home fee, the HSE pays the balance. “Your Contribution” is 80% of your annual income (less certain deductions) and 7.5% of the value of any assets (per annum). The first €36,000 of your assets will not be counted and your principal residence (and from October 2021 your farm or business if a family successor continues to operate it for six years) will only be included in for the first three years of your time in care. From October 2021 the proceeds from a home sale will also benefit from the three year rule, thus removing a clear disincentive to sell empty properties. As a rented home is subject to both the 80% of income and 7.5% of assets rules, a disincentive to rent out empty properties, a plan to not apply the 80% rule to rent is proposed (but not passed).
3. Nursing Home Loan
If you want to defer (until after death) the part of “Your Contribution” that is based on your home or other property you can apply for a Nursing Home Loan, also called Ancillary State Support, in which case a HSE Charging Order is registered against the asset in question (like a mortgage).
In a nutshell, if “Your Contribution” is greater than the annual care home (while taking into account a possible year four reduction) then it makes sense to pay the fees yourself. But remember, if you are paying nursing home costs for yourself or another person you can claim tax relief at the marginal rate. And let’s face it, all of this is another good reason to start estate planning as early as possible.