The solution to pay for a nursing home for elderly people or an elderly home caregiver

Pensium provides the family with up to double the rental income from the property, paid in advance and on a semi-annual basis. The amount of the contributions is the result of a personalised study that takes into account:

a) The rental potential of the property.

b) The need for additional resources beyond pension income that the elderly person requires to pay for the nursing home.

c) The possibility of obtaining new income through benefits under the Dependency Law.

After this analysis, a personalised proposal is made with the recommended contributions.

The Programme also includes financing for any renovations needed to prepare the property for rental.

Pensium can advance the cost of any necessary renovations or improvements, so that neither the elderly person nor their family has to bear this cost. In this case, the minimum renovation budget required to make the property rentable is presented to the owner for approval. The habitability certificate and energy efficiency certificate, required to formalise the rental, are also obtained.

These amounts are included in the programme as part of the advance, and will be repaid from future rental income.

The contribution period can extend up to 10 years, which typically covers the care needs of dependent elderly people. In any case, at the end of the term, a new Pensium operation can be considered.

The Pensium programme can never result in the loss of the property. Ownership of the property remains at all times with the elderly person and/or their family. Pensium can only manage the property as a rental until the total amount of the operation has been fully repaid. No mortgages and no guarantors.

If the property belongs to the elderly person and they pass away, ownership passes to their heirs.

The Pensium programme is fully compatible with public dependency benefits and with the application for a public placement when applicable. It is an additional resource that does not limit access to other benefits.

The Pensium programme is a financing system to pay for the care of dependent elderly people when they need to move to a nursing home or to a family member’s home.

The property that is left empty works for its owner and generates the resources needed to pay for this care.

Pensium manages the rental of this property and advances the family the amount of money they need (up to double the monthly rent), with guaranteed contributions from the moment the programme is signed. The advanced amount is recovered from the rental income collected, so the family never has to make any cash payments.

Since the programme contributions are intended to cover the care costs of dependent elderly people, and since the programme is based on rental income, the requirements to formalise it are:

a) The programme beneficiary must have a recognised Dependency Grade (either recognised or in process).

b) A property must be available to be used as a rental.

c) The property owner(s) must have signing capacity (this can be through a power of attorney or legal guardian).

Pensium provides the family with up to double the rental income from the property, paid in advance and on a semi-annual basis. The amount of the contributions is the result of a personalised study that takes into account:

a) The rental potential of the property.

b) The need for additional resources beyond pension income that the elderly person requires to pay for the nursing home.

c) The possibility of obtaining new income through benefits under the Dependency Law.

After this analysis, a personalised proposal is made with the recommended contributions.

The Programme also includes financing for any renovations needed to prepare the property for rental.

Pensium can advance the cost of any necessary renovations or improvements, so that neither the elderly person nor their family has to bear this cost. In this case, the minimum renovation budget required to make the property rentable is presented to the owner for approval. The habitability certificate and energy efficiency certificate, required to formalise the rental, are also obtained.

These amounts are included in the programme as part of the advance, and will be repaid from future rental income.

At the moment the programme is signed before a notary, Pensium already makes the first contribution to the family, corresponding to the first semi-annual period. There is no need to wait for the property to be rented before starting to receive the agreed contributions.

The Pensium Programme has the sole purpose of providing supplementary income to elderly people to cover their care expenses in nursing homes or at home, in order to guarantee their best possible care. The amount of the contributions is calculated to cover the care needs of the elderly person and must be used for this purpose.

Yes, it is possible. However, there must be a property available for rental that allows the programme to be formalised. This property can be another property or it can be the elderly person’s own home if they move to a family member’s home where they can be cared for.

The contribution period can extend up to 10 years, which typically covers the care needs of dependent elderly people. In any case, at the end of the term, a new Pensium operation can be considered.

Programme beneficiaries with Dependency Grades II and III may access a public placement.

When a public placement is obtained, the programme beneficiary can choose between:

a) Keeping the programme contributions as originally planned.

b) Stopping new contributions and beginning the debt repayment phase.

c) Reducing the amount of the contributions.

