Over a year ago I was involved in setting up the Fair Deal for a lady with dementia, who is at present in a nursing home and happy.
At the time we looked at her finances and it seemed that she would be okay with her pension and some savings. As she was living with her brother in the home place, I thought it was better not to apply for the nursing home loan. To date that is the way it is.
If one does not apply for the nursing home loan, will there still be a charge when the lady dies and the brother also and the home is sold? Logically it appeared to me that one would only have to repay the loan if you took one out. Perhaps I am not clear — could you clarify for me?
Ms D.McE.
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Your point in the first sentence is well made. We talk regularly about the financial arrangements around nursing home care and may, at times, lose sight of the people involved. The woman who has dementia is happy in her new home and that is the most important thing for her and, I imagine, for her family.
And for your peace of mind, I can reassure you that if you never take out a loan, then you never have a loan to repay — on this woman’s death or otherwise. Fair Deal and the nursing home loan are associated but independent of each other. There is only an obligation to pay money on this woman’s death if a loan was taken out to cover the cost of the care.
However, I am a little puzzled. You say you set up Fair Deal for this woman but also that, regarding her finances, she would be okay on the basis of her pension and some savings.
I clearly have no sense of whether this is a State pension or a more generous private pension, nor of the scale of her savings. However, the current rates agreed between the HSE and private nursing homes amount to between €900 and €1,300 a week depending on where in the State she is staying. And my experience, certainly in Dublin, is that homes will charge an additional weekly amount above this to private residents, so you could be talking of up to €1,500 a week.
And that is just for basic care. Any “extras” such as social engagements, hairdressing, medical transport, dressings etc generally come on top of that, to say nothing about having the few bob for the odd treat.
Now, if this woman can cover that cost, that’s fine. If she can meet it, neither the nursing home nor anyone else has any right to anything from any other assets.
But there are not many pensioners who can afford that — and I would suspect none whose income is just the State pension.
That is why it is always worth going through the Fair Deal financial assessment. In this, you put down all sources of income, together with details of savings and the value of assets, including the family home. If, having looked at that, the HSE decides that charging you 80 per cent of your income and 7.5 per cent of your assets will cost you more than the private weekly cost of care, they are obliged to inform you that Fair Deal is not suitable for you.
Paying for care through Fair Deal makes financial sense only where it will cost this woman less than going private entirely – and that includes any “deferred charge” on her home.
Getting back to your phrase that you “set up Fair Deal” for this woman, that leads me to suspect you maybe did sign up for Fair Deal on her behalf.
If that is so, the HSE is entitled to 80 per cent of her income and 7.5 per cent of her assets every year – including her family home, although it is limited to three years on the family home and if the property is owned with her brother, the lien on the family home is just 3.75 per cent a year for three years, or 11.25 per cent of its value. If it is her home and the brother is merely staying there, the charge is 7.5 per cent a year to a maximum of 22.5 per cent (three years).
In they are joint owners, the money will fall due not when she dies, but when her brother dies or sells the house, whichever happens sooner. If she is the owner, what happens depends on the brother’s status, assets and whether he is in receipt of certain welfare payments; the house may have to be sold within a year to repay any loan or the repayment may be deferred as above.
So, to recap, if she did not sign up for Fair Deal and is paying her private weekly charge, there is no loan and no one can come looking for anything when she dies. If she is on Fair Deal and is not otherwise paying for the amount due against her home’s value for the first three years, then she is taking out a loan and it will be payable when she dies — within a year or, depending on his status, when her brother dies or sells up.
- 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. This column is a reader service and is not intended to replace professional advice
