The Fair Deal Scheme (also known as the Nursing Home Support Scheme) was introduced in 2009 to provide financial support for people that require long term care in a nursing home.
The general rule is simple: the more assets and income you have, the more you will pay toward your care. The process consists of two main stages, once you’ve completed the application form:
- Care Needs Assessment
This stage examines whether long term care in a nursing home is required.
- Financial Assessment
At this stage, your income and assets will be reviewed to determine if you are eligible for financial support, and if so, how much support you will require.
Care Needs Assessment
This assessment is carried out by a qualified medical professional who will determine whether you require long term care in a nursing home.
This assessment may take place either in your home or in a hospital, depending on your situation.
Financial Assessment
The HSE will assess your regular income and assets to determine whether you qualify for the scheme and if so, what your contribution will be.
Income
- 80% of all your regular income will go towards your long-term care.
- Regular income can include sources such as pension payments, rental income, social welfare payments, and other recurring earnings.
What does this mean?
If I am single person and I have a regular weekly income of €1,000 I will be required to contribute €800 towards my nursing home care weekly.
It’s important to note that rental income from your main home may be exempt from consideration, but only if it meets specific criteria set by the Fair Deal Scheme.
Assets
7.5% of your assets per annum will go towards you long term care.
Your assets could include your home, cash savings, development property, farms, business etc. The first €36,000 of your assets is exempt. This amount will be deducted first from your cash assets, with any remaining balance being deducted from your other assets.
Furthermore, there is a 3-year cap on your home i.e. the maximum contribution you will make on your home is 22.5% of the value, this applies from the date you enter the nursing home. This means if your home is valued at €350,000 you will only pay a maximum of €78,750 (22.5% of 350,000)
If Assets are sold or transferred 5 years prior to the application date they are included in the assessment.
If you have a partner your contribution will be 3.75% per annum and your exemption will be €72,000.
Nursing Home Loan – Optional
Another option is to defer your contribution related to your home through the Nursing Home Loan (also known as the Ancillary Loan). For example, if the total repayment due to the HSE is €78,750 (350,000 * 22.5%), this amount can be deferred until after your loved one’s passing. However, you will be required to repay the loan within 12 months after the resident is deceased. This may require selling the house to cover the loan.
Interest will be charged after 12 months, and the loan is also subject to changes based on the Consumer Price Index (CPI), which can reflect inflation or deflation.
This article was published by Donal Dempsey, Donal is a Director of Care Home Consultancy and specialises in providing expert Fair Deal advice. If you find this article useful you may find other relevant information about the Fair Deal process and how Care Home Consultancy can support you.
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Donal Dempsey
Care Home Consultancy
