Money Guide Ireland

A new scheme is going to be introduced in Autumn of 2009 to help with the payment of nursing home fees in Ireland.  The new Nursing Homes Support Scheme is being called a “Fair Deal” by the  Department of Health and Children. The new regulations became law from July 1st 2009  – but have not actually been put into effect yet. People already in Public nursing homes and getting help with fees under the old scheme will not be affected.
Existing residents of private homes can apply for help under the new scheme – even if they were previously getting subvention.

In summary – the new rules will replace the old “subvention” scheme and  will  assist in the payment of charges for both Private and HSE (Public) Nursing Homes.

Nursing homes will have to register to be part of this Fair Deal scheme – and they will have to agree prices with the National Treatment Purchase Fund.
A resident paying nursing home fees will have to  contribute annually – 80% of their “assessable”  income and 5% of the value of any assets in excess of €36000 . (72000 for a couple)
If the assets include land and property, the 5% contribution based on those assets can be deferred until after death – and may be collected from the person’s estate.

A principal residence (your home) will only be included as assets for the first 3 years of the time in the care home. So in effect -  the maximum deferred payment based on the main home will be 15% of it’s value. (No matter how long a person remains in care).
For a couple where only one is in a care home -, this means that the deferred contribution based on the principal residence will be capped at 7.5%
If there is a partner still  living in the home, the deferred charge may be further deferred for their lifetime too.

Example of Calculation

A married couple living in a house which they jointly own.
The wife needs full-time nursing home care. They have a combined income of €500 per week. Their house is valued at €400,000. Under the new scheme, the wife will only have to pay €200 a week towards her cost of care. This is because half of the couple’s income is €250 and 80% of this is €200. The HSE will pay the balance of the nursing home costs.
A deferred contribution of €157.70 per week, for a maximum of three years, is also payable from the estate after the death of both of the couple. This is calculated as follows:
Value of house: €400,000
Less the Asset disregard for couple: € 72,000
Remaining Value: €328,000
50% of remaining value : €164,000
5% of 164,000 per annum: € 8,200
Divide by 52 to get weekly amount: € 157.70

If  the wife  is still in a nursing home after three years, the principal residence would no longer be used in the financial assessment. (Total deferred payment capped at €8200 in this example).

The three year cap will also extend to farms and business in certain circumstances.

(i) Where the person has suffered a sudden illness or disability which causes them to require long-term residential care, and
(ii) where the person or their partner was actively engaged in the daily management of the farm or relevant business, as the case may be, up until the time of the sudden illness or disability, and
(iii) here a family successor certifies that he or she will continue the management of the farm or relevant business as the case may be.
This measure is intended to ensure the financial sustainability of family farms and businesses in cases where a person suffered a sudden illness and did not have an opportunity to put appropriate succession arrangements in place.
In the case of couples, the measure should apply where the applicant suffered a sudden and unforeseen illness and either or both members of the couple have been engaged in the running of the family farm or business.

The HSE have an infoline on 1850 24 1850.
More Info Here
The old scheme had a maximum payment of €300 a week and anyone with total assets of over €36000 were not eligible for any help at all.

Comment:
At first glance this scheme seems to be a good idea . It probably now means that more wealthy people will be getting assistance. It probably also means that more taxpayers money will be going into the pockets of private nursing home owners in the future.

It  will be interesting to see what kind of pricing agreements are made with the nursing homes. Will homes put prices up – or will some kind of cap on prices be introduced?
If there is no limit on what homes can charge there will be waiting lists for the best, more expensive homes. Potential residents and their relatives will be shopping around for the best care home that the Support Scheme can afford.

Hopefully the inspection regime of nursing homes will be better than it has been in the past – and hopefully homes that are not up to scratch will not be allowed to participate in this scheme.

The latest Budget in Ireland announced that the short lived “Early Childcare Supplement”  is to be halved from  May 2009  and abolished from 31 December 2009.

