Long Term Care
Long Term Care plans are designed to cover the cost of caring for elderly individuals who are unable to carry out a number of activities of daily living (ADLs). Normally, claims are met if the client cannot perform 2 or more of the ADLs.
ADLs usually include:
- feeding yourself
- washing and bathing yourself
- dressing yourself
- using the toilet
The benefits of the plan are designed to meet the cost of nursing home fees and in some cases providing nursing care in the client’s own home. The reason for these plans being introduced in the early 1990’s is because the income support provided by the State is limited to the guaranteed minimum income. Also, State support is now means tested and is not freely available to all elderly clients.
The level of benefit is agreed at the time the plan is taken out and can be funded on either a regular basis or with a lump sum, perhaps from the sale of a house. The amount of benefit paid is in proportion to the degree of incapacity.
What is the tax situation?
There is no tax relief available on the contributions. The benefits are paid tax free.