Eolas Money: An Explanation of The Fair Deal Scheme

BRENDAN Reilly is a Certified Financial Planner and a co-director of Eolas Money, a financial planning practice based in Clonmel.

He recently outlined the mechanics of the Fair Deal Scheme on Newstalk Radio and he has summarised how the scheme works for this month's article.

What is the Fair Deal Scheme?
The Fair Deal Scheme (Nursing Home Support Scheme) is a scheme of financial support for people who require long-term nursing home care in Ireland. It is designed to give financial assistance to those who require full-time nursing care, regardless of their financial circumstances.

The Scheme is administered by the HSE on behalf of the Department of Health and eligibility is based on two assessments. 

*The first looks at the care needs of the older person, their capacity to live independently and at available supports at home and in the community.

*The second assessment looks at the financial resources (income, property, savings and
other assets) available to the older person.  

Under the Fair Deal Scheme, the applicant, or someone acting on their behalf, will make a financial contribution towards the cost of their care and, if the application is successful, the State will pay the balance to the selected HSE approved Nursing
Home. 

The amount of the financial contribution towards the weekly nursing home costs will depend on the applicant’s regular income and assets.

How do you apply?
Step 1 is an application for a Care Needs Assessment. This identifies whether or not the patient requires long term nursing home care. The Care Needs Assessment is carried out by HSE professionals who will need to meet and assess the applicant.

 Step 2 is an application for financial support from the State and where the Financial Assessment form is completed. The financial assessment is used to determine the contributions to the cost of care and to determine the level of State assistance, if any, that will be paid on the applicant’s behalf’s to the nursing home.

 Step 3 is an optional step if you wish to apply for the Nursing Home Loan (i.e. the ‘Ancillary State Support’) whereby you apply for additional assistance to enable you to pay your contribution in full at a future date. This is a form of loan
advanced to you and charged on your property assets in the State.

How does the financial assessment work?
The financial assessment mentioned above will determine what portion of the cost an individual pays. The financial assessment will look at the entire income of the individual or, if the individual is part of a couple, half of their combined income.

Up to 80% of the income for an individual, or 40% of the combined income for one half of a married couple, less certain deductions, e.g. for medical expenses, tax, will then be included as part of the calculation. Note that siblings, even if they live in the same household, are treated as separate individuals.

As part of the assessment process the individual is asked to list their assets, providing a valuation of each including property (home, property leased out, business premises, farm land etc.), cash (pensions, interest on bonds savings earned income).

Failure to list any asset may lead to extra charges being levied later or may delay the application process. 7.5% of the value of an individual’s assets, or 3.75% for one half of a married couple, will then be included in the calculation.

However, an individual is allowed €36,000 and a couple are allowed €72,000 in savings, which are not assessed.

How does the Nursing Home Loan (ancillary state support) work?

With the nursing home loan, a person can delay paying for their care until after death using their assets to secure the loan. The nursing home loan is an option if you:
 Need nursing home care,
 Have assets including land and property,

The amount you receive will depend on the value of your property and the loan is repayable when:
 You pass away – it will be repaid from your estate.
 You sell or transfer the property (HSE must be notified within 10 working days of transfer/sale).
 You or your partner are made bankrupt
 The HSE determines that it has been given false/misleading information relating to the loan application.

Interest is applied for availing of the loan and the interest is linked to the annual increase/decrease in the consumer price inflation (CPI) which is applied to the loan and is collected when the loan is repaid.

What’s different about the value of your home, or certain farms and businesses?

There is a 3 year cap or limit on how much you pay towards the cost of a nursing home based on the value of certain assets.

These are your home, proceeds from the sale of your home and tour farm or business, (once you meet certain qualifying criteria). You only contribute 7.5% of the value of these assets for a maximum of 3 years, irrespective of how long you remain in care.

What exactly does the Fair Deal cover?

The Fair Deal covers the level of care appropriate to the individual as well as bed, board and a laundry service.  It also covers certain therapeutic activities and some aids and appliances needed to assist with the activities of daily living.  If a person has a medical card this should cover the cost of aids and appliances as well as medical care such as GP charges and medication.

If the older person does not have a medical card their medical costs must be covered by the individual or their family. Often the nursing home will invoice the family or representative of the resident.

What is not covered?

The Fair Deal scheme does not cover:
 Short-term care such as respite, convalescent or day-care.
 Extra fees charged by the nursing home for services like hairdressing, therapies or activities.

How Eolas Money Can Help:
We understand how sensitive and difficult a time it is for families when considering long-term residential care for themselves or a loved one. Naturally, the financial impact of any such decision, including the benefits or otherwise of participation in the Fair Deal Scheme, gives rise to many questions. If you would like our help in answering any of these questions, contact Eolas Money by emailing queries@eolasmoney.ie or visiting eolasmoney.ie.

This article is provided for general information purposes only and does not amount to financial advice. While every care has been taken in the preparation of the information, we advise you seek professional advice before making any personal financial planning decision. Eolas Money Management Limited, T/A Eolas Money is regulated by the Central Bank of Ireland.

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