The Fair Deal scheme (the Nursing Homes Support Scheme) helps pay for long-term nursing home care. Your contribution is based on a financial assessment: up to 80% of your assessable income plus 7.5% per year of the value of your assets. Your home is an asset, but it is only counted for 3 years, so your contribution based on the home is capped at 22.5% of its value. The 7.5% on a home or land can also be deferred and paid from the estate after death.
If you or a family member is facing long-term nursing home care, Fair Deal is usually how it is paid for, and the treatment of the family home is the question most people worry about. Here is how it works.
How the financial assessment works
Under Fair Deal you contribute: - up to 80% of your assessable income, plus - 7.5% per year of the value of your assets.
For a couple, the assessment is based on half the combined means, so the rates effectively become 40% of income and 3.75% of assets. The State pays the balance of the cost of care.
The first €36,000 of assets (€72,000 for a couple) is disregarded, taken first from cash and then from other assets.
The family home: the 3-year cap
Your home is an asset, so it is included in the 7.5% assessment, but only for a limited time: - The home is counted for a maximum of 3 years. After that, no further contribution is based on it, even if care continues for much longer. - This means your total contribution based on the home is capped at 22.5% of its value (3 × 7.5%), or 11.25% for one member of a couple.
The same 3-year cap now also applies to a family farm or business in certain circumstances. This cap is the protection that stops the home being eroded indefinitely by the cost of care.
You can defer the home contribution (the nursing home loan)
You do not have to sell the home to pay the 7.5% on it. You can apply for the optional nursing home loan: the contribution based on your home or land is deferred and paid to Revenue after your death out of the estate. This lets the person stay in the scheme without the family having to sell or remortgage the home during their lifetime.
Renting or selling the home
- Renting it out: rental income from the home is assessable, though recent changes reduced how much of that rental income is counted. If you are considering renting rather than leaving it empty, check the current treatment first.
- Selling it (for example when downsizing earlier): once the home is sold, the proceeds become cash assets and are assessed at 7.5% without the 3-year cap, so the timing of any sale matters. See the downsizing guide, and get advice before moving assets around in anticipation of care.
Fair Deal interacts with inheritance, downsizing and tax in ways that are easy to get wrong. This guide is general information, not financial or legal advice. Confirm the current rules and rates with the HSE and a solicitor or financial adviser before making decisions.
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