The fair deal process and applications of diminished capacity.
Applications for financial support can be made to help pay for the cost of care in a nursing home through the Nursing Homes Support Scheme, also known as the Fair Deal scheme. Under Fair Deal, you pay a certain amount towards the cost of your care and the HSE pays the rest.
When an application is made, the individuals care needs must be assessed by the HSE to confirm that long-term nursing home care is the most appropriate option. Furthermore, the financial situation is also assessed by the HSE to see how much each applicant can pay towards the cost of nursing home care.
There are 3 steps to the Fair Deal application process:
Step 1: Care Needs Assessment
Step 2: Financial Assessment
Step 3: Apply for Ancillary State Support a Nursing Home Loan (this step is optional).
For the purposes of this article, I am going to focus on Steps 2 and 3 from the point of view of navigating the Fair Deal application process on behalf of a family member with reduced capacity.
Step 2: Financial Assessment
The Financial Assessment works out how much an applicant can pay towards nursing home care and in doing so looks at all of the applicant’s income and assets.
Income and assets
Income includes any:
- Social welfare benefits or allowances
- Rental income
- Income from holding an office or directorship
- Income from fees, commissions, dividends or interest
- Transferred income (any income that was transferred to someone else within 5 years of the application)
An asset is any material property or wealth, including property or wealth outside Ireland.
Assets are divided into 2 categories, cash assets and non-cash assets.
Cash assets include:
- Savings and deposits
- Stocks, shares, securities and other financial instruments
- Approved retirement funds (value of fund at the date of the application)
- Money loaned to another person
- Cash assets transferred to another person in the last 5 years
Non-cash assets include:
The applicant’s home (if owned or part-owned)
Any property or land
Overseas land and property
If you are helping someone with reduced decision-making capacity to apply for Fair Deal, then you need to be a specified person. A specified person may apply on behalf of a person needing care if they are unable to apply themselves.
A specified person is:
A. Your Committee, if you are a ward of court.
B. A person appointed under an enduring power of attorney- it is important to note that the enduring power of attorney would have needed to be executed by all parties at the time the applicant had full mental capacity to do so (as evidenced by supporting medical documentation at that time).
C. A Care Representative appointed by the Courts.
D. Applicant’s spouse or partner.
E. A relative over the age of 18.
F. A ‘next friend’ appointed by a court.
G. The applicant’s legal representative.
H. A registered medical practitioner, nurse or social worker.
A-C have first priority over D-H which means that they have the right to act as a Specified Person ahead of the others. However, A-C may consent in writing to a person with lesser priority acting as the specified person.
Where a person has reduced ability to make decisions and wishes to apply for the Nursing Home Loan, only the people listed at A-C above may make the application.
STEP 3 Nursing Home Loan
In order to apply for a Nursing Home Loan written consent to having a Charging Order registered against the specific asset must be provided. The Charging Order is a simple type of mortgage which secures the money loaned by the HSE. Subject to the applicant’s consent, the HSE is responsible for making the Charging Order, registering it against the asset and making Nursing Home Loan payments on their behalf. If a person does not have the capacity to consent to the Nursing Home Loan and the Charging Order, a Care Representative will need to be appointed to act on his/her behalf.
A Care Representative is only required when a person has reduced capacity to make certain decisions (that is, diminished mental capacity) and wishes to apply for the Nursing Home Loan. The Care Representative is appointed by the Circuit Court. Two reports from two separate registered medical practitioners are required by the court as evidence that a person is of diminished mental capacity. Their role is to act on behalf of the person in respect of the Nursing Homes Support Scheme and especially in respect of the Nursing Home Loan. The list of people who can apply to be a Care Representative is set out below.
Persons who can apply for appointment as a Care Representative
The following persons, in order of priority, may apply to be appointed as a Care Representative once they are 18 years of age or over:
1. A spouse/partner
2. A parent
3. A child
4. Brother or sister (whether a full or half sibling)
5. Niece or nephew
6. A grandchild
7. A grandparent
8. An aunt or uncle
9. A person who appears to the court to have a good and sufficient interest in the individual’s welfare.
Procedure for appointment as a Care Representative
The application for appointment must be made to the County Registrar in any county in the Circuit in which the person requiring a Care Representative now lives or in which he/ she has lived at any time during the past three years.
Exemptions to requirement for appointment as a Care Representative
A Care Representative is not needed in order to apply for the Nursing Home Loan in any of the following cases:
- Where the applicant is of full mental capacity
- Where the applicant is a Ward of Court (in such cases the Committee of the applicant may apply where he/she has been authorised to do so by the President of the High Court)
- Where a person is appointed under a valid, registered enduring power of attorney to act on behalf of the applicant, such EPA having been executed by the applicant when they had full mental capacity and registered with the High Court when they no longer had capacity, thereby authorising the
- Attorney to act on their behalf.
- Where another person is already permitted by law to act on behalf of the applicant
Finally, it is worth mentioning proposed changes in that new legislation is being drafted aimed at encouraging people who are part of the Fair Deal scheme to rent their homes as part of a renewed effort to address the housing crisis. Under the scheme at present, a nursing home resident must hand over 80% of all rental income raised from their main residence to pay for their care. Up to now many families made the decision that it was in their best interest financially to leave the property vacant rather than to let same out. However, Cabinet has agreed to change the rule governing rental income under the Fair Deal scheme and have proposed that nursing home residents who are part of the Fair Deal scheme will be able to keep 60 percent of rental income raised from their family home.