My partner and I have had to cancel our wedding plans at the eleventh hour due to the impact the Fair Deal scheme would have on my home.
My partner is in his early 80s and I am in my late 60s. We do not live together and, while we had discussed marriage, we were happy as things stood. A diagnosis of Alzheimer’s has changed things and, wanting to spend as much time as possible together, we planned to marry.
Our civil wedding, booked for this month, had to be postponed when we made the unpalatable discovery that my house, which I bought in 2006, would be included in joint assets under the Fair Deal scheme when he needs nursing home care.
He owns no property, has no assets whatsoever and lives on the State pension plus a modest work pension. I accept that our pensions and savings would be jointly assessed to cover his contribution to nursing home care but baulk at the idea of my home being impacted.
On the Money: the personal finance newsletter from The Irish Times
ECB interest rate cut: What does it mean for mortgage borrowers on trackers, fixed and variable rates?
Mortgages: The five big mistakes to avoid as interest rates come down
ECB interest rate cut seems nailed on but what about the outlook?
Not only will I potentially need to avail of the scheme myself at some point in the future, but it will affect my children’s inheritance.
We have contacted Fair Deal directly who say there is no way around this, that one cannot protect an asset owned solely by one person.
It feels like I will be penalised for wanting to care for my partner for as long was I can and for us to enjoy our remaining time together before losing each other in the fog of his dementia.
We have spoken with a financial adviser and my solicitor, neither of whom can offer a solution.
The home is mortgage free and valued at approximately €400,000. I have looked at setting up a trust but found it daunting and wasn’t sure it applied anyway.
Ms P.W.
[ Home care for older people: How does it work and who pays?Opens in new window ]
I have to say I had never, until now, considered this scenario. But, having said that, I can understand the sense of it.
The Nursing Home Support Scheme (Fair Deal) looks at the family assets of an applicant – both income and assets. Where a single person applies, it is all very simple, but when the applicant – or the long-term nursing home resident on whose behalf an application is being made – is part of a couple, then the income and assets of both parties are assessed.
And it doesn’t matter who actually owns those assets. The test is blunt on that point.
You can see why, really. The Fair Deal scheme provides what can be a very significant subsidy to the cost of long-term care and the HSE has a duty to ensure that the resident’s contribution is forthcoming in line with the terms and conditions of the scheme.
You accept that your income (pensions) and savings should be jointly assessed, but not the house. This is illogical. Your savings presumably were not joint savings so, if you are not happy with the property being taken into consideration, why are you sanguine on the savings?
As it happens, if you do marry and your spouse requires care, the amount taken will be 40 per cent of family income and 3.75 per cent per year from assets over an exemption threshold of €72,000.
That does also apply to this property for the first three years of care, which means the HSE can have a lien on a maximum of 11.25 per cent of its value – presuming he lives for three or more years in care. Given your valuation of the home at €400,000 or thereabouts, that’s a contribution of €15,000 a year or a maximum of around €45,000 over the three years.
If you need nursing home care in the future, the maximum they can take against the property at that time is another 11.25 per cent, bringing it to the maximum of 22.5 per cent of the property value that would apply if you, as a single person, required nursing home care.
In that sense, it does not really affect the inheritance side of things – although clearly if you do not need nursing home care, it would be different. That’s a future none of us can predict.
Regardless, 77.5 per cent of the value of this property – around €310,000 at current values – is available for inheritance by your children if that is what you wish.
Transferring the home to family or elsewhere is also unlikely to work as there is a five-year clawback – ie, the HSE will consider anything transferred up to five years in advance of a Fair Deal application to still rank among the assessable assets – and I get the sense that you do not think you will have that time available.
And, as you say, you have consulted both a solicitor and a financial adviser and neither seems to think there is a way around the HSE position that the family assets of a married couple will be assessable, regardless of which spouse owns those assets and whether in one name or jointly.
If you really do wish to marry, then I think you should proceed as intended and accept the property will take a modest hit.
The alternative is to continue as you are now. As it stands, there is nothing to stop you spending your time together to allow you to care for your partner after the Alzheimer’s diagnosis.
Possibly more important, regardless of whether you marry or not – if it is still possible given the diagnosis – is putting in place an enduring power of attorney (EPA), presumably with you as the attorney, so that if your partner/spouse does require help with decisions on his personal care, you will have the authority to make those decisions with him, rather than someone else doing so.
You don’t mention whether your partner has children but, if he does, regardless of whether you are married or not, there could be issues with next of kin, and who has the authority to make decisions on his behalf if he is no longer in a position to do so.
An EPA addresses that, if, as I say, it is still possible to go down that route.
There are ongoing delays with organising enduring power of attorney through the Decision Support Service, as required, due to an ongoing dispute between the agency and solicitors who are a key part of the process, so I certainly would not delay in starting that application.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to dominic.coyle@irishtimes.com with a contact phone number. This column is a reader service and is not intended to replace professional advice
