How can I make the Fair Deal application process work for my family?

Tom

Your father’s transition to a nursing home marks an important chapter in his life and for your family. This change often brings with it practical and financial considerations and understanding how the Fair Deal Scheme works can make the process more manageable. 

You’ve a lot of questions — and it can be complicated — so don’t worry, feeling a little overwhelmed is completely normal. In fact, I know lots of people around the country will understand what you’re going through.

So I’m going to try and break it down step by step, focusing on the scheme itself, how contributions are calculated, and the decisions you may face about his home.

What is the Fair Deal Scheme?

The Fair Deal Scheme, officially called the Nursing Homes Support Scheme, helps make long-term nursing home care more affordable. It ensures your father contributes to the cost of his care based on his financial means, while the HSE covers the remainder.

Here’s how it works:

Your father’s income and assets are assessed to determine his contribution.

The HSE pays the balance of the nursing home fees directly to the facility. This shared approach helps protect family finances while ensuring your father receives the care he needs.

How much will he need to contribute?

The contribution calculation includes:

1. Income

Your father will contribute 80% of his annual income, such as his pension or other earnings.

2. Assets

He will pay 7.5% of the value of his assets annually. These include property, savings, and other investments.

The three-year cap applies to the family home. This means that after three years in the nursing home, the house will no longer be included in the calculation.

The first €36,000 of your father’s assets are exempt from assessment.

For example:

If your father has €30,000 in income, he would contribute €24,000 annually.

If his house is valued at €250,000, the annual contribution would be €18,750 for the first three years only.

Why does the house need to be valued?

As part of the Fair Deal application, the HSE requires a professional valuation of your father’s home to assess its value. This valuation should reflect what the property would realistically sell for in today’s market.

Estate agents typically consider factors like:

• Location and size of property;
• Current market conditions and comparable sales in the area;
• The property’s condition and features.

What if you decide to sell the house?

Selling the house is a viable option, and many families consider this to fund care or simplify the financial situation. Here’s what to keep in mind:

• Proceeds and the Fair Deal Scheme — If you sell the house, the proceeds replace its value in the Fair Deal assessment. However, the three-year cap still applies, so only three years’ worth of contributions will be deducted from the sale proceeds;
• Nursing Home Loan — If your father has opted for the Nursing Home Loan (more on this below), the loan will need to be repaid within six months of the house being sold;
• Reassessment of Financial Contribution — The HSE will reassess your father’s financial situation after the sale. It’s important to inform the Fair Deal office of any significant changes in assets.

Can the house be rented instead of sold?

Recent changes to the Fair Deal Scheme have made renting a property more appealing. Since February 2024, families under the scheme can keep 100% of the rental income without it affecting the contribution assessment. Renting could provide a steady source of income while retaining the family home. This option may be worth considering if selling isn’t an immediate priority.

What is the Nursing Home Loan?

The Nursing Home Loan is an optional part of the Fair Deal Scheme that allows families to defer paying the property-based contribution.

Here’s how it works:

The HSE temporarily covers the property contribution.

The loan is repaid later, typically from the estate after your father’s passing.

To apply, your father (and spouse/partner, if applicable) must agree to a charging order being placed on the property. This ensures the State can recover the loan amount from the estate.

This option provides flexibility, particularly if you’re unsure about selling or renting the house right away.

Next steps to consider Here’s a clear plan to help you move forward:

• Value the property — Arrange for a valuation of your father’s home. This is a crucial step for the Fair Deal application. You can get a list of local registered valuers on the SCSI website;
• Explore financial options — Decide whether selling, renting, or opting for the Nursing Home Loan best suits your family’s needs and circumstances;
• Complete the Fair Deal application — Work with the Fair Deal office to provide all required financial details and documents. They will guide you through the process;
• Consider professional advice — If you’re unsure about the financial or legal implications, consulting with a solicitor or tax adviser can provide clarity.

Your father’s move to a nursing home involves many decisions, but understanding the Fair Deal Scheme and your options can help ease the process. By taking these steps, you’ll ensure he receives the care he needs while making the most practical decisions for your family’s financial future. 

Of course, the run-up to the move and the move to the nursing home itself will bring its own challenges for your father — and indeed for your family as a whole.

The fact we’re approaching Christmas adds another layer of poignancy to your father’s move. I would suggest you try and get as much work as possible done on this in the next few day and then focus on fully enjoying the festive season at home with your dad. You can pick it up again in early January. 

Armed with the right information, you and your family will be well placed to make informed decisions and to make the Fair Deal Scheme work best for you. If you have any brothers and sisters, it would be a good idea to enlist their support and spread the workload. This will enable you all to focus more on supporting your father in his next chapter.

• Majella Galvin is chair of the Membership and Public Affairs Committee of the Society of Chartered Surveyors Ireland. A chartered surveyor, estate agent and registered valuer at DNG Galvin auctioneers Bandon, she has been working in the property sector for over a decade — www.dnggalvin.ie
• If you have a property related query or issue you would like to raise with Majella, please email irishexaminerpropertyqueries@scsi.ie