Nursing Homes Support Scheme, a Fair Deal * Questions & Answers on the FAIR DEAL*

The Fair Deal- Nursing Home Support Scheme----Questions & Answers

THE FAIR Deal, or Nursing Home Support scheme, was finally introduced on October 27th 2009, replacing the old subvention scheme. While it was criticised by many for being less than fair, it is here to stay. In its first year €55 million was allocated to pay for nursing home care for 2009. The structure was that people would pay 80% of their pension or income and 5% of their assets for a maximum of three years. That was subsequently raised to 7.5% of assets from 25th July 2013. The scheme has been operating now for over 9 years and will receive a budget of €949.7m in 2018

Q What are the main differences between the old system and the Fair Deal?

A The Fair Deal scheme applies to both public and private long-term nursing home care, while the subvention scheme covered only private nursing home care. Under the subvention scheme, a person whose means exceeded a certain limit was effectively deemed ineligible for subvention. Of those who qualified for a subvention, the maximum basic rate was capped at €300 per week. Under the Fair Deal, each person’s contribution to care is worked out and the State then pays the difference between this and the cost of care.

Q How do you qualify for the Fair Deal?

A To be able to participate in the scheme, you must be ordinarily resident in the State and assessed as needing long-term nursing home care.

Q What is involved in applying for support?

A There are three steps involved in an application under the Fair Deal. Step 1 involves completing a care needs assessment to determine whether you need long-term nursing home care. Step 2 is a financial assessment to assess your contribution towards the cost of your care, and Step 3 involves the Nursing Home Loan.

Q What is involved in the means test?

A To determine how much the State needs to contribute towards the cost of your care, you will need to undergo a detailed financial assessment. If you are a member of a couple, the assessment will be based on half of the couple’s combined income and assets. In principle, you must contribute 80 per cent of your assessable income (which includes all earnings such as pension income, social welfare benefits/allowances, rental income, income from holding an office or directorship, income from fees and commissions) and 5 per cent of the value of any assets per annum, but there are deductions. First off, the first €36,000 of your assets, or €72,000 for a couple, will not be counted at all in the financial assessment. Moreover, there are other eligible deductions such as income tax, social insurance contributions and maintenance payments in respect of a child, spouse or former spouse. With regards to the asset contribution, your home will only be included in the financial assessment for the first three years of your time in care, under the 22.5 per cent or “three year” cap, regardless of the time you spend in nursing home care. The final amount repaid under the Nursing Home Loan scheme will only ever reflect the actual time spent in care. So, for example, if a person spent two years in care, the maximum contribution payable from their asset would be 15 per cent, rather than the 22.5 per cent (ie 7.5 per cent for each of the years spent in care). Therefore, the three-year rule does not apply. If you are unable to meet these costs, this contribution can also be deferred and collected from your estate, under the “Nursing Home Loan”. There are certain protections for farms and businesses, to ensure their sustainability. For example, a farm or business will only be taken into account within the financial assessment for three years under certain criteria, such as if the person suffers a sudden illness or disability. If you transfer income or assets now, and enter into a nursing home within the next five years, then these will still be taken into account in the financial assessment.

Q What is the Nursing Home Loan?

A Under subvention, a person’s principal residence was included in the financial assessment but there was no facility to defer contributions based on the residence, which meant that some people had to sell their family home to meet care costs. Under the Fair Deal however, if your assets include land and property, then you can defer the annual 7.5 per cent asset contribution (capped at three years for

the family home) based on these until after your death, at which time your property will be sold and the State repaid. If you decide to go down this route, you will need to have a charging order, a type of mortgage which secures the money loaned, registered against your assets. Once you die, the loan will become repayable to the Revenue Commissioners. But, while any part of the loan which was based on assets other than your home must be repaid within 12 months of the date of death, repayment of the part based on your home can be deferred. If, for example, your spouse or child is living in the house, then repayment can be deferred for the duration of the person’s lifetime. It should be noted that if the loan isn’t repaid within this time period, then an interest charge will apply. The rate of this interest will be levied at: the repayable amount X the number of days of delay X 0.0219 per cent. So, if a loan of €15,000 was not repaid until a year after the deadline, then an interest charge of €1,199 would apply. The Revenue also has discretionary powers under its care and management provisions which allow it to deal with any hardship cases which may arise.

