The Nursing Homes Support Scheme (NHSS) is a system of financial support for those assessed as needing long-term nursing home care. Participants contribute to the cost of their care according to their means while the State pays the balance of the cost. The Scheme aims to ensure that long-term nursing home care is accessible and affordable for everyone and that people are cared for in the most appropriate setting.
Participants in the Scheme contribute up to 80% of their assessable income and a maximum of 7.5% per annum of the value of assets held. In the case of a couple, the applicant’s means are assessed as 50% of the couple’s combined income and assets. The first €36,000 of an individual’s assets, or €72,000 in the case of a couple, is not counted at all in the financial assessment. The capital value of an individual’s principal private residence is only included in the financial assessment for the first three years of their time in care.
The value of a person’s principal residence is only included in the financial assessment for the first three years that the person receives care services. This is known as the three year cap. In accordance with the legislation, a person’s principal residence is assessed on the basis of its estimated market value less allowable deductions as set out in the Nursing Homes Support Scheme Act, 2009. Under the Act, allowable deductions in respect of a person’s principal residence are borrowings incurred specifically for the purchase, repair or improvement of the asset concerned to such an amount that has not been repaid. The HSE must be satisfied that the purpose of incurring the borrowings was for the purchase, repair or improvement of the asset concerned.
The value of the allowable deduction in respect of a person’s principal residence is the value of the outstanding borrowings concerned. This amount can be deducted from the estimated market value of the property as part of the financial assessment. It is also open to a person to choose to avail of the allowable deduction in respect of their assessed weekly income should this option be more beneficial to them. The allowable deduction in respect of a person’s income is processed by either deducting interest on borrowings for the purchase, repair or improvement of the principal residence, or, the full weekly value of mortgage repayments from the person’s weekly income.
It is important to note that where an individual chooses the option to deduct the full weekly value of mortgage repayments from his or her income, he or she cannot also seek to offset the same mortgage against the value of the asset concerned by claiming the same deduction under the assessment of the value of the principal residence. In such cases the full estimated market value of the principal residence is included in the financial assessment.
