Q1: my elderly mother has been in a nursing home for five-plus years under the Fair Deal scheme. She availed of the loan option. Her assets are limited to the family home and small cash deposits. When the property is sold eventually, will the Fair Deal Scheme receive 22.5% of the sale price or the valuation when the loan was drawn down?
Answer: the final loan amount will have the relevant Consumer Price Index (CPI) number applied to it to take account of the time value of money since the loan was made. This is required by law and may increase in line with inflation or decrease in line with deflation. The CPI is applied to the amount due.
You will need to repay the loan immediately if you sell or transfer your property. You must notify your local Nursing Homes Support Office within 10 working days of the sale or transfer.
If the property is sold or transferred when a person is still in care, the loan must be repaid within six months of the date of sale or transfer. After the death of the person in care, the loan must be repaid within 12 months to the Revenue Commissioners. This is due to be extended to 18 months. If the loan is not repaid when due, interest will be applied from the date of death, sale or transfer.
Q2: my mother is in a home and now our family home is empty and the concern is that it is falling into disrepair. What are the implications of selling the family home now? How will the cash raised be treated upon the sale of the property and at her death?
Answer: if you sell the family home while your mother is in care, the net proceeds of sale will also qualify for the three year cap. You need to consider whether your mother has the mental capacity to sell the house? Is she still of sound disposing mind? If she is, you could consider a Power of Attorney whereby she could appoint a family member as her attorney to look after the sale and sign the legal paperwork, if required.
If she does not have capacity you will have to consider registering an Enduring Power of Attorney, if she made one while she had capacity or alternatively, an application will have to be made under the Assisted Decision Making Capacity Act to have someone appointed to make those decisions on her behalf.
From a tax perspective, the sale will trigger Capital Gains Tax. However, any tax can be exempted or minimised under Principal Private Residence Relief.
She may also need to revise her will if the house is being sold as provision may have been made in relation to who is to receive the dwelling house under her will. If the house is sold, this bequest would no longer take effect and she may wish to leave whatever proceeds from the sale are left to the person who was intended to get the house.
Q3: if I transfer the ownership of the home into my son’s name now, how long does he have to own the home before he is not liable for Fair Deal fees if I go into a nursing home?
Answer: once the asset is transferred, it is the applicant that is vulnerable. The HSE cannot pursue your son which may mean the parent cannot afford the nursing home.
The financial assessment includes any assets you have transferred in the five years before the date of your first application or any assets you have transferred on or after the date of your first application.
If you have given any land, property or money to another person in the last five years or five years prior to your first application, you will need to tell the HSE as part of the process. You will also need to tell them if you transfer any property, money or land after you make an application, and also provide the date of transfer.
Total cash assets transferred to another person within five years of your first Nursing Homes Support Scheme application (cash, savings, deposits, shares, bonds, securities, life insurance, life assurance policy, etc) are also included.
Q4: if I sign over the ownership of my house, can I put in a clause that I have a right to live in the house until my death?
Answer: a general right of residence would not be taken into account. If you have a right of residence only, the HSE will need a legal document that states this.
You must provide details, including a valuation, of all assets in which you have a beneficial interest. You might enjoy the benefit of a property or other asset even if you are not the ‘registered owner’. For example, you might have a life interest in an asset, which includes an exclusive right of residence.
A beneficial interest is an asset and will be assessed when a financial assessment is carried out.
Disclaimer: The information in this article is intended as a general guide only. While every care is taken to ensure accuracy of information contained in this article, Aisling Meehan, Agricultural Solicitors and Tax Consultants does not accept responsibility for errors or omissions howsoever arising. E-mail aisling@agrisolicitors.ie
Aisling Meehan, agricultural solicitors and tax consultants.
Q1: my elderly mother has been in a nursing home for five-plus years under the Fair Deal scheme. She availed of the loan option. Her assets are limited to the family home and small cash deposits. When the property is sold eventually, will the Fair Deal Scheme receive 22.5% of the sale price or the valuation when the loan was drawn down?
Answer: the final loan amount will have the relevant Consumer Price Index (CPI) number applied to it to take account of the time value of money since the loan was made. This is required by law and may increase in line with inflation or decrease in line with deflation. The CPI is applied to the amount due.
You will need to repay the loan immediately if you sell or transfer your property. You must notify your local Nursing Homes Support Office within 10 working days of the sale or transfer.
If the property is sold or transferred when a person is still in care, the loan must be repaid within six months of the date of sale or transfer. After the death of the person in care, the loan must be repaid within 12 months to the Revenue Commissioners. This is due to be extended to 18 months. If the loan is not repaid when due, interest will be applied from the date of death, sale or transfer.
Q2: my mother is in a home and now our family home is empty and the concern is that it is falling into disrepair. What are the implications of selling the family home now? How will the cash raised be treated upon the sale of the property and at her death?
Answer: if you sell the family home while your mother is in care, the net proceeds of sale will also qualify for the three year cap. You need to consider whether your mother has the mental capacity to sell the house? Is she still of sound disposing mind? If she is, you could consider a Power of Attorney whereby she could appoint a family member as her attorney to look after the sale and sign the legal paperwork, if required.
If she does not have capacity you will have to consider registering an Enduring Power of Attorney, if she made one while she had capacity or alternatively, an application will have to be made under the Assisted Decision Making Capacity Act to have someone appointed to make those decisions on her behalf.
From a tax perspective, the sale will trigger Capital Gains Tax. However, any tax can be exempted or minimised under Principal Private Residence Relief.
She may also need to revise her will if the house is being sold as provision may have been made in relation to who is to receive the dwelling house under her will. If the house is sold, this bequest would no longer take effect and she may wish to leave whatever proceeds from the sale are left to the person who was intended to get the house.
Q3: if I transfer the ownership of the home into my son’s name now, how long does he have to own the home before he is not liable for Fair Deal fees if I go into a nursing home?
Answer: once the asset is transferred, it is the applicant that is vulnerable. The HSE cannot pursue your son which may mean the parent cannot afford the nursing home.
The financial assessment includes any assets you have transferred in the five years before the date of your first application or any assets you have transferred on or after the date of your first application.
If you have given any land, property or money to another person in the last five years or five years prior to your first application, you will need to tell the HSE as part of the process. You will also need to tell them if you transfer any property, money or land after you make an application, and also provide the date of transfer.
Total cash assets transferred to another person within five years of your first Nursing Homes Support Scheme application (cash, savings, deposits, shares, bonds, securities, life insurance, life assurance policy, etc) are also included.
Q4: if I sign over the ownership of my house, can I put in a clause that I have a right to live in the house until my death?
Answer: a general right of residence would not be taken into account. If you have a right of residence only, the HSE will need a legal document that states this.
You must provide details, including a valuation, of all assets in which you have a beneficial interest. You might enjoy the benefit of a property or other asset even if you are not the ‘registered owner’. For example, you might have a life interest in an asset, which includes an exclusive right of residence.
A beneficial interest is an asset and will be assessed when a financial assessment is carried out.
Disclaimer: The information in this article is intended as a general guide only. While every care is taken to ensure accuracy of information contained in this article, Aisling Meehan, Agricultural Solicitors and Tax Consultants does not accept responsibility for errors or omissions howsoever arising. E-mail aisling@agrisolicitors.ie
Aisling Meehan, agricultural solicitors and tax consultants.
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