By William Donovan, Solicitor, Property Department
The Nursing Homes Support Scheme Act 2009 (“the Act”) came into operation in its entirety on 27th October 2009. It provides the legislative basis for the financial support scheme for those requiring long-term residential nursing care, commonly referred to as ‘the Fair Deal Scheme’.
• A care-needs assessment to ensure need of long term residential nursing care.
• A financial assessment to determine the applicant’s contribution to care and the corresponding state financial aid. The financial assessment will also look at income or assets which the applicant has disposed of within five years.
• The third is optional, being an application for ancillary state support and referred to informally as the ‘Nursing Home Loan’.
The applicant will contribute up to 80% of his/her assessable income and up to 5% of the value of any assets (the first sum of €36,000.00 is disregarded) he/she owns towards the cost of care. The State will then pay the full balance of the cost. The value of the family home or “the principal private residence” will only be taken into consideration for a maximum period of three years.
The Nursing Home Loan
The 5% contribution from assets (such as land and property or investments and savings) may be deferred for the person’s lifetime and collected from the estate. Its purpose is to ensure that the applicant does not have to sell the asset during his/her lifetime. The HSE will advance an interest free loan to the applicant and secure it by registering a charging order against the asset in question.
The Care Representative
If the applicant does not have the necessary mental capacity to apply for the Nursing Home Loan, an application to the Circuit Court can be taken in order to appoint a care representative. This is where the applicant wishes to avail of the Nursing Home Loan. The role of the care representative is set out in section 21 of the Act.
Discharge of Charging Order
On the death of the patient, his/her legal personal representative will have to discharge any amount lawfully owing to the HSE/State. This may be derived from the sale of the asset. The amount owing is paid to the Revenue Commissioners and once paid the HSE is notified and a discharge is lodged in the land registry for its removal.
Making of a Will
The practical implications of taking out the nursing home loan and having a charging order created over specified assets should be considered when making a Will. If an asset is ear-marked for a certain beneficiary it is prudent to seek the wishes of the testator as to how the loan is to be discharged. Care needs to be taken in drafting the Will.
A person in need of long term residential nursing care should consider the terms of the Scheme and take legal advice where appropriate. Any proposal to transfer property on a voluntary basis will have consequences as property transferred within a five year period is taken into account in the financial assessment. Also, care needs to be taken in drafting the Will.
For further information or advice please contact William Donovan in our Property Department.
Take legal advice where appropriate especially as regards the appointment of a care representative, any proposal to dispose of property or when drafting a Will.