Renting the Family Home Under Fair Deal: The 100% Rental Income Exemption

Why Renting the Home Is One of the Smartest Fair Deal Strategies

When a parent moves into long-term residential care, the family home sits empty. Rates, insurance, heating, and maintenance costs keep running. Meanwhile, the property is already being assessed at 7.5% of its value per year for the Fair Deal contribution.

Since February 2024, families can rent out the principal private residence and keep 100% of the rental income completely exempt from the Fair Deal financial assessment. The HSE doesn't count a single euro of that rent when calculating the weekly contribution. For a home generating €1,500 per month in rent, that's €18,000 per year that stays in the family's hands rather than being offset against care costs.

But the exemption isn't automatic. It requires an application and supporting documents; if the rental income is not exempt, it is assessed under the ordinary Fair Deal rules at 80% (or 40% for couples).

The Three Requirements for the Exemption

1. Register the tenancy with the RTB

For a standard private tenancy, the Residential Tenancies Board (RTB) must have an active registration for the tenancy. The HSE says an unregistered principal residence may still qualify where an RTB exemption applies, so this is not an absolute requirement in every case. Registration costs €40 per year online (rtb.ie) and must be completed within one month of the tenancy start date, with registration renewed annually thereafter.

The property must also meet minimum housing standards under the Housing (Standards for Rented Houses) Regulations. The local authority can inspect, so the home needs to be in lettable condition — functioning heating, safe wiring, adequate ventilation, proper fire safety.

2. Submit the supplementary form to the NHSO

After registering with the RTB, you submit the Principal Private Residence Rental Income Application Form to the local Nursing Homes Support Office. This form goes alongside the main Fair Deal application (or as a separate submission if the parent is already on the scheme).

You'll need to include the RTB registration letter, a copy of the tenancy agreement, and the latest Revenue Notice of Assessment.

3. The property must be the applicant's principal private residence

The exemption only applies to the home the applicant was living in before entering care. A second property, investment property, or holiday home doesn't qualify for the 100% rental exemption — rental income from those properties is assessed as ordinary income at 80% (or 40% for couples).

The DSP Trap That Catches Families

Here's where things get complicated. The HSE exempts 100% of the rental income from the Fair Deal assessment. But the Department of Social Protection (DSP) has its own rules — and they're less generous.

Under DSP means-testing for payments like the State Pension (Non-Contributory), Disability Allowance, or Fuel Allowance, rental income from a principal residence is only disregarded up to €14,000 per year. And that disregard has conditions: the tenant cannot be an employee or immediate family member of the care recipient.

If the rental income exceeds €14,000 per year (€269 per week), the full amount — not just the excess — may be assessed as cash income by the DSP. That assessment can reduce or eliminate your parent's non-contributory pension or fuel allowance.

The practical impact: renting the home could save thousands on the Fair Deal side while costing hundreds on the pension side. You need to calculate both effects before signing a lease.

What About Capacity?

If your parent lacks the mental capacity to sign a tenancy agreement, the rental exemption hits a legal wall. You cannot sign a lease on their behalf as next-of-kin without legal authority.

You'll need either a registered Enduring Power of Attorney (EPA) that covers property decisions, or a Decision-Making Representative (DMR) order from the Circuit Court. The DMR route takes months and adds legal costs. This is one of the strongest arguments for setting up an EPA early — before cognitive decline makes it impossible.

For families navigating both the rental exemption and the broader Fair Deal process, our filing toolkit includes the RTB registration checklist and a dual-assessment calculator that shows the combined effect on both the HSE contribution and DSP payments.

See more Ireland guides →