THE COST OF GROWING OLD
Q. My mother is likely to need nursing home care before the end of the year. My father passed away a few years ago. As a family, we don’t have much savings in place to cover the cost of nursing home care so we are considering going for the Fair Deal scheme. My mother’s only asset of any value is the family home – and so it is this which she is considering using to fund the cost of nursing home care. I understand that if you spend more than three years in a home, no more than 22.5 per cent of the value of your family home can be used to pay for your care. Is that right? And if my mother dies within three years of entering the home, will the full 22.5pc of the value of the family home be used to fund the cost of nursing home care – or will the percentage of the value of the home that is used to fund the cost of the care be based simply on the length of time that she was in the home?
A. The Nursing Homes Support Scheme, also known as the Fair Deal, provides financial support to people who need long-term nursing home care. The scheme is operated by the Health Service Executive Scheme (HSE) and under last October’s Budget the scheme will receive €940m funding, up from €874m last year, with target waiting times for individual’s approval of no more than four weeks.
Under this scheme, you make a contribution towards the cost of your care and the State pays the balance. The scheme covers approved private nursing homes, voluntary nursing homes and public nursing homes. The contributions that an individual availing of the Fair Deal scheme must make are as follows:
- 80% of their income, less certain deductions
- 7.5% of the value of any assets each year with the first €36,000 of asset value disregarded in calculating what is due.
If there is a family home included in the assets it will only be included in the financial assessment for the first 3 years of your time in care. This is known as the 22.5% or “3 year cap”. It means that you will pay a 7.5% contribution based on your principal residence for a maximum of 3 years regardless of the length of time you spend in nursing home care. In other words, the individual’s contribution to the cost of their care is limited to the time they receive this care. With the likelihood of an increase in the inheritance threshold from parent to child ( The UK allows an additional equivalent of c. € 120K – currently £325,000 in total ) I would recommend taking professional advice before giving your assets to loved ones.