The Fair Deal scheme is a complicated process for many to navigate. Research compiled for the recent ifac Irish Farm Report found that 90% of farmers have limited or no understanding of the Fair Deal scheme.

Alice Doyle, chair of the IFA Farm Family and Social Affairs Committee, says it is one of the main issues farmers contact the committee about.

“Since I took over a year ago as the chair of the committee, it is one of the main issues I deal with every single day,” she explains.

Alice Doyle.

Since farm assets were included in the three-year cap on how much you pay towards nursing home care, the scheme has become more attractive for farm families who meet the requirements. However, Alice advises that each farmer/family look at their individual circumstances if considering applying.

Here are the main points you need to know.

What is the Fair Deal scheme?

The Fair Deal scheme, managed by the Health Service Executive (HSE), provides financial support to help individuals pay for the cost of care in a nursing home through the Nursing Homes Support scheme. Anyone who may need long-term nursing home care can apply free of charge.

What does it cover?

Under the Fair Deal scheme, the individual pays a certain amount towards the cost of care and the HSE pays the rest. The scheme covers long-term nursing home care along with the following:

  • Accommodation and food.
  • Nursing and personal care you may need.
  • Laundry service.
  • Basic aids and appliances necessary to support your everyday life.

    • Not covered in the scheme are:

  • Short-term care – such as respite, convalescent or day-care.
  • Extra fees charged by the nursing home for services like hairdressing, therapies or activities.

    • The application process

    There are four steps to the Fair Deal application process: (1) The application form, (2) Care needs assessment, (3) Financial assessment and (4) Applying for a nursing home loan (if required).

    1 Completing the application form

    The Fair Deal application form should be completed and signed by the person applying for nursing home care. However, in certain cases, another person may apply on their behalf. See the list of who can be deemed to be a specified person across (right). It is important that nothing on the form is left blank. Supporting documents required, such as proof of income, need to be included in the application form. After you gather the application documents, send the completed form and documents to your Local Nursing Homes Support Office. The HSE then informs the client when their application has been received, after which they will contact them to arrange the care needs and financial assessment.

    A specified person

    A specified person may apply on behalf of an individual needing care if they are unable to apply themselves.

    First priority

    A. Your committee, if you are a ward of court (deemed by the courts to be unable to look after your affairs).

    B. A person appointed under an enduring power of attorney.

    C. A Care Representative appointed under the Nursing Homes Support Scheme Act 2009.

    Lesser priority

    D. Your spouse or partner

    E. A relative of yours who is 18 or over.

    F. A ‘next friend’ appointed by a court.

    G. Your legal representative.

    H. A registered medical practitioner, nurse or social worker.

    2 Care needs assessment

    The care needs assessment evaluates the individual’s circumstances and living environment to determine if the person can continue living at home or if long-term nursing home care is necessary. Healthcare professionals appointed by the HSE, such as a public health nurse, will carry out the care needs assessment.

    3 Financial assessment

    The financial assessment works out how much you can afford to pay towards your nursing home care. The HSE will pay the remaining balance of the weekly cost of your care. The financial assessment looks at all of your income and assets.

    The weekly client contribution is calculated as follows:

    For a single person:

  • 80% of their income.
  • 7.5% of their assets.
  • €36,000 asset disregarded.
  • Allowable deductions (income tax, PAYE, USC, PRSI, etc).

    • The client will be left with the minimum of 1/5 of a non-contributing old-age pension.

    Examples

    A single person’s weekly contribution:

    Michael is single. He has an income of €240.30 per week, no cash savings and a home that is valued at €200,000. Under the Fair Deal scheme, he will be expected to pay the following:

  • 80% of his income – €192.24 per week.
  • 7.5% of the home’s value (excluding the first €36,000) – so €236.54 per week.

    • Michael will therefore pay a total of €428.78 per week towards the costs and? the HSE will pay the rest.

    The three-year cap means Michael will only pay the 7.5% contribution based on the value of his home for the first three years. After three years, he will pay €192.94 per week.

    For a couple (assuming one person is in care):

  • 40% of their income.
  • 3.75% of their assets (half).
  • €72,000 assets disregarded.

    • The client will be left with a minimum of a full non-contributing old-age pension and 1/5 of a non-contributing old-age pension (as one person is living at home).

