The Fair Deal offers financial support for those who need long term nursing home care. Under the scheme you make a contribution towards the cost of your care and the State pays the balance. The contribution you make depends on a financial assessment of your income and assets.
How Much Do You Have To Pay?
You typically pay 80% of your annual income e.g. pensions etc and 7.5% of the value of your assets (above €72,000 for a couple).
Example: If your joint income is €30,000 your family home is valued at €300,000 with savings of €82,000, in years 1 to 3 your contribution will generally be as follows:
| Year 1 | Year 2 | Year 3 | Year 4 | |
|---|---|---|---|---|
| Your contribution | €47,250 | €47,250 | €47,250 | €24,750 |
In year 4 onwards, the family home would no longer be included in the assessment so you would pay €24,750 per annum and the State would pay the rest.
Is There Tax Relief For This Payment?
Yes, but the amount of relief depends on the tax bracket of the Parents. In the above example the Parents due to their low income would pay no tax so unfortunately NO tax relief is available to them.
Can Anyone Else Claim The Tax Relief?
YES, but they must actually make the payment to the Nursing home. Assuming an Adult child working in Ireland has enough income at the Irish tax rate of 40% a comparison of tax relief available depending on who pays the Nursing home contribution is set out below.
| Year 1 | Year 2 | Year 3 | Year 4 | |
|---|---|---|---|---|
| Your contribution | €47,250 | €47,250 | €47,250 | €24,750 |
| Tax relief for parents | Nil | Nil | Nil | Nil |
| Tax relief for Adult child at 40% | €18,900 | €18,900 | €18,900 | €9,900 |
Conclusion
The more you understand about the financial aspects of the Fair Deal scheme, the better prepared you are to integrate it into your future financial needs. In all cases, you really need to crunch the numbers and plan in advance to see if it can be optimised for your family circumstances.
