Friday, January 27, 2023

Assisted Decision Making (Capacity) Act for Fair Deal Nursing Home Support Scheme in 2023

 

On December 17 2022, President Higgins signed the Assisted Decision Making (Capacity)(Amendment) Act, 2022. Even though the bill is successfully passed through both Houses of the Oireachtas, it doesn’t yet have a start date, just like the previous Assisted Decision Making (Capacity) Act, 2015.

While the Courts Service and Decision Support Service (DSS) and other committees come up with a date to put the Act into effect, Section 102 of the 2022 Act modifies Section 21 of the Nursing Home Support Scheme Act, 2009. This means that no new applications under the previous processes will be considered on or after the new law takes effect for Care Representative applications.

 

If you are looking to apply for the Fair Deal Scheme on behalf of a loved one in 2023, then this blog is to give you a clear idea of representing someone to get the funding that really works.

 

Applying For The Fair Deal - Nursing Home Support Scheme on Behalf Of A Person

Applicants must sign the Fair Deal Application Form in order to apply for State Support. The restrictions are loosened for people with reduced decision-making abilities. In such circumstances, the candidate's "Specified Person" can apply for State Support on their behalf.

Under the Fair Deal Scheme, it is not always easy to choose a specific person. While the HSE acknowledges that family members, friends, or even social workers may want to help a relative or friend obtain state support, it is essential that the specified person identify themselves by including their contact information and other whereabouts in the form. Only a small number of people meet the requirements to act as a specific person and represent the person in need of care that includes the following:

           A Care Representative with all the qualifications specified under the Nursing Home Support                    Scheme 2009

 

    A Specified Person or Committee appointed under the Office of Ward of Courts

 

    The attorney or holder who is appointed the Enduring Power of Attorney, permitting them to take medical and financial decisions on behalf of the donor.

 

    A “Next Friend” appointed by the Circuit Court

 

    A spouse: wife, husband, partner or same-sex spouse cohabiting for a minimum of 3 years as life partners.

 

    An Irish-registered medical practitioner: doctor, caregiver or medical social worker

 

Individuals who obtain any legal documents like the Power of Attorney or are appointed by the court, have a better advantage of “high priority” than those of family members, or medical social workers, who are given comparatively “low priority”.

 

In many cases, the Care Representative or a Ward of Courts might have to present written consent to accredit the eligibility of a person to be a “low-priority specified person” to represent the individual seeking Nursing Home Support. 

 

 

Individuals may submit the application even while waiting to get appointed as a specified person, but sooner or later they would have to share evidence of their appointment and legal authority.

 

Role of the Care Representative For Availing The Nursing Home Loan Scheme

When choosing the Nursing Home Loan Scheme, applicants must designate a "relevant accountable person" who will be in charge of paying back the nursing home loan to the Revenue Commissioners after the applicant's death. A Care Representative may be designated by a person with diminished mental ability to act on their behalf and designate themselves as the responsible party.

 

Legally, the care representative of a deceased person must notify the HSE as soon as is reasonably possible, but no later than three months before any distribution of the assets from the individual's estate. To fulfill the requirement, the following factors are required:

 

1)     a list of the assets that are included in the deceased person's estate

2)     a written statement outlining the representatives' plan to allocate the assets.

 

A Care Representative will be held personally accountable for any sum owed to the HSE if they fail to keep enough estate assets to cover it.

New Norms for Assisted Decision-Making Bill

 

The Irish Government has passed the Assisted Decision-Making Bill, and it is anticipated that it will become law early in 2023. New standards for the appointment of specified persons are expected as well. Particularly, the appointment of court-appointed wards and/or care representatives may no longer take place. But it's not yet clear what the adjustment will entail.

Applicants are free to consult legal advice or the guidance of a Fair Deal advisor to make the right decisions and conduct all the procedures of appointing a specified person more diligently.

Friday, January 6, 2023

The Nursing Home Loan Scheme: Paying for Nursing Home Care with Your Home

 

The latest Nursing Home Support Scheme (Amendment) Act 2021 permits residents to sell their primary residence after three years in care. The 3-year cap also applies to the Fair Deal Nursing Home Loan Scheme, where you must repay the loan with a cap of 22.5% (7.5% annually for three years) or 11.5% for couples (3.75% annually for three years).

The remaining proceeds, however, will not be considered a cash asset under the scheme. This loan can be repaid early at any time and is not subject to fair deal coverage. Now does that make this life loan any easier? Let’s find out in this blog.

How the Fair Deal Loan Repayment Works in 2023

The Fair Deal Ancillary State Support programme allows people who need nursing home care to postpone paying the amount of their "asset contribution" toward their house, farm, or company as a form of life loan.

This is part of the nursing home support scheme cost of care, which also incurs 80% of any cash assets like savings, deposits, bonds, shares, etc. The deferred payment, worth 11.5% for couples and 22.5% for singles, would need to be paid after the passing of the resident of the nursing home.

What is the Asset Transfer Process?

The concept of "transferred asset" was left unchanged in the 2021 Act. It still refers to an applicant's interest in an asset (whether cash or real estate) that has been transferred at any time in the five years before the date on which the application for state support is first made and for the following purposes:

      Free Will Transfer (voluntary, no consideration)

      Consideration of names

      Less than 75% of the transferee's anticipated stake in the asset's market value at the time of the transfer as consideration

The descendants of the owner of the estate must present a copy of the schedule of assets to the HSE at least three months before the estate is distributed. And they have to wait until the HSE sends a clearance of outstanding debts. Accurate valuation and timely declaration of the assets are the only ways to simplify the application process.

Understanding "Asset Contribution" for the Fair Deal Scheme

In Ireland, housing costs are steadily rising. The average cost of a house in Ireland at the end of 2022 will be €370,000. Such an amount is almost eight times the average salary of €48,000.

The Health Service Executive (HSE) will not reduce the property valuation for a life loan while evaluating an applicant's Fair Deal assets. Therefore, the applicant or their children will typically have a sizeable payment to make, and the computation won't be based on the home's net equity. So note the following key points that go into the life loan:

      The HSE will not reduce the property valuation for a life loan while evaluating an applicant's Fair Deal assets.

      The HSE will not permit the applicant to obtain a nursing home loan to cover their property asset contribution.

      The life loan provider will have a first charge on the property, and daily interest charges will keep the equity from growing.

The descendants of the person living under nursing home care are typically responsible for the debt repayment. As a result of annual statements revealing growing debt levels, many families managing these life loans since the 2009 scheme policies have found themselves in a bad situation and regretting their decision. However, new applicants in 2023 might not make the same mistake. Dedicated firms like Fair Deal Advice are helping new applicants make better decisions by considering the future from a bigger perspective.

Selling The House To Repay The Loan

The nursing home loan appeals to applicants who don't have sufficient savings and can use the house to pay for the loan. However, you must consider that with this kind of life loan, you pay pricey compound interest in addition to interest on the principal amount borrowed.

Selling the house or other asset property is the standard practice to repay the debt, and then the HSE will determine their contribution based on the net earnings, if any, of the sale. But this poses a big problem if you already have a spouse or other family member living in the house.

The loan may be available to those who do not have a spouse living in the home or who are concerned about asset transfer, allowing them to use the property to pay for nursing home care.