Can I avoid selling my mother’s house when nursing home loan falls due?

I am looking for some information regarding the Fair Deal scheme. My mother, who is 91, is looked after by myself and my wife, who is her carer. She lives with us now. She has the family home which is willed to me when she dies. I am an only child. If she goes into a nursing home, is there any way of saving the family home re: payment.

Mr ES, email

The trade-off with Fair Deal is that the private nursing home resident has their care subsidised generally extensively subsidised – but that they pay what they can.

This is deemed by the rules to be 80 per cent of their income and 7.5 per cent of their assets each year. There are some exceptions on the income side and you are allowed €36,000 in savings before they assess assets. The assets obviously include the family home, which is for many their main asset.

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However, in relation to the family home, the contribution is capped at three years – ie 22.5 per cent of its market value. Until the rules changed recently, this cap was dependent on people not selling their home. So to cover the cost, people are allowed to provide for a nursing home loan under Fair Deal to cover the payments due on the home for those three years.

It’s a very good scheme and, without the subsidy and loan support, it is likely that most Irish people would not be able to afford private nursing home care and, in the absence of an alternative, would be left in the care of family members or friends long after the burden of such care became unreasonable.

But the money does have to be repaid. That doesn’t necessarily mean you have to sell your mother’s home when she dies. You can choose to pay the bill from other financial resources, or take a loan out from a bank or credit union to cover the cost. This is not necessarily practical for everyone, depending on their own age or income, but they are options.

And, of course, you don’t have to take the loan in the first place. You can choose to pay the money due against the family home from other sources, if available.

Expensive process

But the reason the loan is there is to provide financial support where other options are not available or people do not want to consider them. In that case, realistically, the property will have to be sold. You could rent it out – or move into it and rent out your own – using that money to pay the bill but interest does start kicking in a year after your mother’s death and it could become an expensive process.

You say your wife is your mother’s carer. Though it will not apply to you, it is worth mentioning for others that some carers who remain living in the nursing home patient’s family home after the patient enters nursing home care can seek a deferral of any repayment.

Again rules apply. First, they need to be in receipt of a social welfare carer’s payment, so the informal family arrangements that often exist will not suffice to qualify.

Other than that, the property must be their only residence, they must not own any other property, they must have lived in the home for no less than three years before the nursing home loan was taken out under Fair Deal. In those cases, the 12-month window for repaying the loan starts ticking when the carer dies – or six month after the house is sold, whichever is the sooner.

As your wife does have another residence and did not live in your mother’s house, she would not qualify under this arrangement.

So, for you, the bottom line is that you sell your mother’s home after she dies, or you raise the funds to meet the cost of repaying the loan some other way.