What is the Fair Deal scheme?
The Fair Deal scheme is a Nursing Home Support Scheme (NHSS) delivering financial support for people who need long-term nursing home care. Under the scheme, once approved, you will make a contribution towards the cost of your care and the State will pay the balance. All nursing homes are included, such as public, private and voluntary.
How do I apply for NHSS?
There are three steps to the application process:
(1) Care needs assessment: to access whether long-term nursing home care is the right option. This is carried out by healthcare professionals appointed by the HSE.
(2) Financial assessment: looks at the assets and income available to assess what your individual contribution to the cost of care will be. The HSE will then pay the balance. This will be carried out on behalf of the HSE.
(3) Nursing home loan: this is applicable in cases where you wish to defer paying the part of your contribution that is based on your home or other property. Interest is not charged on these loans if paid within 12 months of the death of person in care. The consumer price index is applied to the amount due.
Financial assessment
This involves looking at all the assets and income available to assess your contribution to the cost of care. For example, if the cost of your care is €1,000 per week and your assessed weekly contribution is €400, the HSE will pay the balance of €600 (State support).
Currently, you will contribute:
• 80% of your income (less certain deductions).
• 7.5% of the value of any assets per year (this may be deferred and collected from your estate after death – the nursing home loan element mentioned above).
The first €36,000 of your assets, or €72,000 if a couple, will be excluded in the financial assessment. Your private dwelling house (PDH) will only be included in this calculation for the first three years of your time in care. This is known as the 22.5% or three-year cap.
This means you will pay a 7.5% contribution based on your PDH for a maximum of three years regardless of the time spent in nursing home care. This cap applies regardless of whether you choose to opt for the nursing home loan or not. All other assets will be taken into account for as long as you are in care.
Current Fair Deal scheme versus proposed reform of Fair Deal scheme
The current system requires farm families and small business owners to set aside 7.5% of the value of their land annually to fund a place in a nursing home and there is no cap on contributions. The change being proposed is to cap contributions for farmers so that everyone pays their fair share.
There is provision in the current scheme to confine the farm value in the financial assessment to three years for farmers or their spouse in cases where a sudden illness or disability occurs. Events where there wasn’t sufficient time to put succession arrangements in place and where the successor continues to run the farm.
In 2018, the Government approved a change (awaiting to be implemented) to the scheme whereby a three-year cap would apply on farm assets in the means test assessment. This cap, similar to the cap currently applicable to the PDH, is subject to a family successor continuing to operate the farm for a six-year period. This will exclude people with farms rented out.
Updates
According to the Junior Minister for Older People, Mary Butler, this reform is in the programme for Government and she would be moving the legislation in the first quarter of 2021. She stated she also wants to give people the option of choosing between nursing homes and their own home in their later years.
An Tánaiste Leo Varadkar has stated this is a priority of his. However, Tom Murray of fairdealadvice.ie confirms there has been no progress on this reform so far.
Tadhg Daly, CEO Nursing Homes Ireland, confirmed: “The bill has been drawn up but currently nothing has changed. Its status quo for now.” He wasn’t aware of the reasons why this reform has been delayed.
In the meantime, farm families are still waiting.
Case study: financial assessment of a farmer
John, a married beef farmer, is 72-years-old, and owns 70 acres valued at €70k. His private dwelling house (PDH) is valued at €100k. Both John and his wife have state pensions of €25,823 in total. John’s wife needs nursing home care.
Assessment of assets
Land: €700,000
PDH: €100,000 (this will only be included for the first three years)
Total assets: €800,000
Less exempted amount: €72,000 (the first €36,000 of your assets not counted x2).
Assessable assets: €728,000
7.5% assessed asset yield: €54,600 (€728,000 @ 7.5%)
Assessment of income
Contributory pensions: €25,823
Total assessable income (@80%): €20,658
Combined assessment income/assets: €75,258 (€54,600 plus €20,658)
Assessed income for one spouse @ 50%: €37,629
Based on the above and if nursing home care costs €1,000 per week, the Fair Deal Scheme would contribute €276 per week.
Read more
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What is the Fair Deal scheme?
