The Fair Deal Scheme (Nursing Homes Support Scheme) in Ireland is essentially a means-tested co-payment system for long-term nursing home care. The State pays the balance of the nursing home fee after calculating what the resident must contribute based on income and assets.
Below is the financial structure in precise terms.
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1. Core financial formula
The contribution is calculated using two components:
Income contribution
80% of assessable income for a single person.
40% of combined income if part of a couple.
Income includes:
State pension
occupational pension
salary or earnings
rental income
dividends, interest etc.
Certain deductions can reduce this income (tax, mortgage interest on the home, maintenance payments etc.).
Importantly:
The resident keeps 20% of their income for personal spending.
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2. Asset contribution
Assets are assessed annually.
Typical rule:
7.5% per year of total assets for a single person
3.75% per year for couples
Assets include:
savings
shares
land
property
businesses
farms
But the first portion is ignored:
€36,000 exempt (single)
€72,000 exempt (couple)
This exemption is applied first to cash assets.
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3. Treatment of the family home
This is the part most people focus on.
The home is treated differently:
7.5% of the home value per year
only charged for 3 years
So the maximum charge is:
22.5% of the home's value.
Example:
House value: €400,000
Annual contribution from house:
7.5% = €30,000
Over three years:
€90,000 maximum.
After year 3:
the house no longer counts in the assessment.
This rule also applies to farms and businesses in many cases.
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4. Nursing home loan (Ancillary State Support)
Many people cannot pay the asset contribution immediately.
The scheme allows a state loan secured against property.
This is called Ancillary State Support.
Mechanism:
The HSE pays the contribution linked to the house.
The amount becomes a loan against the property.
Repaid after death or when the property is sold.
In effect:
It allows people to enter care without selling the family home immediately.
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5. Who pays the nursing home?
The payment works like this:
Resident pays:
80% of income
+ 7.5% of assets per year
If the nursing home costs more than this:
The State pays the remainder.
Example:
Nursing home cost: €1,200/week
Assessment says resident must pay: €350/week
State pays: €850/week.
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6. Important financial protections
Several protections exist.
Asset protection
First €36k ignored.
Home cap
Home only counted for 3 years.
Spouse protection
If a spouse still lives in the home:
assessment uses half of the couple's assets and income.
Gift rules
Assets transferred within 5 years may still be counted.
This prevents people from transferring property to avoid the scheme.
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7. What Fair Deal does NOT cover
Residents still pay for some personal costs:
Examples:
hairdressing
personal toiletries
clothing
newspapers
optional services
These are expected to come from the 20% income retained.
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8. Why the scheme exists economically
Ireland’s nursing home costs are typically:
€1,000–€1,600 per week.
Without the scheme:
Annual cost could exceed €60k–€80k per year.
The Fair Deal structure spreads this cost between:
1. the individual
2. their assets
3. the State.
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✅ In short
Financial rule:
Contribution =
80% income
+ 7.5% of assets per year
(home capped at 22.5%)
The State then covers the remaining nursing home cost.
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