The Fair Deal nursing home loan (ancillary state support) explained

The Fair Deal nursing home loan (officially “ancillary State support”) lets the HSE pay the part of a person’s nursing home contribution that is based on their property, so the family does not have to sell the home or find the money during their lifetime. The charge is 7.5% of the property’s value a year, capped at 3 years (22.5%) for the home. The loan is adjusted for inflation and repaid to Revenue after death, within 18 months since September 2026, or within 6 months if the property is sold first.

In short

• What it covers: only the property-based part of the Fair Deal contribution, 7.5% a year of the value of land and buildings in the State. It never covers the 80% income contribution or charges on savings.
• The cap: the family home counts for 3 years at most, so the most it can cost is 22.5% of its value (11.25% for a couple).
• No interest if repaid on time. The amount is adjusted by the Consumer Price Index (CPI) instead.
• Deadline: 18 months after death (raised from 12 months by S.I. No. 193 of 2026, in force from 5 September 2026), or 6 months after a sale or transfer during life.
• Late payment: interest of 0.0219% a day (about 8% a year), charged from the date of death or sale, not from the deadline.
• Sale or rental: sale proceeds are covered by the 3-year cap since October 2021, and rent from the home has been fully exempt since February 2024.

How the loan fits into Fair Deal

Under Fair Deal (the Nursing Homes Support Scheme), your contribution has three parts: 80% of assessable income, 7.5% a year of cash assets, and 7.5% a year of property and land, with the first €36,000 of assets ignored (€72,000 for a couple). Our Fair Deal guide explains the full assessment. This guide is about the third part.

Many older people own a home worth a few hundred thousand euro but have a modest pension. The property part of their contribution can be far larger than their income. The nursing home loan solves that cash-flow problem. The HSE pays the property part to the nursing home each week, and a charging order, a simple type of mortgage, is registered on the property to secure the debt. Revenue collects the money later on the HSE’s behalf.

The loan is optional. You can apply with the Fair Deal application or later. If you apply together, the loan is paid from the same date as Fair Deal funding. If you apply later, it is paid only from the loan approval date. The HSE warns that loan approval can take several months, and you can still decline the loan once it is approved.

How much can be borrowed: worked examples

The HSE applies the €36,000 disregard to cash assets first and then to property. That matters for how big the loan is.

After three years, the home drops out of the assessment and the weekly contribution falls to the income part plus any charge on remaining savings. If Pat or Nora were part of a couple, the rates halve: 3.75% a year and 11.25% in total.

The cap protects only the home (and, on application, a family farm or business with a family successor, see the HSE’s 3-year cap page). A second property, such as a holiday home or rented flat, is charged at 7.5% every year with no cap, and the loan on it keeps growing.

Repaying the loan

When it falls due

The loan becomes repayable on the first of these “relevant events” under the Nursing Homes Support Scheme Act 2009:

• the death of the person in care;
• the sale or transfer of any part of the charged property;
• bankruptcy of the person or their partner;
• a finding that false or misleading information was given in the application.

You can also repay any time before that.

Deadlines and the September 2026 change

The 2009 collection regulations gave families 12 months after death to pay. S.I. No. 193 of 2026 extended this to 18 months from 5 September 2026, and the HSE now quotes 18 months. Revenue’s own guidance pages may still show the old 12-month figure. If the person died before 5 September 2026, check which deadline applies with the Nursing Homes Support Office. If the property is sold or transferred during life, the deadline is 6 months from the sale or transfer.

Inflation, not interest

The HSE adds CPI inflation (or deflation) to each year’s loan amount up to the day it is repaid, using Central Statistics Office figures. On a loan built up over three years and repaid a year or two later, this can add a few per cent.

Interest if you pay late

If payment misses the deadline, interest is charged at 0.0219% a day, roughly 8% a year, and it is backdated to the date of death or sale. That backdating is the trap. Example: a €50,000 loan paid in month 19 instead of month 18 attracts interest for about 578 days, not 30: around €6,300. Executors should treat the deadline as fixed.

How it is paid

When the loan falls due, the HSE tells Revenue the amount and the “relevant accountable person”, usually the personal representative named at application. Revenue then writes to them. Payment is made through myAccount or ROS, or by bank draft to the Collector-General quoting the person’s HSE client ID. Once paid, the HSE removes the charging order.

Two protections for families:

• An executor’s liability is limited to the value of the estate, less funeral and testamentary expenses. Personal assets are pursued only for fraud or if the estate is distributed without the HSE’s written consent.
• Repayments of the loan can be claimed as a health expense for tax relief, by the person or by the executor against the deceased’s income tax, if there is tax to relieve.

The estate must not be distributed before the loan is repaid unless the HSE agrees in writing.

Deferring repayment if family live in the home

Repayment after death can be deferred only where the loan is secured on the person’s principal residence. The person applying to defer must have lived in the house as their only home for at least 3 years before the original loan application and must not have an interest in any other property. The HSE says they can be:

• the spouse or partner of the person who had the loan;
• a child under 21 (or the spouse’s or partner’s child);
• a child or sibling whose own assets do not exceed €36,000;
• a relative getting a disability or similar allowance, the Blind Pension or State Pension (Non-Contributory), or with income no higher than the State Pension (Contributory);
• a relative who owns a building attached to the home, such as a granny flat;
• a carer who looked after the person before they went into the nursing home, shown by a payment such as Carer’s Allowance.

