Terms and Definitions

You and your status

For the purposes of the scheme you, “the Applicant”, are either :-

  1.  A person who is single ( not living together as part of a couple), widowed,separated or divorced.
  2.  A person who is a member of a couple i.e married couples living together, cohabiting couples living together for 3 or more years  before the date of application, same sex couples living together for 3 or more years before the date of application.

Income

  • (a) Income from an employment, trade, profession or vocation.
  • (b) Rental income whether arising in the State or otherwise.
  • (c) Income from holding an office or directorship.
  • (d) Income from a pension ( whether  under the Social Welfare code or otherwise).
  • (e) Income whether in the nature of a benefit or allowance arising from Social Welfare, Social Insurance or other sources of a similar character.
  • (f) Income from fees, commissions, dividends, interest, or income of a similar character.
  • (g) Payments under a settlement, covenant, estate, or payments in respect of maintenance.
  • (h) Income from royalties and annuities.
  • (i) Distributions under an ARF , AMRF or similar pension type arrangement.
  • (j) Transferred income of a character described in (a) to (i) above.
  • (k) Such forms of income as may be prescribed under regulations under Section 36 of the Act for the purposes of this paragraph.

 

Allowable deductions from Income (for precise definitions refer to the Act).

  1. Income tax
  2. Social Insurance contributions.
  3. Levies required to be paid by law, USC, LPT etc.
  4. (a) Interest on monies borrowed in respect of the repair or improvement of the Applicant’s principal private residence OR   (b) Rent in respect of the principal private residence only insofar as there resides therein the Applicant’s partner or a child under the age of 21 of the Applicant or their partner. See also 7 below.
  5. Health expenses, less any tax relief which may be claimed by the Applicant,spouse or relative, but not health expenses in respect of care services.
  6. Payments made in respect of the maintenance of a child, spouse, former spouse of the Applicant under a separation agreement or Court Order , less any tax relief claimed in respect of such payments.
  7. As an alternative to 4 (a) above a deduction can be taken for repayments in respect of borrowings incurred for the purchase, repair or improvement of the Applicant’s principal residence (capital and interest). If this is claimed then the capital amount of the borrowings cannot be used as a deduction form the asset (SI631/2010)

Minimum Retained income Threshold

This is the minimum amount the Applicant keeps for themselves each year out of their total income

  1. For the purposes of the Financial Assessment of a single person it is 20% of the maximum State non-contributory pension ( This is allowed for in the Calculator)
  2. For a couple it is generally 120% of the maximum State non-contributory pension apportioned between the members of the couple ( This is allowed for in the Calculator)

There are , however, special circumstances where the partner of the Applicant is :-

(a) Receiving State financial support, where this is replaced by the assessed income of the partner.

(b) Habitually resident in a relevant facility or a nursing home where this is replaced by the amount the partner contributes under Section 67C (1) of the Health Act 1970 plus 40% of the maximum State non-contributory pension.

Neither (a) or (b) above are allowed for in the Calculator as each individual case will be different.

Transferred Income

The definition of this is quite precise in the Act but in essence it is any income which the applicant was entitled to receive and has by the actions of the Applicant or on behalf of the Applicant deprived the Applicant of the income in favour of another person within the assessable period or within 5 years of the date of application for State support.

Assets

Cash assets – Means cash , deposits, shares, stocks, bonds, or other financial instruments, money lent to another person which is repayable, and transferred assets which are cash assets

Relevant assets – Means all forms of property wherever situated, other than cash assets. This would include options and incorporeal property generally in which the relevant person has a beneficial interest and includes transferred assets which would have been relevant assets had they not been transferred.

Transferred assets – Means an interest of the Applicant in an asset  ( whether cash asset or relevant asset) which has been transferred at any time in the period of 5 years prior to the date on which the application for State aid is FIRST made by or on behalf of the Applicant.

  1. (a) for no consideration
  2.  (b) for nominal consideration
  3.  (c) for consideration which is less than 75% of the Estimated Market Value of the interest of the Applicant in the asset at the time of transfer but does not include a transfer in respect of any claim made in respect of maintenance of a child  or other matrimonial proceedings and that the Executive (HSE) is satisfied that the transfer was made for that purpose.

Transferred Asset Value – means the Estimated Market Value at the time of the transfer less the consideration received by the Applicant or the estimated market value of the consideration ( whichever is the higher).

Estimated Market Value is the price the asset concerned would fetch  on the date the application for State support is made subject to such conditions as might reasonably be calculated to obtain for the vendor the best price for the asset

Foreign Currency – If the asset is in a foreign currency or if the asset is situated in a place where the currency is not the currency of the State the value must be converted at the official conversion rate specified by the Central Bank of Ireland on the date the application for State support is made.

Principal residence means the principal private residence of the Applicant and includes land which the Applicant has for his or her own occupation and enjoyment with that residence as its garden or grounds up to an area ( exclusive of the dwelling house) not exceeding one acre.

 

Ancillary State Support ( Nursing Home Loan)

This is an optional step you take if you wish to apply for the Nursing Home Loan whereby you apply for additional assistance to enable you to pay your contribution where you may not have or wish to use other assets to pay.

This is a form of loan advanced to you , charged on your property assets in the State. Full details of the Ancillary State Support can be obtained from the HSE

The loan is built up as the State pays the nursing home for your contributions  and is repayable when :-

  • You die – it will be repaid from your estate
  • If you sell or transfer the property during your lifetime
  • If the HSE deems that false or misleading information has been given in your application for the loan.
  • You or your partner is adjudged a bankrupt.

A deferral of the timing of the repayment may be allowed if certain criteria are satisfied. Also, for some people, special rules regarding deferral exist in respect of the principal residence only.

There is a charge for the use of the funds advanced to you linked to the annual increase/decrease in the consumer price inflation (CPI) which is applied to the loan and is collected when the loan is repaid.

Delay in repaying the loan when due will result in interest being charged as follows :-

  1.  On the death of the person in care – must be repaid within 12 months or interest will accrue backdated to the date of death.
  2.  on the sale or transfer of the property during the Applicant’s lifetime – within 6 months of the date of sale or transfer or interest will accrue from that date of sale or transfer.