This Research Note concentrates only on the fees and charges aspects of the Reform Package. Since the announcement of the reform strategy in mid-1997 a number of adjustments have been made apparently as a result of protests against some of the proposed changes. The operator is entitled to retain all income derived from investment of the bond during the period the resident remains in the facility. It can be paid as a lump sum, a periodic payment or a combination of lump sum and periodic payment. The family home is not included in the calculation of net assets if the house is occupied by a partner or dependent child, or if a carer or close relative has lived in the house for the past two years and is eligible for a social security payment.
Residents have six months after entry to pay the bond.
The charge can only be levied for five years and must be calculated on a daily basis. With the agreement of the operator of the facility the payment of the charge can be deferred and paid from the resident's estate. The Government is presently talking to banks to encourage them to offer reverse mortgage facilities to allow residents to borrow against their homes to pay the charge. Where residents pay the charge by renting out the family home the rental income is not counted for pension purposes, or for income tested fees. Resident Daily Fees Table 2 gives brief details of the new Resident Fee arrangements.