Q How much will the Fair Deal cost patients?

A Under the scheme, an individual will contribute a maximum of 80 per cent of their income and 7.5 per cent of their assets, and the State will then meet the balance of the cost. Take the example of a person on full contributory state pension, who must contribute 80 per cent of this, or €198.64, to the State each week to pay for their care, leaving them with €49.66. In addition, the individual must make provision to contribute 7.5 per cent of their assets over the value of €36,000. If the only assets the person has is a house valued at €200,000, then the State will look for €12,300 a year for the first three years. If the person’s family can’t meet this contribution, but doesn’t wish the home to be sold, then the patient can sign up for a Nursing Home Loan. Under this scenario, the contribution is deferred, and the individual’s estate will repay the loan of €36,900 upon their death following the sale of the house. If there is an outstanding mortgage on a property, it is only the net value of the asset which is assessed, ie €150,000 if there is a €50,000 mortgage.

Q Will public patients pay more under the new system?

A Previously, patients in public long-term nursing homes had to pay long-stay charges for their care, which were charged at a maximum of €153.25 per week. While those currently in public care will not see their circumstances change, new applicants will have to pay more,

given that the charges under the Fair Deal encompass a levy on both income and assets.

Q Is there an upper limit on eligible incomes?

A While there are no thresholds or limits within the scheme, a person whose assessed income exceeds the cost of care, will not warrant financial support from the State.

Q If I avail of the Nursing Home Loan, am I prevented from selling my properties?

A No, you can still sell or transfer any land or properties, but the order on the asset means that the loan must be repaid. Moreover, if you don’t repay the loan within six months of the date of sale or transfer, then interest will be charged back to that date.

Q What if the patient doesn’t have mental capacity?

A If the individual applying for support under the Fair Deal is of diminished mental capacity, then a specified person, such as a person’s spouse or partner, or child over 18 years of age, can act on his/her behalf for Steps 1 and 2 of the application process. However, only a court-appointed care representative can act on the applicant’s behalf for Step 3, the Nursing Home Loan. In such cases, a specified person must apply to the County Registrar to become a care representative. Two reports from two separate registered medical practitioners are required as evidence that a person is of diminished mental capacity.

Q What happens if I apply but the funding allocated for the year has run out?

A The Fair Deal will have a certain sum allocated to it each year – for example in 2018 it is budgeted to receive €949.7 million – but once this runs out, there will be no further funding. So, if you apply late in the year you might find yourself waiting some time to get relief. According to the HSE, “while it is hoped that there would be sufficient funding to support everyone, there may be situations where a person’s name must go onto a waiting list until funding becomes available. If this is the case, the HSE will notify you when it writes to advise you whether you are eligible for State support”.

Q Does the Fair Deal cover all the costs of nursing home care?

A Under the HSE’s agreement with private nursing homes, it will pay for the costs of bed and board charges. However, additional expenses such as physiotherapy, incontinence wear, transport and specialised wheelchairs will not be covered by the scheme. According to the Department of Health, the majority of people in nursing home care hold a medical card, which should cover the cost of such services.

Q How will the scheme affect current residents of nursing homes?

A For individuals already in a private nursing home, they will be eligible for the new scheme provided their nursing home is approved for the purposes of the scheme. Furthermore, if they have been resident in the nursing home for three years or more, the financial assessment will be based only on income and assets other than the principal residence. As mentioned, while waiting lists may arise, anyone already in an approved nursing home at the date of commencement of the scheme will have State support paid from October 27th, regardless of when their application is processed.

Q Can the Government increase the contribution required from an individual?

A The contributions payable under the scheme can only be amended by way of primary legislation, which must be passed by both Houses of the Oireachtas and signed into law by the President. Nevertheless, before the scheme was even launched, An Bord Snip Nua proposed an increase in the percentage of care costs contributed by an individual from their residence. It suggested that the level be increased from 15 per cent to a maximum of 22.5 per cent over three years, which would result in annual savings to the Government of €50 million and as we know this increase was implemented on the 25th July 2013

12 thoughts on “Nursing Homes Support Scheme, a Fair Deal * Questions & Answers on the FAIR DEAL*

  1. If approval is granted for fair deal scheme can a person delay going into a nursing home until they absolutely have to even though they have been medically assessed as requiring residential care?

