It's a Fair Deal
Brenda and Jane attended a Society of Financial Planners presentation recently where Patricia Mc Dermott, Senior Manager NHSS, delivered an insightful overview of the Nursing Homes Support Scheme 2009 (AKA the Fair Deal Scheme).
According to the Central Statistics Office our population is due to increase from €4.74m in 2016 to between €5.58m to €6.69m in 2051. More startling is the increase of 80 plus year olds from 147,800 to an estimated 535,900 – 549,000 over the same time period. This coupled with our increasing lifespan means that planning for our future has become more relevant now than ever before. With this in mind we thought it might be beneficial to outline some of the main considerations for anyone who is in need of nursing home care. For more detailed information please go to www.hse.ie/eng/services/list/4/olderpeople/ . The website is much improved and is easy to find your way around.
There are 3 parts to the process:
- The care needs assessment: this is carried out by a suitably qualified staff member to ascertain what level of care if at all is required by the individual. Existing support mechanisms are also considered in determining the most appropriate care package in the context of home care or a nursing home facility.
- State Support: The amount of support is based on the agreed cost of care less the client’s contribution (after allowable deductions as discussed below). A financial assessment is carried out to determine how much the client needs to personally pay towards the cost of their nursing home care.
- Ancillary State Support: This is referred to as the Nursing Home Loan. If the client requiring the nursing home has assets including land and property, they can apply for the loan and defer paying for their care until after their death, using the assets as security for the loan.
The amount you pay will depend on your income and your assets. Your home will be included in the financial assessment for the first three years only as is the case if you own a farm or business assuming you meet certain qualifying criteria. Effectively the more of each you have the more you pay towards your costs. For example you will pay the following subject to minimums:
|Income||80% of total income less deductions||40% of total income less deductions|
|Assets||7.5% of assets less €36,000 disregard||3.75% of assets less €72,000 disregard|
With regards who completes the application it can be either the individual in need of care or a specified person. Examples of a specified person include the person’s spouse, the committee where the person is a ward of court, a person with a registered power of attorney or a care representative.
With regards the repayment of the nursing home loan, once a relevant event occurs such as death of disposal of an asset, etc., HSE will write to the personal representative outlining the amount due and the options to defer. You can apply for one deferral subject to qualifying circumstances. Once the HSE inform revenue the representative has twelve months to repay the loan after which stage Revenue apply interest.
Finally the funding for the Fair Deal scheme is purely driven by Budget. The budget itself is decided on a weekly basis and the aim is for applications to be approved within a four week timeframe.
There were a number of tips that Patricia recommended based on her experience to date:
Tip: Apply for the fair deal and loan at the same time even if you don’t think you will need it as it ensures your loan and fair deal funding are approved at the same time without the need to go back again and apply for the loan.
Tip: Everyone should apply whether they need the financial support or not on the basis that the individual in need is on their system from the earliest date.
Tip: For individuals whose income is drawn from a post retirement pension fund, (ARF/AMRF’s), you should apply for a financial review each year. This is on the basis that the underlying value of the fund will change over time due to distributions, investment returns, etc. You should bear in mind that where your income or your assets increase you will pay more towards the cost of care however where it has reduced you will pay less.
Tip: If the person needing the care has mental capacity they must sign the application themselves.
Tip: Consider putting in place an enduring power of attorney now to prevent having to be made a ward of court at a future date which can be time consuming and upsetting for all involved.
Tip: You do not need a solicitor to appoint a care representative which can prove costly. Application forms can be accessed from www.courts.ie
Tip: Given there is only one option to defer, If the individual has a child with special needs, it is important to consider the most appropriate timing of any decision to defer.
As we are all living longer it is likely the shape of the state support for later life care will have many guises over the coming years. In the meantime the fair deal scheme can provide enormous comfort and relief to both the client and their family and is certainly, in our view, more preferable than the life loans available from some Financial Institutions.
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