Saturday 26 May 2018

Could mother's house help pay nursing home ?

Our elderly mother needs to move into a nursing home after being widowed last year. She has her own house, but won't let us sell it under any circumstances. We've found a lovely home, but it's over €1,000 a week which we can't afford. Is the Fair Deal scheme still operating?

I'm sorry to hear about your mother, although she sounds quite feisty! The Nursing Home Support Scheme, to give it its correct title, was suspended last year after confusion over its funding. However, it says it is now processing applications, although these are taking months rather than weeks.

To qualify, an applicant is means tested, pays up to 80pc of their income as a contribution and undergoes a care-needs assessment (to determine if long-term nursing home care is required). The application itself is complex and you will be required to list all assets, including your mother's house.

Not everyone who applies qualifies, especially those deemed to have enough income to pay for their own care.

Regarding her home, the scheme provides that a maximum of 15pc of its value will be paid over (5pc for each of three years), but not until the house is sold after her death, so you can reassure her on that point. Just bear in mind that if the house is left vacant you may encounter insurance difficulties; if you rent it out, she will be deemed to have extra income, which may scupper your claim.

See deal for an application form.

I am currently in arrears of approximately €32,000, on my €200,000 mortgage. I have mortgage protection in place but I'm wondering if the arrears will make a difference if my family made a claim under the policy.

Mortgage Protection is life cover which must be taken out to protect the lender should you die before the loan is paid. It normally means your mortgage is paid off in full.

However, most policies operate on a "decreasing term" basis, that is, the life cover drops at the same rate as the outstanding loan. Those in arrears are actually building up more debt, so the policy may not be adequate to cover them in the event of a claim.

Michael Bradley, managing director of Clear Financial, says: "If your partner is unable to fund the outstanding €32,000, the bank could ultimately repossess the house. Sadly there are thousands of people falling into arrears on their mortgages due to the same financial strain that you are experiencing. You should talk to an expert to review, amongst other things, your mortgage protection needs.

"A financial adviser may suggest you move to a level term policy, which is for a set amount of cover and unlike regular Mortgage Protection cover, doesn't decrease when capital payments on your mortgage have been suspended. With sufficient Level Term cover in place, the mortgage will be cleared should you die".

That aside, do keep in contact with your bank and make sure you answer all correspondence regarding the arrears.

Indo Property

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