Are you considering availing of The Fair Deal Scheme but worried about the tax and financial consequences on your savings and family home? Consider planning early.
The Fair Deal Scheme is a Government funded program that provides financial support for those requiring long-term nursing home care. In order to determine how much you will pay from your own funds towards the cost of nursing home care a financial assessment must first be completed.
How does the financial assessment work ?
The amount you will pay depends on two factors:
Your income e.g. pension, rental income etc ) and
Your assets (e.g. cash, savings & investments and property etc ).
Example,
John and Mary have annual income of €30,000. Their family home is valued at €300,000, savings of €100,000 of which €72,000 can be excluded from the assessment, so only €18,000 is assessable.
In years 1 to 3 they will pay annually:
80% of their income €24,000.
7.5% of property: €22,500
7.5% of their savings, €1,350.
Total due €47,850
The Family home is only included in the financial assessment for a period of 3 years so the annual payment after year 3 is reduced to €25,350.
In essence you will not pay more than 22.5% of the value of your home. This cap can also extend to your farm or business.
What if I transfer any assets to my children now before I apply ?
The assessment will take into account any assets that you have transferred in the last five years, therefore advance planning is required so that assets are transferred outside the five year window.
Is there a tax cost if I transfer any assets to my children now?
Perhaps. Tax is always a factor but if managed properly, it may be possible to transfer assets now and avoid or minimise any tax cost depending on the asset being transferred. We can advise in this area.
Next steps
Determine the tax cost, if any, of transferring some of your assets to your children today by way of Gift rather than Inheritance on your death. We offer an hourly consultation service, so if you require this services please call the office to arrange an appointment 091 592080 or email [email protected]
The above information should be treated as a guide only. We offer an hourly consultation service, so if you require this services please call the office to arrange an appointment 091 592080 or email [email protected]
