The nursing home loan is an optional part of the Fair Deal Scheme.
You can apply for it in addition to any financial support you get from Fair Deal.
How it works
With a nursing home loan, a person can delay paying for their care until after death using their assets to secure the loan.
The nursing home loan is an option if you:
- need nursing home care
- have assets including land and property
The amount you receive will depend on the value of your property.
When to apply
You can apply for a nursing home loan:
- when you apply for Fair Deal funding, or
- if you're already a resident in a nursing home
Your loan will be approved on the same date as your Fair Deal funding if you apply for them together.
If you're approved, you can always change your mind before accepting the loan.
Repaying the nursing home loan
The nursing home loan will need to be repaid after death. You can also choose to repay this any time before death.
You will need to repay the loan if:
- you sell or transfer your property (you must notify your local nursing home support office within 10 working days of the sale or transfer)
- you or your partner declare bankruptcy
- you provide false information in the application
The loan is repaid to Revenue Commissioners.
After the death of the person in care, the loan must be repaid within 12 months. If the loan is not repaid within 12 months, interest will be applied. The interest will start from the date of death.
We will notify the relevant person when the loan repayment is due. The final loan amount will have inflation or deflation added to it.
We have to add inflation or deflation by law. We use the consumer price index (CPI) to work out the rate of inflation that applies to your loan.
If their property (home) is sold or transferred when a person is still in care, the loan must be repaid within 6 months of the date of sale or transfer. Interest will be charged from 6 months after the sale.
How we work out the CPI amount
We have to add inflation or deflation to your final loan repayment when it becomes due. This is the law.
To do this we use data from the Central Statistics Office (CSO). They publish the updated rate of inflation on their website every month. It’s called the Consumer Price Index Amount (CPI).
The Consumer Price Index (CPI) measures the change in the prices we pay for goods and services over time. If the CPI goes up, this will change the value of a loan amount.
Calculating your CPI amount
To calculate your total loan repayment we work out the:
- CPI factor - the CPI rate for the month before your repayment became due divided by the CPI annual rate
- CPI annual amount - the value of your nursing home loan amount multiplied by the CPI factor
- Yearly loan repayable - the CPI annual amount added to the amount of nursing home loan that was repayable for each year
To work out the total loan repayable amount we add up all the yearly loan repayable amounts.
See the step-by-step calculation
- CPI rate for the month before your repayment is due ÷ CPI annual rate ＝CPI factor.
- CPI factor ✕ Amount of your nursing home loan ＝CPI annual amount.
- CPI annual amount + Amount of nursing home loan that was repayable for each year ＝Yearly loan repayable.
- Add up all the yearly loan repayable amounts + CPI annual amount for the current year ＝Total loan repayable amount.
Deferring repayment of the nursing home loan
The nursing home loan needs to be repaid after death. You can only delay repayment if the loan was secured against the person's main home (principal residence).
A partner, relative or connected person may apply to delay the loan repayment. They need to apply to the Nursing Home Loan Support Office.
People who may apply include:
- your spouse or partner
- your child under the age of 21 (or your spouse’s or partner’s child)
- your child if their assets do not exceed €36,000
- your sibling if their assets do not exceed €36,000
- a relative in receipt of a disability or similar allowance, blind person’s pension, or the State pension (non-contributory), or whose income does not exceed the State pension (contributory)
- a relative who is in receipt of a foreign pension or allowance similar to those outlined above
- a relative who owns a building to which the principal residence is attached (for example ‘a granny flat’)
- any person who cared for the person in care prior to them entering the nursing home (this is defined by relevant social welfare payments such as carer's allowance)
If payment is delayed, your loan will have inflation or deflation added to it. We have to do this by law.
We use the consumer price index (CPI) to work out the rate of inflation that applies to your loan.
People other than a spouse or partner are called 'connected persons'. They may apply for a deferral in loan repayment.
Connected persons must meet the following conditions:
- The house must be their only residence.
- They must have lived in the house for at least 3 years before the original application for the Nursing Home Loan.
- They must not have an interest in any other property.
If circumstances of the connected person change, the loan must be repaid. For example, if the property is sold or they longer live in the house.
Contact the National Nursing Home Loan Office for further information on 057 931 8400.
Couples and applying for a nursing home loan
All of the couple's assets are assessed. Both partners need to sign the application form if applying for a nursing home loan.
If either partner has reduced capacity to make decisions the other partner will need to be either a:
- decision making representative (a person appointed by Circuit Court)
- Ward of Court (a person appointed by Office of Ward of Courts)
- a holder of a registered enduring power of attorney (chosen to act on behalf of another person)
You need to have a registered enduring power of attorney in place before the person applying is unable to make decisions.