    1. Hi Marie
      Once the HSE Nursing Home Support Office has sent you notification of a release date for the funding, you will then have a certain time frame to avail of the offer. I would suggest that you seek further assistance from your local office.Generally if a Consultant Geriatrician or a medic completes the Care Needs Assessment that decides that the patient requires 24 hour nursing home support care in a nursing home, then the offer should generally be taken up as soon as the financial side of application come through

    1. Hi Ursula
      Thank you for your query/comment on the Fair Deal
      There are 4 Steps to the application process for the the Fair Deal and this is the link to the HSE which has all the information you need:
      Fair Deal Application Process
      The 3rd Step deals with “Financial Assessment and under this section the HSE will be looking for a details of your income & assets and If you have given any land, property or money to another person in the last 5 years, you will need to include this information when completing the application to the HSE. You will also need to tell them if you transfer any property, money or land after you make an application.

  2. My elderly parents , one of whom has dementia and could not live independently , wish to move into a sheltered housing apartment within the grounds of a HSE listed nursing home in advance of the spouse requiring full time nursing home care which likely will occur within one year.
    Are they entitled to apply for the Fair Deal scheme to assist with their costs ?
    They are entitled being full time resident in Ireland etc

    1. Hi Graham
      Thank you for your query concerning your elderly parents and their entitlement to the Fair Deal, and proposed move into sheltered housing apartment.
      Firstly you will need to check with the HSE to establish if the apartment within the grounds of a HSE nursing home qualifies for the Fair Deal.
      Our understanding on the Fair Deal or as it is known as the Nursing Homes Support Scheme is to provide financial support towards the cost of long term nursing home care.
      An application process is required and the following link should be helpful:

  3. My married father resides with my mother but does not own their house, he has a lifetime residency on the property. This came into effect in 1999. Will the property be considered his in calculating his fair deal contribution if he does not own it even though they are married?

    1. Hi Edel
      Here is the link to the HSE covering the Fair Deal application process
      Have a read through this it is very well explained. My understanding is that your father has only a life interest which was set up 20 years ago which is well outside the required legislation which states ‘’ any income or asset which is transferred within 5 years of applying for the scheme is taken into account in the financial assessment’’ . However I suggest you talk to the HSE for greater clarification. They have a very good Live Chat at the above link which is most helpful

  4. Hi we are in the middle of processing the fair deal scheme for our mother who has been in a nursing home the last year but we are just waiting on our court date in October.
    But recently she was diagnosed with terminal illness and wont last the month. We are just wondering how we stand do we still go to court for what will be owed or is the deal null and void now?

    1. Hi John
      Thank you for your query re your mother. Not sure why you are in the middle of processing the fair deal scheme as our understanding is that the Care Needs
      Assessment would have been carried out by healthcare staff e.g. Doctors, Nurses, Social Workers,to establish if an individual needs long-term nursing home care.If the Care Needs Assessment showed that your Mother needed long-term nursing home care, the Fair Deal Application Completed forms should have been returned to your HSE Nursing Homes Support Office, who also provide help to complete the application.The Financial Assessment works out the amount that the individual will pay towards the cost of their care and the amount that the HSE will pay. The amount that individuals pay for their care depends on their income and the value of their assets. People who have less income/assets pay less and people who have more income/assets pay more. No-one will pay more than the cost of their care. All this should have been processed before your mother went into a Nursing Home unless the allocated funds for the scheme had run out for that year. Our understanding is if she is deemed to have qualified for payment towards her nursing home fees,under the Fair Deal Scheme, you should be able to recoup what’s owed to her estate in the event of her demise

    1. Hi Gemma,
      Thank you for your query regarding the Fair Deal Scheme.

      The answer is simply yes as there are 3 steps in the application process and all applicants must complete Steps 1 and follows:

      Step 1 is an application for a Care Needs Assessment. This is to assess whether or not an individual needs long-term nursing home care, that is, whether they can be supported to continue living at home or whether long-term nursing home care is more appropriate.

      Step 2 is the Financial Assessment. The Financial Assessment looks at their income and assets to work out what your contribution to the cost of your care will be. The HSE will then pay the balance of your cost of care. This payment by the HSE is called State support.

      Step 3 is an optional application for the Nursing Home Loan. They can apply for this if they want to defer paying the part of their contribution that is based on their home or other property.

      Here is the link to the HSE covering the Fair Deal application process

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