Nursing Homes Support Scheme Guide For The 3-Year Cap

 

The Fair Deal Scheme, with a total budget of roughly €1.4 billion in 2021, is intended to provide long-term nursing home support for up to 22,500 people in Ireland. There is general agreement that the fair deal plan works effectively for a particular group of applicants with limited income and assets. The priority remains that no one will pay more than their cost of care.

However, since it has had a significant impact on families and succession, concerns have been expressed about the system regarding the consequences of the annual contribution of 7.5% on assets like homes, businesses, and farms.

The 3-year cap was introduced as a way to increase the viability of family-run farms and businesses. This Nursing Home Support Scheme Guide will explore all the aspects of the 3-year cap, including how it works for families, couples, succession, and general rules.

What is the 3-Year Cap in the Fair Deal: Nursing Home Support Scheme in Ireland? 

 

The 3-year cap, which was previously only available for principal residences with existing families, finally received the long-awaited update in 2021, with the amendment to the bill that extends the cap to family farms and businesses as well as contributions made by a principal residence to the proceeds of the sale of that residence.

Only the first three years of the applicant's care for themselves or a loved one would be covered by the annual payment of 7.5% against their home, farm, company, or sale of a house.

Treating the home and its proceeds equally furthers fairness and, in the context of the housing crisis, removes a barrier to selling a vacant property when a family member enters long-term care. And this cap would also apply to those who have opted for nursing home loan support.

 

How the 3-Year Cap Works for Home Owners

The Fair Deal Scheme entails applicants having to pay off homes and other assets that they own. It does not affect the assets of other family members. After the first three years, the financial assessment will automatically remove your home, farm, or business. There is nothing to do here; no further agreements or processes are involved. After years, you can stop paying against the property.

 

If you have opted for a nursing home loan. The HSE will draw the loan amount after only three years, either by the sale of the property or through a mortgage if any of the family members choose to pay off the instalments.

 

If you sell the property after three years, then the net proceeds of the sale would be counted. But you would have to pay 7.5% of the proceeds for only 3 years. And you must inform the local office of the Nursing Home Support Scheme if you are selling the property.

 

How The 3-year Cap Works For Farms and Businesses

 

After the 2021 amendment, farm owners or businesses will also get the 3-year cap on contributions for the cost of care. They need not apply or go through any process to get this. Eligible applicants automatically get the cap. The eligibility criteria go as follows:

 

➔    The business or farm must be managed by either the applicant himself/herself or an immediate family member for a minimum of 3 years to 5 years

➔    Appoint a successor, usually a family member, who will take care of the business or farm for at least five years after the transfer.

 

How The 3-year Cap Works for Couples Getting Fair Deal Scheme 

 

Couples will each contribute 3.75 percent of their home's value for a maximum of three years. The maximum amount you may contribute over three years is 11.25% of the property's value. The overall contribution is limited to 22.5% if both partners are receiving care. If you obtain a nursing home loan for your residence, your partner may also request to have the loan's lifetime payments postponed.

 

Payments Cannot be Applied Retroactively

 

No payments made earlier than the 3-year cap may be "backdated" or refunded. So, if you've been in care for five years, you might be eligible for the three-year cap. However, this only applies as of the day the HSE designates your family's successor. Any payments you've already made won't be reimbursed.