Fair deal questions

DRice

Sorry to be a pain ,just a couple of quick questions for those in the know and experience of the scheme

My dad might have to get nursing home care and my mother is still alive and they are married. Is the calculation of the fee 7.5% of 50% of (combined assets less €72000) and 80% of 50% of combined income?
And PPR part of the asset calculation is only for 3 years?

If the answer to the above is yes ,how is it physically paid over ?. Basically what I am getting at here is mammy has no problem on the calculation being based on combined income but she doesn't want her pension taking any hit at source ie she wants dad to pay for every cent of the fee ,he has the higher income and assets anyway.

Thanks in advance need to reassure mammy.

Melendez

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DRice

Ah thanks Melendez thats perfect

One last question, the 7.5% of cash assets, is it reassessed every year do you know? For example say you had 100K in the bank one year, but you spent 15k on nursing home fees, is next years contribution based on your lower cash balance of 85K?

Melendez

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DRice

Melendez wrote: »

This is a question I asked as I could not find anything official. The answer I was given is that it is not reassessed by default, but you can request a reassessment if circumstances change. I didn't delve too deeply into what changing circumstances meant as it was going to make no difference for us until after three years when the primary residence fell out of the equation. Based on the answer I received, I see no reason not to request a reassessment every year if assets are depleting. It is probably best to get this answer up front, in writing, yourself though.

Fair enough ,it will be a huge deal for us as the cash savings will be used to pay the contribution so it will be depleting significantly. We have high cash savings but low income. If it was done on a straight line basis the cash would run out but reducing balance technically it will never run out as you are always paying 7.5% of the balance at the start of the year. I wouldn't be surprised if this was never considered by those that came up with the scheme and I always worry the people at the end of the phone don't know either hope I get a straight answer.

Uriel.

DRice wrote: »

Fair enough ,it will be a huge deal for us as the cash savings will be used to pay the contribution so it will be depleting significantly. We have high cash savings but low income. If it was done on a straight line basis the cash would run out but reducing balance technically it will never run out as you are always paying 7.5% of the balance at the start of the year. I wouldn't be surprised if this was never considered by those that came up with the scheme and I always worry the people at the end of the phone don't know either hope I get a straight answer.

My "guess" on this is that the original intention was that it would be 7.5% of the total cash asset applied per annum until death or until the money is gone. For example at 100k savings it would be 7.5k per annum every year. The reality of the Scheme is that it is a financial support Scheme so if money is available the person should be contributing as much as reasonable - I think that's its philosophy.

I'd say you will find that the legal people didn't make the connection between the reducing balance of the savings and the financial reassessment.

I've always wondered what happens in situations such as the above where the person has the savings, is paying 7.5% but during the course of the year spends some of the money. For example some people are paying a couple of thousand a year on additional charges plus actual living expenses such as presents for grandkids, newspapers, haircuts etc. You're not supposed to deprive yourself of an asset to put it beyond the State but surely you'd have to be allowed some reasonable living expenses. I think the scheme is silent on that.

DRice

Uriel. wrote: »

My "guess" on this is that the original intention was that it would be 7.5% of the total cash asset applied per annum until death or until the money is gone. For example at 100k savings it would be 7.5k per annum every year. The reality of the Scheme is that it is a financial support Scheme so if money is available the person should be contributing as much as reasonable - I think that's its philosophy.

I'd say you will find that the legal people didn't make the connection between the reducing balance of the savings and the financial reassessment.

I've always wondered what happens in situations such as the above where the person has the savings, is paying 7.5% but during the course of the year spends some of the money. For example some people are paying a couple of thousand a year on additional charges plus actual living expenses such as presents for grandkids, newspapers, haircuts etc. You're not supposed to deprive yourself of an asset to put it beyond the State but surely you'd have to be allowed some reasonable living expenses. I think the scheme is silent on that.

It's the first thing an accountant thinks of! Surely it was considered. They really should be explicit on this point and not leave us to ponder it here. Thanks Uriel