The Fair Deal scheme is a Nursing Home Support Scheme (NHSS) delivering financial support for people who need long-term nursing home care. Under the scheme, once approved, you will make a contribution towards the cost of your care and the State will pay the balance. All nursing homes are included, such as public, private and voluntary.
How do I apply for NHSS?
There are three steps to the application process:
(1) Care needs assessment: to access whether long-term nursing home care is the right option. This is carried out by healthcare professionals appointed by the HSE.
(2) Financial assessment: looks at the assets and income available to assess what your individual contribution to the cost of care will be. The HSE will then pay the balance. This will be carried out on behalf of the HSE.
(3) Nursing home loan: this is applicable in cases where you wish to defer paying the part of your contribution that is based on your home or other property. Interest is not charged on these loans if paid within 12 months of the death of person in care. The consumer price index is applied to the amount due.
Financial assessment
This involves looking at all the assets and income available to assess your contribution to the cost of care. For example, if the cost of your care is €1,000 per week and your assessed weekly contribution is €400, the HSE will pay the balance of €600 (State support).
Currently, you will contribute:
• 80% of your income (less certain deductions).
• 7.5% of the value of any assets per year (this may be deferred and collected from your estate after death – the nursing home loan element mentioned above).
The first €36,000 of your assets, or €72,000 if a couple, will be excluded in the financial assessment. Your private dwelling house (PDH) will only be included in this calculation for the first three years of your time in care. This is known as the 22.5% or three-year cap.
This means you will pay a 7.5% contribution based on your PDH for a maximum of three years regardless of the time spent in nursing home care. This cap applies regardless of whether you choose to opt for the nursing home loan or not. All other assets will be taken into account for as long as you are in care.
Current Fair Deal scheme versus proposed reform of Fair Deal scheme
The current system requires farm families and small business owners to set aside 7.5% of the value of their land annually to fund a place in a nursing home and there is no cap on contributions. The change being proposed is to cap contributions for farmers so that everyone pays their fair share.
There is provision in the current scheme to confine the farm value in the financial assessment to three years for farmers or their spouse in cases where a sudden illness or disability occurs. Events where there wasn’t sufficient time to put succession arrangements in place and where the successor continues to run the farm.
In 2018, the Government approved a change (awaiting to be implemented) to the scheme whereby a three-year cap would apply on farm assets in the means test assessment. This cap, similar to the cap currently applicable to the PDH, is subject to a family successor continuing to operate the farm for a six-year period. This will exclude people with farms rented out.
Updates
According to the Junior Minister for Older People, Mary Butler, this reform is in the programme for Government and she would be moving the legislation in the first quarter of 2021. She stated she also wants to give people the option of choosing between nursing homes and their own home in their later years.
An Tánaiste Leo Varadkar has stated this is a priority of his. However, Tom Murray of fairdealadvice.ie confirms there has been no progress on this reform so far.
Tadhg Daly, CEO Nursing Homes Ireland, confirmed: “The bill has been drawn up but currently nothing has changed. Its status quo for now.” He wasn’t aware of the reasons why this reform has been delayed.
In the meantime, farm families are still waiting.
Case study: financial assessment of a farmer
John, a married beef farmer, is 72-years-old, and owns 70 acres valued at €70k. His private dwelling house (PDH) is valued at €100k. Both John and his wife have state pensions of €25,823 in total. John’s wife needs nursing home care.
Assessment of assets
Land: €700,000
PDH: €100,000 (this will only be included for the first three years)
Total assets: €800,000
Less exempted amount: €72,000 (the first €36,000 of your assets not counted x2).
Assessable assets: €728,000
7.5% assessed asset yield: €54,600 (€728,000 @ 7.5%)
Assessment of income
Contributory pensions: €25,823
Total assessable income (@80%): €20,658
Combined assessment income/assets: €75,258 (€54,600 plus €20,658)
Assessed income for one spouse @ 50%: €37,629
Based on the above and if nursing home care costs €1,000 per week, the Fair Deal Scheme would contribute €276 per week.
Read more
Money Mentor: what are the implications of signing personal guarantees
Assessing risk and farmers’ attitude to risk
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