  • A member of a couple is assessed based on the combined income and assets of the couple.
  • List of allowable deductions include income tax, PAYE, universal social charge and PRSI. Full list available by scanning the QR code.
  • If your assets include land or property, the 7.5% contribution based on these assets may be deferred and paid to Revenue after your death.

    • Rental income from your home

    If you own your home and are renting it out to a tenant, you can apply to pay only 40% of this rental income towards nursing home care. This means you can keep 60% of the rental income if your home is your principal residence.

    Planned changes to the Fair Deal scheme look to incentivise the selling or renting out of unused homes. A new reform could reduce the rental income to zero. This would result in nursing home residents keeping all their income from renting out their home – it wouldn’t go towards the financial assessment, but taxes still apply.

    How to apply

    1 Fill out the Principal Private Residence Rental Income application form.?

    2 Send copies of the following to your local Nursing Homes Support Office:

  • Residential Tenancies Board registration approval letter.
  • Rental agreement showing the rental amount.
  • Latest notice of assessment from Revenue.

    • 4 Financial support (if required)

    There are two types of financial support available under the scheme – state support and a nursing home loan.

    State support

    Your income and assets are assessed and your weekly contribution is worked out. The HSE will pay the rest of the weekly cost of your care.

    Nursing home loan

    This is an optional extra feature of the Fair Deal scheme if the person in nursing home care has assets including land and property.

    If approved for the loan, the contribution based on your assets (land or property) can be deferred. The HSE will then pay that portion of your cost of care on top of your state support payment. The title to the applicant’s property must be established for a loan to be granted.

    The loan is paid back to the State after the following events:

  • The applicant has passed away – 12 months to repay loan from date of death.
  • Sale/transfer of the property or part of the property – six months to repay a loan from the closing date of sale. If a spouse is living in the property, the loan is repaid after their death.
  • The bankruptcy of the applicant or spouse.
  • You provide false information in the application.

    • The three-year cap

    The three-year cap refers to a limit on how much you pay towards nursing home care as part of the Fair Deal scheme. It means you only contribute 7.5%, based on the value of certain assets, for a maximum of three years.

    These assets can include:

  • Your home.
  • The proceeds of the sale of your home.
  • Your farm or business.

    • After three years, you will not give any further payment based on these assets, even if you are still getting long-term nursing home care. All other assets will be taken into account for as long as you are in care.

    Couples and the ‘three-year cap’

    Couples pay a 3.75% contribution based on their home for a maximum of three years. Your total contribution over the three years is capped at 11.25% of the property’s value. If both partners are in care, the total contribution is capped at 22.5%.

    Relevant Farms and businesses

    Family-owned farms and businesses can be included in the three-year cap if they meet the qualifying conditions. You must apply if you want your farm or business to be included.

    Conditions include:

  • The client must apply to the HSE to appoint a family successor. They must also be aged 18 or older and must be related to the applicant.
  • They must commit to running the farm or business for at least six years from the date of appointment.
  • Your farm or business must have been actively run by you, your partner or your proposed family successor for at least three of the five years prior to admission to care.
  • A charge in favour of the HSE will be placed on the property of your farm or business.
  • This is a type of mortgage that will be removed when:

    • 1 The successor’s commitment period of six years has ended.

    2 All other conditions of the three-year cap have been followed.

    You might have to repay money to the HSE if your successor doesn’t comply with the conditions of the scheme.

    HSE Case study

    Patrick and Anne are married and living in Co Cork. They have a farm worth €400,000 and a house (principal private residence) worth €100,000. The couple’s weekly combined income is €496.60. They also have savings of €80,000 in the credit union. Anne has been sick for a number of years and now requires nursing home care. Their financial assessment is below.

    Income safeguard: Patrick, who is remaining at home, is left with 50% of the couple’s income or the max-rate of non-contributing old-age pension (whichever is greater). Anne, while in care, keeps 20% of their income or 20% or max-rate of non-contributing old-age pension (whichever is greater when assessing portions of contribution based on income).

    Patrick and Anne are eligible for the three-year cap on relevant farms and businesses, meaning after three years they won’t have to pay the €288.46.

    More information

    If you have a query surrounding the Fair Deal scheme, contact your local Nursing Home Support Offices at https://www2.hse.ie/services/schemes-allowances/fair-deal-scheme/contact/ or contact the IFA Farm Family Committee at info@ifa.ie

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