If one spouse requires nursing home care and avails of the Fair Deal scheme and subsequently dies in the nursing home, is the living spouse expected to pay the Fair Deal scheme balance within one year of the death of their spouse and possibly lose their home in the subsequent sale?
S.D.
This, I think, is one of the things that concerns people most about Fair Deal but it shouldn’t.
Fair Deal is the financial support scheme provided by the State to allow people needing long-term nursing home care to get it regardless of their personal financial circumstances. In a State with very few State-operated nursing home beds, it was considered the only way to avoid a healthcare crisis for people who can no longer fend for themselves.
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The scheme is, broadly, very straightforward.
A person deemed in need of long-term nursing home care pays 80 per cent of their income towards that care in addition to 7.5 per cent of the value of their assets – such as savings or property – each year, regardless of what that sum is. The State pays the balance.
If the person is part of a couple, as in this case, those figures are halved, so 40 per cent of their income and 3.75 per cent of family assets.
If they have a big enough income that the figure exceeds the actual cost of care, they do not get Fair Deal but, with most nursing homes now charging well in excess of €1,000 a week, most people are covered.
The issue for most people is that their “assets” include their family home. And while their income is liquid and so, broadly, are any cash savings, funding the bill assessed against your home can be an issue.
There is a three-year cap on contributions from the home, but even so, for a couple like you, where one person is still living in the family home, that leaves you looking for a sum equal to 11.25 per cent of the market value of your home.
With the typical family home costing €387,000 across the State – and far more in many urban areas – that’s a bill for upward of €43,500. Most of us don’t have that sort of cash lying around. That’s where the nursing home loan comes into play.
The HSE will generally agree to forward fund this element of your nursing home contributions with what is called a nursing home loan. But, like all loans, this has to be repaid.
The headline rules attached to the loan state that it must be repaid within a year of the death of the nursing home resident, or within six months of the sale of the property if that happens while the resident is still alive.
If you fail to meet those repayment dates, interest is added to the loan, backdated to when the nursing home resident died or when the property was sold or transferred to another owner. That is applied by Revenue, at a rate of 0.0219 per cent per day, which amounts to about 8.3 per cent per annum.
For people who lived on their own before going into care, or who subsequently survived their spouse or partner, the home is empty and will generally be sold as part of the unwinding of their estate, freeing up the case to pay the loan which is managed by Revenue on behalf of the HSE.
But clearly, in this case, you are living in the property. And this is not a unique situation. Many nursing home residents would have a spouse still living at home. So you would expect that the scheme makes some provision for this. And it does.
A spouse or partner can apply for repayment of the loan to be deferred.
Certain other people can also apply for deferral on the basis that they live in the property. These “connected people” include, for instance, one of their children under the age of 21 or who are of very limited assets in their own right, a sibling of limited means, a relative living in a granny flat attached to the home or a carer.
Any connected person looking for deferral of a loan repayment must use the property as their main family home and own no other property or have no share in any other property. And they must have lived in the property for three years before the person went into nursing home care.
Those other conditions do not apply to you as a spouse. The bottom line is that you do not need to repay the loan while you are still living in the family home. And there is no financial penalty for failing to do so.
Essentially, the repayment clock is reset, with the loan now having to be repaid within a year of your death or six months of you selling or transferring ownership of the family home.
So there is no question of you being forced to sell your home, possibly leaving yourself homeless, just to meet the cost of your spouse’s nursing home care.
You need to make an application for deferral. It is not something that the HSE or Revenue will automatically understand is required. To do this, you need to contact the National Nursing Homes Support Office. A list of your local support office can be found here.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to [email protected] with a contact phone number. This column is a reader service and is not intended to replace professional advice