The deferral ends if the house is sold or the relative stops living there. CPI is added up to that date. Applications go to the HSE Nursing Homes Support Scheme Office in Tullamore.

If you sell or rent the home: the 2021 to 2024 changes

Selling the home

Before 20 October 2021, selling the home while in care meant the cash proceeds were assessed at 7.5% a year with no cap. The Nursing Homes Support Scheme (Amendment) Act 2021, in force from 20 October 2021, changed that. The proceeds of selling the principal residence are now covered by the 3-year cap, so a sale no longer pushes the contribution up after three years in care. If part of the money buys a new, cheaper home for the person or their partner, the cap protects the difference left over.

Any sale must be reported to the Nursing Homes Support Office within 10 working days, and an outstanding loan is then due within 6 months.

Renting the home

From 1 November 2022, rent from the person’s home was partly disregarded. A 2023 order, S.I. No. 618 of 2023, reduced the share counted to 0% from 1 February 2024. Today, rental income from the principal residence can be made fully exempt from the assessment. You apply on the HSE’s Principal Private Residence Rental Income form, with the Residential Tenancies Board registration letter, the rental agreement and the latest Revenue notice of assessment. Rent from any other property still counts as income at 80%.

Renting out the house does not end the 3-year cap or the loan. The home still counts as an asset for the first 3 years, but the rent can help the family repay the loan later.

Should you take the loan?

The loan suits people whose wealth is mostly in their home. It is a poor fit if there is enough cash to pay the contribution comfortably, because the loan’s inflation link means the debt can grow. Questions to settle as a family:

• Who will be the accountable person, and do they understand the 18-month deadline?
• Will anyone live in the home and qualify to defer?
• Could renting the home (rent exempt) or selling it (proceeds capped) work better?
• Is there a registered enduring power of attorney or decision-making representative in place? Both partners must sign a couple’s application, and someone with reduced capacity needs a legal representative.

Once funding is lined up, see our checklist for choosing a nursing home, typical nursing home costs in Ireland, and how to read HIQA inspection reports. If your parent is still at home for now, our guide to HSE home support explains how to apply.

Frequently asked questions

How long do you have to repay the Fair Deal loan after death?

18 months from the date of death. S.I. No. 193 of 2026 extended the old 12-month limit from 5 September 2026; if the death was before that date, check with the Nursing Homes Support Office which limit applies. If the full amount reaches Revenue within that time, no interest is charged. If it is late, interest at 0.0219% a day (about 8% a year) runs from the date of death, not from the deadline.

Is there interest on the Fair Deal nursing home loan?

Not as long as it is repaid on time. The loan is instead adjusted for inflation using the Consumer Price Index, so the amount repaid can rise or fall with prices. Interest only arises if the repayment is late: at 0.0219% a day, backdated to the date of death or the date the property was sold.

What is the maximum you can owe on the nursing home loan?

For a single person, the charge on the home is 7.5% of its value a year for at most 3 years, so 22.5% in total. For a couple, it is 3.75% a year, so 11.25%. The loan cannot exceed that property-based part of the contribution, plus the inflation adjustment. Other property, like a holiday home, is not capped.

Do you have to sell the house to repay the Fair Deal loan?

No. The loan can be repaid from any money in the estate, such as savings or life cover, or by the family. Selling is one option. If a spouse, partner or qualifying relative still lives in the home, they may be able to defer repayment until they die or leave.

What happens to the Fair Deal loan if the house is sold while my parent is alive?

The loan becomes repayable within 6 months of the sale or transfer, and you must tell the Nursing Homes Support Office within 10 working days. Since 20 October 2021, the proceeds of selling the home are protected by the 3-year cap in the same way as the home itself.

Is rent from the family home counted under Fair Deal?

Not since 1 February 2024, if you apply. Rental income from the person’s main home can be made fully exempt from the financial assessment using the HSE’s Principal Private Residence Rental Income form. Rent from any other property still counts as income, and 80% of it goes towards the contribution.

Can my parent get the nursing home loan if the house is abroad?

No. The loan must be secured on property in the State. A home in Northern Ireland or abroad still counts in the financial assessment, but the contribution on it would have to be paid during life rather than deferred.

Sources

• HSE: Nursing home loan
• HSE: 3-year cap on homes, farms and businesses
• HSE: Fair Deal financial assessment
• S.I. No. 193 of 2026: Collection and Recovery of Repayable Amounts (Amendment) Regulations 2026
• S.I. No. 436 of 2009: Collection and Recovery of Repayable Amounts Regulations 2009
• S.I. No. 618 of 2023: Modification of Assessment of Eligible Rental Income Order
• Nursing Homes Support Scheme (Amendment) Act 2021, s. 33
• Nursing Homes Support Scheme Act 2009, s. 26
• Revenue: Nursing home (Fair Deal Scheme) loan
• Revenue: Interest on late payments

General information, not legal, tax or financial advice. Figures checked October 2026.

Reviewed by The Care Panel team on 29 October 2026. This guide is general information about care in England, not legal, medical or financial advice. Rules and rates change; check with your council or an adviser before making decisions.