Contributions can be stopped or reduced at any time, although this must be requested at least 2 months before the next scheduled semi-annual contribution.

When capital contributions cease, the net rental income from the property is used to repay the outstanding debt until it is fully cancelled.

Through the present and future rental income from the property. While the semi-annual contributions are being received, the net rental income is already being used to reduce the debt. Once contributions cease, Pensium continues to manage the rental, which continues to repay the outstanding debt until it is fully cancelled. Once the debt is repaid, possession of the property and the rental income automatically revert to the owner.

Additionally, the programme can be cancelled at any time by repaying the outstanding debt in advance, with no fees or charges.

This cannot be determined exactly in advance, as it depends on how the operation evolves. In addition to the amount of contributions relative to the rental income, the most important variable is the number of semi-annual periods during which contributions are maintained.

You can consult our expert and run as many simulations as you wish based on your expectations. Pensium will provide you, at no cost, with a personalised project tailored to your needs.

Since the Pensium programme is a financing operation, there are formalisation and management costs. However, neither the elderly person nor their family needs to make any payment, as all costs are included in the programme and paid from the property’s rental income.

The programme costs are: formalisation fees of €1,975 (which include the costs of executing the public deed before a notary, property valuation and rental assessment costs, administrative and registration costs).

When the Pensium programme beneficiary has a recognised Dependency Grade (Grade I, II or III), the operation is exempt from the Stamp Duty tax. If the beneficiary does not have a recognised Dependency Grade, the Stamp Duty tax must be settled.

Pensium Programme contributions are paid in advance and can be up to a maximum of double the rental income.

The nominal annual interest rate applicable to the credit operation will be determined at the time of formalising the operation. It will be a fixed interest rate that will remain in place for the duration of the operation and will in no case exceed the arithmetic mean of the last three interest rates published at the close of the immediately preceding calendar month by the Bank of Spain for consumer credit operations of more than 5 years.

(see here the table of rates published by the Bank of Spain (19.4 – Total credit institutions and financial credit establishments)

On the other hand, one of the advantages of Pensium is that the elderly person and their family do not need to worry about renovations, finding reliable tenants, rental payment insurance, or the subsequent management of incidents and repairs, as this is all part of the programme. Pensium charges a fixed monthly management fee based on the rental amount, plus the first month’s rent once the rental contract has been formalised. These amounts will be deducted from the gross rental income.

The Pensium Programme provides financial resources through successive semi-annual contributions that generate a credit in favour of Pensium, which will be repaid using the rental income from the property. The credit contributions are not income attributable under Personal Income Tax. However, the rental income must be declared as income from real estate capital in the Personal Income Tax return.

Pensium provides all the necessary information to complete the Personal Income Tax return.

The cancellation fee is 0%: the Pensium operation can be cancelled at any time (whether during the contribution period or the repayment period) with no cost, by settling the outstanding debt at that point. Partial repayments are also possible, which entail waiving any further contributions from that moment onwards.

The Pensium programme can never result in the loss of the property. Ownership of the property remains at all times with the elderly person and/or their family. Pensium can only manage the property as a rental until the total amount of the operation has been fully repaid. No mortgages and no guarantors.

If the property belongs to the elderly person and they pass away, ownership passes to their heirs.

Pensium carries out a professional valuation and a prior study to determine the rental potential of the property, since this rental is the basis of the programme, using renowned professionals with official recognition and experience in this field. Pensium also provides the owner in writing with the Property Rental Management Criteria. It is in the shared interest of both the owners and Pensium to achieve the best possible rental, with regularity and payment security.

Pensium guarantees contributions for the payment of care costs from the moment the programme is signed, even if the property has not yet been rented, and even in the event of non-payment of rent or a change of tenants that results in the property being vacant for a period of time.

In the event of any rental non-payment, Pensium contributions remain guaranteed. The rental will be covered by an insurance policy covering the risks of non-payment, property maintenance, and legal risks arising from the rental contract.

A semi-annual report will be provided detailing the progress of the Programme, specifying the contributions made and the results of the property’s rental activity, the outstanding debt after deducting net results, etc., itemising each and every income and expense of the Programme. Families will also have permanent access to a digital folder with all up-to-date programme documentation.

