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Saturday 24 August 2019

Delays in recouping Fair Deal fees as home sales put off until after death

(Stock picture)
(Stock picture)
Eilish O'Regan

Eilish O'Regan

The State is battling delays in recouping Fair Deal fees in cases where nursing home residents pay after their death.

In some cases houses are lying empty for years while the owner receives nursing home care.

The HSE estimates around 61pc of nursing homes support scheme residents have a family home included in their financial assessment.

Some of these have a spouse or family member living in them while the resident is in the nursing home, but others are lying empty or rented.

Between November 2010 and March last year, the HSE subsidised most of the weekly cost of care for 5,327 residents with an agreement the "loan" would be repaid after they passed away.

The Exchequer was due €101.6m in fees following the death of the residents over that time - but at that point only €69.8m was recouped, according to figures obtained by the Irish Independent.

Under the scheme people make a contribution towards the cost of their care, based on their assessed means, and the State pays the balance.

The Revenue Commissioners is tasked with collecting the money, which mostly comes from the sale of people's homes, but delays in probate can slow up the rate at which it is recovered.

It emerged earlier this week that the Fair Deal scheme is under pressure this year as the number of residents availing of the subsidy rose. The number now in the scheme is 23,228, compared to a HSE budgeted target of 23,042.

The scheme is already costing nearly a €1bn a year. The HSE said the average annual cost to the scheme per resident is around €43,000.

Under the Fair Deal scheme, nursing home residents can opt to pay the full extent of their contribution to their fees in their lifetime or wait until after their death.

The majority pay for their care, subsidised by Fair Deal, in their lifetime. For those who do not, the Revenue Commissioners seeks the payment from the person's estate.

In the case of the family home, this amounts to a payment of 7.5pc a year of its value, capped at 22.5pc and payable on death.

The fall in house prices during the recession meant this led to a drop in income from these property sales, but the economic recovery will mean the Exchequer will be able to generate a better return.

If the house is sold during the resident's lifetime it is a liquid asset and liable to the 7.5pc payment every year without any cap.

If the same house is sold after the person's death the payment to the State is capped to 7.5pc a year so the Exchequer gets less and the payment takes longer to recoup.

Around 600 residents have both a principal residence and rental income included in their means assessment.

Irish Independent

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