23 Nov Fair Deal or not Fair Deal, that is the question.

I get asked about the Fair Deal Scheme regularly, and since February this year coinciding with Covid-19 pandemic enquiries have increased. The query generally comes from two sources. The most common query comes from retirees taking control of their own financial affairs and sharing with me their concerns for their financial future. Invariably, the individuals’ long term care needs comes up, and when it does the Fair Deal Scheme gets a mention in the form of the question, “would I qualify …………..” and so on. The second source of the same question generally comes from a son or daughter who is looking out for their parent(s). Very often, the concerned son or daughter will have some knowledge only of their parents financial affairs and at times like this, I always raise the matter of the importance of an enduring power of attorney, something I have written about in previous posts.

The following is a high level summary of the salient points about the Fair Deal Scheme and there is much more reading on the subject at links below. For this post, the Fair Deal Scheme represents a Nursing Homes Support Scheme which provides financial assistance for individuals who need long-term nursing home care.  An individual’s contribution is based on their means, and the State, through the HSE, (subject to individual qualifying) pays the balance of the costs in public, private and voluntary nursing homes approved under the scheme.

There are four steps to the application process:-

• Application Form https://www2.hse.ie/services/fair-deal-scheme/fair-deal-application-process.html#Complete-the-application-form
• Care needs assessment – Following receipt of your completed application form, the HSE will arrange a Care Needs Assessment in order to establish your need for nursing home care
• Financial Assessment – The financial assessment will work out how much you need to pay towards nursing home care and you must provide proof of income, assets and expenses with your application
• Apply for optional Nursing Home Loan – If you feel that the amount calculated by the HSE as being your contribution to the cost of care is unaffordable, then there is an option to apply for a nursing home loan under the scheme.  Applying for this loan is optional and it is available to anyone who owns a property in Ireland.  With a nursing home loan you can delay paying for care until after death using these assets to support the loan.  The loan can be applied for as part of your Fair Deal application.

Anyone who is ordinarily resident in the State and needs long-term nursing home care can apply for the scheme, with the third step – Financial Assessment – confirming whether you qualify financially for the scheme.  As part of the Financial Assessment the HSE will calculate how much you pay towards the cost of nursing home care – the amount depends on your income and assets – the more you have effectively the more you pay – and this is not affected by the nursing home fees.  Therefore, the amount the nursing home charges in fees does not matter, your contribution will be set, and once you qualify, the HSE will pay any balance if required.

Contributions are based on all of the following:-

• 80% (40% if you are part of a couple) based on your income
• 7.5% (3.75% if you are part of a couple) of your cash assets such as savings, stocks, shares
• 7.5% (3.75% if you are part of a couple) of your assets such as land or property

The first €36,000 (€72,000 if you are part of a couple) is excluded from the assessment. This is excluded firstly from your cash assets and then any remainder from your non-cash assets.  Your home will only be included in the financial assessment for a period of 3 years. A couple will not pay more than 22.5% of the value of your home.

You should seek advice from your accountant or financial advisor and the following HSE link contains all the information on the Fair Deal Scheme – https://www2.hse.ie/services/fair-deal-scheme/about-the-fair-deal-scheme.html