My mum owns the house in which I have lived with her since birth. My seven-year-old has also lived here since her birth. This is mine and my son’s only house.
If my mum has to go into a nursing home and if she passes, can we still keep our house (which has been left to me in my mum’s will).
Ms C.B.
This is one of the things that concerns people about the Fair Deal system where the State subsidises the basic cost of long-term nursing home care. Apart from taking a contribution from the income of nursing home residents, they also require a contribution against the value of the person’s home.
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It is seen as an asset and in the same way that Fair Deal deems a person’s assets in excess of €36,000 as liable to a 7.5 per cent charge, they see the family home as subject to that same charge – at least for the first three years they are in care.
And as very few people who will be applying for Fair Deal have the sort of loose cash around to meet that charge out of cash resources, it normally involves the HSE putting a charge against the family home for what the amount due under a nursing home loan.
The big question, as you say, is what happens when the person dies? Does that charge fall due and what does that mean for you and your son?
This is a property you stand to inherit under your mum’s will, you say. And as you have been living with her the whole time and have no other property, you would benefit from what is called the dwelling house exemption on that inheritance, meaning you would not pay any inheritance tax on the property regardless of its value.
That assumes, of course, that you continue to live there for a further six years but as you have no other home, I assume this would be the intention anyhow.
But there remains a charge on the property. If your mum survives for three years or longer, HSE is due 22.5 per cent of the value of the property. If she dies before the three years, the charge is 7.5 per cent for each year that she is in care, or pro rata. And Revenue will come looking for that money when your mum dies.
Under normal circumstances, you have a year to pay any money owing to the HSE under Fair Deal within a year of your mum dying, or six months of selling the house if you (or she) did that at any point.
But certain people can seek a deferral of this payment.
Most usually this will be a spouse or partner who is still living in the home while their partner has gone into care. But the deferral also covers other people. These include their children – but only where that person’s assets are less than €36,000 – who might move into the home.
It also includes relatives in receipt of disability allowance or similar payment, the blind pension or a (means tested) non-contributory State pension. If your income does not exceed the contributory State pension – currently €277.30 a week – you can also apply for a deferral.
If you were caring for your mum before she went into long-term nursing home care, you would also be eligible to apply for a deferral of payment of the loan. But it is not enough that you were a carer in practical terms: you will need to qualify for a relevant welfare payment, like the carer’s allowance. That might exclude many who are functionally caring for a relative or friend.
I am not sure you are going to qualify to delay repayment of the loan under any of those reliefs. But that doesn’t mean you are going to be forced from what has been your home for all your life.
There is a separate ground for deferral open to what are called “connected people”. These are expressly people other than a spouse or partner.
There are three basic conditions here and as far as I can see from your letter, you meet them.
First, the home needs to be your only residence. In the case of you and your child, you say this is the case. You must also have lived there for at least three years before any application for Fair Deal State support is made should your mum need to go into long-term nursing home care. Again, you appear to comfortably meet this condition.
Finally, you must not have any financial or other ownership interest in any other property. I am assuming this is the case for you.
So what does this mean for you?
It means that if your mum needs nursing home care, she can ensure she gets the care she requires without worrying that it might mean you being thrown out of the only home you have ever known. Yes, she will most likely have an obligation to repay a loan taken out against her home to meet part of the cost of that care, but you can seek to have repayment of that loan deferred.
Should that arise, you will need to contact your local nursing home support office to arrange the deferral: it won’t just happen. As I suspect you will be deemed the “relevant person” in any Fair Deal loan application – essentially the person responsible for repaying any money due after the eventual death of your mother – the HSE and Revenue would be in touch with you anyway so that should prompt any application for deferral.
However, the bottom line is that the money is still due for repayment. It doesn’t simply go away. Even though you would have inherited the home, it is still liable to the charge for the outstanding loan.
If you sell the property down the line or move out of it for any other reason, the loan will fall due. If you were to die there, again, it would fall due. And in the meantime, the outstanding loan will be attracting interest at the prevailing rate of the consumer price index – the basic measure of inflation.
But the reassuring news for you is that you will still have a home to live in even if your mother does require nursing home care under Fair Deal.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to dominic.coyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice
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