This is the largest financial decision most Irish families ever face and it is usually made in a hurry, in a hospital corridor, by people who have never heard the rules. The scheme is more generous than its reputation, and the parts that cost families money are almost always the parts nobody mentioned.
Quick facts
- You pay
- 80% of income + 7.5% of assets a year
- Couples
- 40% of income + 3.75% of assets each
- Ignored
- First €36,000 of assets, or €72,000 for a couple
- Your home
- Counts for 3 years only, then drops out automatically
- The loan
- Defers the property share until after death
What you actually pay
Two numbers do most of the work: "80% of your income (less the deductions above)," and "7.5% of the value of your assets per year".
Before the asset figure bites, there is a cushion. "The first €36,000 of your assets, or €72,000 for a couple, are not counted in the Financial Assessment."
Couples are assessed on half of everything: "If you are part of a couple, you will contribute half of the amounts above, that is, 40% of your income and 3.75% of the value of your assets per year." A couple here means a married couple living together, or a couple living together as life partners for at least three years. Two relatives sharing a house do not count.
The HSE pays the gap. Citizens Information's own example: "For example, if the total weekly cost of your care is €1,000 and your weekly contribution is €300, the HSE will pay €700."
- Income tax, USC, PRSI and legally required levies come off before the 80% is worked out.
- So does interest on a loan for buying, repairing or improving your home.
- The net value of an asset is what counts — the value minus any borrowing used to buy or improve it.
The three-year cap — the rule families most often do not know
The fear that keeps people out of Fair Deal is that the family home will be eaten away year after year. It will not.
"Some assets are only included in the financial assessment for the first 3 years you are in care. This is known as the '3-year cap'." It covers your home, the proceeds of selling it, and a family farm or business.
So the maximum the home can ever contribute is three years of the 7.5%, and for a couple it is stated outright: "Your total contribution over the 3 years is capped at 11.25% of the property's value." "If both partners are in care, the total contribution is capped at 22.5%."
Nothing has to be applied for. "Your home will be removed from your financial assessment after you have been in care for 3 years. You do not need to do anything."
The cap applies whether or not you take the loan, and if somebody has already been in a nursing home for three years when they apply, they do not pay the 7.5% on the home at all.
The Nursing Home Loan — why nobody has to sell a house
If the assets include land or property, you do not have to find the cash. "If your assets include land or property, the 7.5% contribution based on these assets may be deferred and paid to Revenue after your death."
That is the optional Nursing Home Loan. The contribution still accrues, but it is settled from the estate rather than from a forced sale while somebody is alive and in care.
Where a couple is involved, the surviving partner can apply to defer repayment of the loan for their own lifetime, so the house is not sold out from under them either.
One hard precondition applies to both routes: "You must be assessed as needing nursing home care to be eligible for either State support or the Nursing Home Loan."
If the house is rented out, this changed in 2024
This is recent enough that a lot of advice still has it wrong. "Since 1 February 2024, if you own your home and are renting it out to a tenant while you are in a nursing home, you can apply to keep 100% of this rental income, instead of having to pay some of it towards your nursing home care."
It is not automatic — you apply, using the Principal Private Residence Rental Income form, and send the Residential Tenancies Board registration letter, the rental agreement and your latest Revenue notice of assessment.
It only covers the person's own home. "If the property you are renting is not your own home, you must pay 80% of the rental income to nursing home care."
What Fair Deal does not cover
The scheme pays for accommodation and food, nursing and personal care, laundry, and basic aids for everyday living. It does not pay for everything a nursing home charges for.
It excludes "Short-term care such as respite, convalescent or day-care", and it excludes "Extra fees charged by the nursing home for services like hairdressing, therapies or activities".
Those extras are where families get an unwelcome surprise, sometimes hundreds a month, and the timing of the conversation matters: "You must agree with your nursing home about these extra costs before you go into the nursing home (your admission date)." Ask for the list of additional charges in writing before anyone moves in.
Applying, and the two waits to plan around
Four steps: the form, a Care Needs Assessment, a Financial Assessment, then the optional loan. The care assessment decides whether nursing home care is the right option at all; the financial one decides what you pay.
After the care assessment, "After they make a decision, the HSE will write to you within 10 working days."
If the answer is no, the wait is long: "If you do not qualify for long-term nursing home care, you must wait 6 months before you can apply again." You can reapply sooner if health or circumstances change.
If somebody is in hospital and no longer needs acute care, apply as early as possible — they can be charged for long-term care in the hospital in the meantime, and in limited cases the HSE will fund a private nursing home place while the application is processed under Transitional Care Funding.
- Do not move assets around first. "The assessment will look at assets that you have transferred since applying for State support or in the 5 years before the application." Gifting a house to a child does not take it out of the assessment, it just complicates things.
- For a family farm or business to get the three-year cap, "You must apply to the HSE to appoint your family successor who will commit to running the farm or business for at least 6 years", and it must have been actively run for three of the last five years.
Common questions
Will Fair Deal take my parent's house?
No. The home is only counted for three years, at 7.5% of its value a year, and after that it drops out of the assessment automatically. For a couple the total contribution from the home is capped at 11.25% of its value. And the contribution based on property can be deferred and paid to Revenue after death through the Nursing Home Loan, so nobody has to sell a house to fund care.
How much do you pay under Fair Deal?
80% of your income and 7.5% of the value of your assets a year, after the first €36,000 of assets is disregarded, or €72,000 for a couple. If you are part of a couple you pay half of both — 40% of income and 3.75% of assets.
Does Fair Deal cover respite or day care?
No. It covers long-term nursing home care only. Respite, convalescent care and day care are all excluded, as are extra nursing home charges for things like hairdressing, therapies and activities.
Can I rent out the house while my parent is in a nursing home?
Yes, and since 1 February 2024 you can apply to keep 100% of the rental income from their own home rather than paying a share of it towards care. You have to apply for it with the RTB registration letter, the rental agreement and a Revenue notice of assessment. A property that is not their own home is still assessed at 80% of the rental income.
Should we transfer the house before applying?
It will not help. The financial assessment looks at assets transferred in the five years before the application, and at anything transferred after applying. Given the three-year cap and the loan, transferring usually creates problems without reducing the contribution.
What happens if the care needs assessment says no?
You normally have to wait six months before applying again, unless health or circumstances change in the meantime. You can also appeal the decision, and the HSE has to give you a copy of the report and the reasons.