The Minister of State for Mental Health and Older People Mary Butler TD has welcomed the commencement of Part 9 of the Regulation of Providers of Building Works and Building Control (Amendment) Bill 2022, which will increase the amount of rental income that nursing home residents can retain under the Fair Deal from 20% to 60%.
The Government committed to making this change under ‘Housing for All’ to remove a disincentive to renting out the vacant home of a resident in long-term nursing home care under Fair Deal. It is estimated that this measure will bring between 400 and 2,000 rental properties into use, at any one time, once fully established.
The Nursing Homes Support Scheme, also known as Fair Deal, has been in operation since 2009 and applies to approved public, private and voluntary nursing homes. As of September 2022, there were 22,490 people participating in the Scheme at an annual net cost of just over €1 billion. Over half of these residents continue to own their homes after they have entered care. Although many of these homes are occupied by spouses or other family members and friends, some are left vacant for the time that a resident is in care.
At present, when people apply to the scheme, their financial assessment sets out how much they will pay towards the cost of their nursing home care. Residents in the Scheme contribute up to 80% of their assessable income and a maximum of 7.5% per annum of the value of their assets.
This amendment was enacted on 6 July 2022 and is now ready to be implemented as revised processes, systems and documents have now been put in place by the HSE. Residents in Fair Deal who choose to rent out their vacant home, will now be assessed at 40% of their rental income instead of 80%. This means that residents can keep 60% of the income instead of 20%.
Minister Butler said:
“I welcome this new legislation, developed in collaboration with the Department of Housing, Local Government and Heritage under Housing for All, which aims to remove disincentives against the rental of the home owned by participants in the Fair Deal that might otherwise remain vacant. A reduction in assessment to 40% delivers this in a way that is equitable, evidence-based and provides appropriate safeguards for vulnerable older people.”
Minister Butler continued:
“These measures will allow residents in Fair Deal to keep more of their income and will also address pressures on the rental market. It is important that residents who choose to rent out their homes do so in a safe and supported way. Safeguarding, capacity issues and the wellbeing, safety and comfort of nursing home residents remains my priority.”
The change in the assessment rate takes effect from 01 November 2022.
An application form to avail of this is on hse.ie or at the Nursing Home Support Scheme Offices. Copies of the documents below are required together with the application:
- Residential Tenancies Board Registration Approval Letter
- Rental Agreement showing the rental amount
- Latest Notice of Assessment from Revenue
If a home is not registered with the Residential Tenancies Board, it may still qualify for the reduced rate of 40% on home rental income. The Residential Tenancies Board can advise on the specific instances where this applies.
Any rental income received from a property which is not from a principal residence will continue to be treated as general income and assessed at 80%.