Fair Deal is a Nursing Home Support Scheme whereby a patient contributes 80% of their Income and 7.5% of their Assets annually for three years towards nursing home costs and the State covers the remaining cost.
There are some allowed deductions and exempted income together with an excluded saving allowance.
Under assets a person’s Principal Private Residence (PPR) is automatically exempt after three years, other assets are not.
No automatic exemption applies to farm, business, or investment assets. For a Farm, if a farming successor exists the farm can qualify to become exempt after three years. This is subject to conditions, the principal one being that the farm was actively farmed (by the patient or family farming successor) in the three years prior to Fair Deal and will be actively farmed by the family farming successor for at least six years post Fair Deal.
Leased or rented out land will not qualify for exemption after three years unless it has been leased or rented by the family farming successor. Extended relatives are permitted as family farming successors.
Assets transferred at least five years before Fair Deal are completely exempt.
All Fair Deal claims and applications are cross-checked against Revenue and the Dept of Agriculture.
If funds are not available to pay the Fair Deal a charge can be made against the assets which will be collected by Revenue on the death of the patient, or sale, or transfer of the property.
What to Do:
While no one wants to think of Nursing Homes considerations to mitigate or avoid cost include:
- Consider supported care at home.
- Transfer the Farm five years prior to any Nursing Home.
- If you opt to make a timely transfer of the farm it is safe that it be leased out before and after transfer. This option is also farm inheritance gift tax (CAT) safe. The lease should be Revenue Stamped and to an active farmer.
- If the five-year transfer is not an option, then identify a family farming successor and have him/her farm the land. Should you wish, this farming can be under a lease to him/her or under a partnership arrangement.
Fair Deal Costed Example, what a person pays:
Take a widowed farmer in is late seventies with a weekly income of €600 including the state pension and cash savings of €80,000. He owns a farm worth one million euro and a house there on which his PPR is valued at €250,000. There are no farm loans or other investments. The farmer is looking at a Nursing Home and Fair Deal.
Weekly Contribution Calculation
| Assets | Adjustment | Contribution | Weekly Contribution € | Note | |
| Weekly Income | 600 | – | 80% | 400 | a |
| Cash Savings | 80,000 | First 36,000 excluded | 7.5% of 44k divided by 52 | 63 | a |
| PPR | 250,000 | – | 7.5% divided by 52 | 360 | b |
| Farm | 1,000,000 | – | 7.5% divided by 52 | 1,442 | c |
| Other Assets | 0 | – | – | 0 | |
| Calculated Weekly Farmers Fair Deal Contribution | 2,265 | ||||
This €2,265 weekly contribution will apply for up to three years. It can be paid in full or a reduced amount €463 (a) paid weekly instead with the remaining €1,802 (b+c) put as a charge against the assets (the farm and home) to be collected later by Revenue.
After three years this charge amount, should the farmer remain in the Nursing Home that long, will be
| PPR 360 x 52 x 3 | € 56,160 |
| Farm 1442 x 52 x 3 | € 224,952 |
| Total | € 281,112 |
| Total that will be collected by Revenue allowing for CPI adjustment | € 301,100 |
After three years the PPR contribution (b) automatically stops resulting in a new weekly contribution of €1,905 (a+c).
At this point, if a family farming successor exists and the active farming conditions apply (3 years prior and 6 years post) the Farm contribution also stops meaning the weekly contribution from there for the remaining Nursing Home years will be €463 (a).
If the farmer’s spouse was still alive and she was not going into the Nursing Home the calculations would be half as she is half owner of the asset. The 80% becomes 40% and the 7.5% becomes 3.75%.
Information document E&OE while every effort has been made to ensure accuracy, this document is a guide only. For all rules and conditions refer www.hse.ie/fairdeal or contact info@landmobility.ie for a consultation.
