Can I sell Dad’s home before we get a decision on Fair Deal?

My father has just gone into nursing home care and we are looking at what is involved in a Fair Deal application. I have read the rules regarding the contribution on the family home and how that can be put off for now. I also know the rules have changed recently. But I cannot find any information about what happens if we sell the home before a Fair Deal application is made, or approved.

Private nursing homes are very expensive and his resources are limited, so we fear we may have to sell his home before Fair Deal is sorted.

Ms HM

You’re certainly right about the cost. Most nursing homes outside of the big cities are charging more than €1,000, and it is closer to €1,500 in Dublin for private care. These figures are actually above the agreed Fair Deal rates, which is something you will need to consider. In my experience, most private nursing homes in Dublin are applying a weekly “premium” above the Fair Deal rate for private care, and some nursing homes are no longer accepting Fair Deal residents at all.

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That is something you will need to check with the nursing home where your father is before proceeding. It is possible that he will have to move to avail of nursing home support from the State.

Getting back to the family home issue, you are correct that the rules have changed.

The basic premise stays the same: you will be charged 7.5 per cent of the market value of the family home at the time your father entered care for the first three years of his private nursing home care as long as he is the sole homeowner. If your mum is still alive and they are still a couple, he will be charged 3.75 per cent a year for those three years.

This cost can be covered by what is called a Nursing Home Loan/Fair Deal loan so that it only falls due one year after your father (or, if later, his wife or other dependant occupying the home) dies or six months after it is sold.

[ Will rising property value affect amount we must pay HSE for Fair Deal on family home? ]

Originally, the rules stated that if you sold the family home at any point while your father was availing of Fair Deal, the proceeds would simply become part of his general assets and subject to the 7.5 per cent (or 3.75 per cent as applicable) annual charge on his assets for as long as he is in care, even beyond the three years. Of course, this meant thousands of homes around the State were left unnecessarily empty.

Those rules have been changed, and the three-year limit on the contribution from the family home is now absolute, regardless of whether the property is sold after you qualify for Fair Deal. Obviously, if he dies before the three years, he contributes only for the period in which he is in care.

But what about selling the home before you are signed up for Fair Deal? I haven’t come across this scenario before. Clearly, if you sell before he enters care at all, the proceeds are part of his general assets and subject to charge ad infinitum while he is in care. But what if the property is sold after he goes into care but before you get around to making the Fair Deal application or receiving a decision?

The first thing to note is that, although it does require a fair bit of information, a Fair Deal application should take only a couple of weeks to pull together – not least with the motivation provided by those sky-high private fees. There are a number of companies that will help with the process for a fee if it is something the family will struggle with.

And the HSE generally expects to make a decision on the application within about six weeks. Even assuming it is more than this, there are few properties selling from a standing start to completion in a couple of months.

[ The Irish Times view on the Fair Deal nursing home scheme: time for a proper review ]

That aside, I asked the HSE what the position would be if someone did sell a home between the date the owner entered nursing home care and a Fair Deal application was made – never mind ruled upon.

First up, as you might expect, the HSE makes clear that they are responding purely in the context of the scenario presented to them – “where the client is in continuous care and wishes to sell the family home to meet the cost of care before a Fair Deal application is made and that the client will remain in an approved nursing home”.

“If the family wish to make a Fair Deal application following the sale of the family home, the client will be assessed on the net proceeds of sale of the principal private resident instead of the value of the principal private resident until three years in care has elapsed. When the client is three years in care, the net proceeds of sale will no longer be assessable for the purpose of the Nursing Home Support Scheme [Fair Deal].”

So, in simple terms, if you sell the house before making the Fair Deal application, you will still be covered by the three-year limit as long as your father is already in nursing home care when the house is sold and stays there. Naturally, the 7.5 per cent charge will be assessed on the actual price secured on the home in those circumstances.

Finally, just to remind you that Fair Deal is not retrospective, so even though the house sale situation may be covered, the HSE will not backdate financial support to when your father entered the nursing home in terms of covering any fees you will have paid out until then.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to dominic.coyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice