Help with Payment of Nursing Home Charges
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.