It is going to be replaced in January 2010 with a pre-school Early Childhood and Education Scheme (ECCE) for all children between the ages of 3 years 3 months and 4 years 6 months.

Children enrolled in playschools will receive free pre-school provision of 3 hours per day, 5 days each week over a 38 week year. The pre-school providers will get a  weekly capitation  of €64.50 per child and parents  will not be charged.

Children enrolled in full- or part-time childcare services will receive free pre-school provision of 2 hours and 15 minutes per day, five days a week over a 50 week period. This equates to a weekly capitation grant to the service of €48.50, with parents paying for their childcare net of this amount.

All community and private pre-school services, which meet the requirements of the scheme, will be invited to apply for entry to the scheme and all notified pre-school services will be contacted by the Office of the Minister for Children and Youth Affairs (OMCYA) by the end of May, 2009. To introduce the scheme as quickly as possible and maximise the number of children and their parents who will benefit from the outset, the Minister said he did not propose to wait until the school year beginning September 2010 but would introduce the scheme from January 2010. From September 2010, the pre-school year will run from September of each year in line with the school year.

All children aged between 3 years 3 months and 4 years 6 months at September 1st each year, will be eligible and parents who wish to avail of the scheme can enrol their children with the available participating service of their choice. Children entering the scheme in January 2010 will be eligible, if they are aged between 3 years and 7 months and 4 years and 10 months at 1 January 2010 (children born between March 1st, 2005 and June 1st, 2006). Parents should have regard to the enrolment policies of their local primary schools in making decisions regarding the age that their children should avail of the pre-school year.

The creation of NAMA was first announced in the April 2009 Irish Budget.
What is this NAMA and what will it do?
The Government line is that NAMA is firstly an asset management company dealing with assets tansferred from banks. NAMA will not be a bank as it will not be taking deposits from the public and will not have a banking licence. NAMA will have loans on its books based on real physical assets, and while some of these will undoubtedly be of better quality than others, they will be a mix of ‘good or performing loans’ and ‘bad or non performing loans’.

The idea is that the NAMA will buy all of the land and property development loans of the six Irish banks of covered by the State guarantee. This means the total potential  value of the loans which will be taken on by NAMA  will be between €80 billion and €90 billion.By taking problem property loans off the hands of the banks, the Government hopes to put those institutions in a position where they can resume lending.
NAMA will probably become the biggest landowner in Ireland. Developers might not yet realise it – but every single land and investment property they own which has outstanding debt could end up in the new National Asset Management Agency

Even if these debts are bought by Nama at two-thirds of their face value – the bill could  be in the region of  €60 billion. ( Ireland’s national debt is currently €54 billion)
It could be 12 to 18 months before NAMA gets going properly. It may need to exist for another 10 to 15 years  – it is  no short-term fix.
Where will the employees will come from, what big shiny office will NAMA  rent?

Is this just a bail out for the developers that the taxpayer and bank shareholders will end up funding? Or is it a viable option that will help get the financial mess sorted. Only time will tell…. if we are all still living here by then and haven’t emigrated!

How To Get a Job in NAMA

The new Income levy rates from May 1st 2009 are as follows: (As per April Budget)

• 2% on income up to €75,036
• 4% on income from €75,037 to €174,980
• 6% on income above €174,980

If your income is  180000 – you do not pay 6% on all your income – you will pay 6% on the portion over €174980 , 2% on the first €75036,  and 4% on the next  €99943.

If your income is greater than the minimum threshold of €15,028 per year or €289 per week, you pay the levy on the full amount of your income.
(If you are aged 65 or over the minimum threshold is €20,000 per year for a single person and €40,000 per year for a couple).

If you are a PAYE worker – your employer will calculate the income levy at each payslip – on a week by week or month by month basis. If your income varies from week to week you could pay the income levy in certain weeks/months  even if your total annual income is under the threshold. In this kind of situation your employer should make an adjustment at the end of the year and refund all income levy deducted from your wages.

