My father is in a nursing home and we are working our way through a Fair Deal application. What I am trying to understand is how Fair Deal affects the home. I know that the contribution from the home is only for three years but is the amount capped at the start when he qualifies for Fair Deal or against the value of the house when it is eventually sold?
Fair Deal is a great system that opens the door to private nursing care for many people. It’s not perfect but it is much better than the financially ruinous alternative for a lot of families given the escalating cost of such care.
Naturally, given the level of subsidy involved, it is important that the HSE can secure what is considered a reasonable contribution from the person going into care. In general terms, this amounts to 80 per cent of their income, 7.5 per cent every year on the value of their assets over €36,000 and, for the first three years of care, 7.5 per cent of the value of the home. Where the person in care is one of a couple, the contribution percentages are halved to 40 per cent and 3.75 per cent respectively and the exempt savings threshold doubles to €72,000.
As part of Fair Deal, you need to provide a valuation of the home, carried out by a professional valuer. In a rising property market, however, the concern is whether this assessment will still be valid when it comes to repaying any nursing home loan typically taken out as part of Fair deal to cover the money owing against the family home.
It’s an issue that has cropped so I asked the HSE what happens when the nursing home resident dies and the family is having to settle any outstanding Fair Deal debt. Specifically, does the HSE (or Revenue which acts as a collector on the HSE’s behalf) adjust the 7.5 per cent annually contribution up to a maximum of three years to the market value of the property at the time it is disposed of, or does it remain tied to the original Fair Deal valuation?
Their answer seems quite categoric: “The assessment for a family home is based on the valuation of the asset at the date the application for up to three years in care.”
So it is the valuation at the time the Fair Deal support is approved that counts, not what happens between then and the time the person dies, or the house is otherwise sold. Of course, that also means there will be no downwards revaluation in the event of a fall in the property market.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to firstname.lastname@example.org. This column is a reader service and is not intended to replace professional advice