Can we rent out the family home under the Fair Deal Scheme?
If your relative is in a nursing home they have to pay 7.5% of their assets yearly and 80% of their income to the Fair Deal Scheme.
If the family rents out the family home they will forfeit 80% of the rent to the scheme. So it’s probably not going to be worth it depending upon your individual circumstances. It is now possible to sell the family home without being penalised in relation to the 3 year cap.
As things stand families who are in the Fair Deal Scheme do not want the bother of renting out a house and then having to pay 80% to the Fair Deal scheme. That would not make a lot of sense. The problem is that many houses belonging to older people are lying vacant. If the Fair Deal scheme reduced the tax on rental properties then families might decide to rent their houses. Take for example an estate that was built in the 1970s – young families moved in and the place was full of life. Now that we are in the 2020s many of those mothers and fathers are elderly – in their eighties and some have had to go to nursing homes. That means that the estate may grow neglected.
Personally I think that it would be a good idea to rent the houses, even if they were to yield €1000 per month that is €12,000 per year. The Minister of State for Older People is afraid that unscrupulous adult children will try to force their parents to go into senior living so that they can rent out the house. That is a possibility but if the rental income goes into the parent’s bank account that will reduce the risk of elder abuse.
Can we rent out the family home under the Fair Deal Scheme? The Fair Deal scheme is complicated and how you approach it depends on your health and your financial circumstances ie income and assets. If your relative needs eldercare and/or is suffering from dementia and you need help with completing the Fair Deal application form book at consultation at www.emerlavineldercare.ie today.