If you have not worked with the same employer continuously throughout the year Revenue will deal with any refund of income levy due at the end of the year.

Example 2

From 1 May 2009 the income levy is calculated on a weekly threshold of 2% for income up to €1443,  4% on income from €1443 to €4810, and 6% on anything over €4810.
If you get a payment for one week in excess of €3,365 you will pay the income levy at the 3% on the balance.

If your yearly income means you are liable at a lower rate, you will have overpaid the income levy. In this situation your employer should make an adjustment at the end of the year (week 52) and make the appropriate refund. If you have not worked with the same employer continuously throughout the year Revenue will deal with any refund of income levy due at the end of the year.

The Health Levy in Ireland is really just another name for income tax that is deducted from earnings. It is supposed to be used by Department of Health and Children to fund health services in Ireland.  The recent April 2009 mini Budget doubled the rate of this Levy. (So will we see a massive improvement in Health Services? – or are we all just being fooled ?)

The following people do not pay the health levy:

• People earning less than €500 gross per week
• People who have a medical card
• People getting One-Parent Family Payment, Deserted Wife’s Benefit/Allowance, the Widow’s/Widower’s Contributory Pension and the Widow’s/Widower’s Non-Contributory Pension.

If you have paid the health levy and think you should not have, you should contact your local tax office to find out how to get this money back.

The health levy was previously paid at the rate of 2% on all earnings up to €100,100 and 2.5% on earnings over €100,100.

From 1 May 2009, the health levy will be paid at the rate of:

• 4% on all earnings up to €75,036
• 5% on earnings over €75,036.

So someone earning 40k a year would have paid  800 euro a year – will now pay 1600 euro a year (133 euro a month) . People paying private health insurance as well must be thinking why are they paying twice.

The annual rate of Irish inflation in March 2009 fell 2.6 per cent. This is according to data released by the Central Statistics Office (CSO) today.

Prices showed no change between February and March 2009 compared to an increase of 0.9 per cent in March 2008.

This brought the annual rate of inflation to minus  -2.6 per cent compared with  minus -1.7 per cent in February. The rate of consumer price inflation in Ireland  first turned negative in January 2009 .

In his Budget speech on Tuesday  Brian Lenihan said the Government was expecting inflation to average at  minus 4 per cent this year.

The April Mini  Budget brought in an increase to the Driving Test Fee.The driving test fee for a Car (category ‘B’), Car and trailer (EB), Moped (M), Motorcycle (A, A1) and Works Vehicle (W) has increased from €38 to €75.
The fee for all other categories has increased to €110. Effective from 7 April 2009.

The april 2009 mini budget introduced a cut in the he personal rate of Jobseeker’s Allowance  to €100 per week for new claimants under 20 years of age (claiming after first week of May 2009).The maximum Increase for a Qualified Adult payable to a Jobseeker’s Allowance claimant aged under 20 will also be reduced to €100 per week (first week of May 2009).

However, the reduced personal and qualified adult rate of Jobseeker’s Allowance for claimants under 20 years of age will not apply in the following cases:

• Claimants with dependent children
• Claimants with a qualified adult and dependent children
• People transferring to Jobseeker’s Allowance immediately after finishing their entitlement to Jobseeker’s Benefit
• People transferring from Disability Allowance to Jobseeker’s Allowance
• Where an existing Jobseeker’s Allowance claimant gets a job and stops claiming the allowance but loses that job an ends up back on Jobseeker’s Allowance within 12 months
• People aged 18 and 19 participating in a Youthreach course for young early school leavers or a full-time course in a Senior Traveller Training Centre
• Claimants who qualify for the Back to Education Allowance full-time second level course or post Leaving Cert course
• People aged 18 to 19 participating in a full-time FAS training course

When a person on reduced Jobseeker’s Allowance reaches the age of 20, if they still qualify, they will be entitled to the full adult rate.

There is no change to Jobseeker’s Benefit for claimants under 20 years of age.(People who have made enough PRSI contributions)