Fair Deal Application

5 Tips for a successful Fair Deal Application

  1. There are changes coming in relation to the amounts taken if one has a family farm or a family business. At present there is no cap on the 7.5% levy which applies to dwellinghouses for the above categories.  If you transfer any property or money away from yourself within five years of you applying for the scheme Revenue can “claw back” this asset or money in calculating your net worth. This is proposed to change in 2018.
  2. In November 2017 a three year cap of 7.5% levy on a house doesn’t apply to farmlands and businesses unless the applicant gets disabled or ill without notice and there is a successor available for the business or farm.
  3. Am I wise to apply for Fair Deal?                                                                                                             Example :   John is a widower and needs nursing home care.  His house is valued at €250,000.00 and his pension is €18,000.00 per annum.  He has savings of €50,000.00.  Is he better availing of the Fair Deal Scheme or paying privately for a home costing €1,250.00 per week (€65,000.00 per annum)?
    Option 1Pay privately with 20% tax relief – Annual cost €52,000.00

    Option 2

    Pay privately with 40% tax relief – Annual cost €39,000.00

    Option 3

    Fair Deal income contribution €18,000.00 by 80% = €14,400.00 per annum (80% of pension taken by the State)

    As John has a house worth €250,000.00 and there is a cap after taking 7.5% of the value for three years this gives €18,750.00 for each of three years.  His savings are also taken into consideration.  He is given an allowance of €36,000.00 before the calculation of 7.5% of the balance for three years is taken from him.  That is €1,050.00 per annum annual cost.  He therefore pays €34,500.00 per annum for three years and €15,450.00 per annum thereafter.

    In summary John is better off taking the Fair Deal Scheme.  The house contribution can be deferred until after he passes.

4. The State support which is attached to the dwellinghouse is recoverable by the Revenue Commissioners and must be paid strictly within one year of the date of death of the person who was in receipt of the Fair Deal Scheme.

5. The sale of the house to pay back the Revenue can be postponed for some reasons as follows.

It is the sole residence of a connected person who does not have any other residence.

This person has resided in the property for not less than three years immediately preceding the date of the request for payment.

The application to remain in the house is made not later than three months after the death.

If a connected person meets the criteria they can remain in the house until their own death after which the amount is still payable.

 

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