Pensium’s goal is not only to ensure that dependent elderly people receive the care they need and have the resources to pay for it, but to do so in a responsible, fair and socially respectful manner. This way of doing things has earned us various social impact company recognitions, which accredit us as a company that acts responsibly and maximises positive impact on society. You can view here all the recognitions obtained.

Pensium carries out financing activities and is therefore subject to the supervision of the Bank of Spain. This supervision ensures that the activity is carried out honestly, impartially and professionally, that Pensium provides full transparency regarding the characteristics of the programme, and that the Pensium programme complies with all applicable regulations regarding the protection of people who formalise the operation.

The Pensium programme is a flexible option that can be cancelled at no cost and allows for the possibility of choosing another alternative in the future. It also has the advantage that the family does not put ownership of the property at risk.

If other options are chosen, such as selling the property or taking out a lifetime annuity, the operation is irreversible and it is no longer possible to cancel it and recover ownership.

You can view here a summary of the available options for generating income from your property, with the main advantages and disadvantages of each.

Typically, average rental income alone is not enough to cover the costs of a nursing home placement. Furthermore, in order to rent with guarantees and achieve a good price, a minimum level of property renovation is required — even if it is just repainting — as well as obtaining the habitability certificate and the energy efficiency certificate, and knowing how to market the property using professional techniques.

The Pensium Programme allows you to avoid any upfront expenditure on renovations and to be completely free from the rental management process (finding suitable tenants, drawing up contracts, handling unforeseen issues, ensuring payments are collected, etc.). Contributions are guaranteed from the moment the programme is signed, without needing to wait for the property to be rented and even if at some point there is a change of tenants and no rental income is received for a period of time.

With Pensium, you receive the agreed income regularly and with complete security, regardless of economic conditions or whether the property is rented at any given moment.

The income obtained through a reverse mortgage is lower than with the Pensium Programme, and may therefore be insufficient to cover care costs.

Furthermore, a reverse mortgage involves accumulating a debt and interest charges that must be repaid upon maturity, which in many cases results in the need to sell the property quickly in order to meet this accumulated debt.

With a lifetime annuity, the property is lost, as it involves receiving income in exchange for transferring ownership of the property.

Furthermore, the company with which the annuity is contracted calculates the payment amount based on the estimated life expectancy of the beneficiary. In the event of early death, the amount received may be very small in relation to the value of the property transferred.

With Pensium, nursing home payments are covered through the property’s returns, which repays the debt on its own, and ownership is not lost for the heirs. Any increase in the property’s value goes entirely to the heirs, and the period of use of the property that is ceded is adjusted precisely to the capital received and used.

Selling the property to fund the elderly person’s care is not advisable for several reasons:

a) Obtaining a significant sum of cash from the sale, even after paying taxes, may result in the loss of public benefits (ownership of the main residence does not affect benefits, whereas income from the sale does).

b) Selling the property means losing an asset built up over many years and reduces the estate available for heirs, as the proceeds are used to pay care costs and diminish month by month.

c) When sold under some urgency, the price achieved is often not the best possible.

d) Once the sale proceeds have been obtained, the risk-free investment options for this capital are very limited and the returns are very low. In contrast, keeping the property and renting it out provides a very attractive return. Furthermore, the family benefits from the ongoing appreciation of the property.

e) Selling the property leaves the dependent person unprotected, as it liquidates their assets at a time when future care needs are unknown. It is advisable to keep this option as a last resort.

The Pensium programme is fully compatible with public dependency benefits and with the application for a public placement when applicable. It is an additional resource that does not limit access to other benefits.

The programme requires the signature of the property owners, either in person, through a legal guardian in the case of legal incapacity, or through a person designated by notarised power of attorney.

Therefore, if the elderly person is unable to sign but one of these arrangements exists (notarised power of attorney or legal guardian), the programme can be formalised.

Yes, it can be formalised and this is very common. The presence of all property owners and usufruct holders will be required to formalise the programme.

Yes, it can be formalised. In this case, the maximum contribution amount will be calculated based on the current rental income. All that is required is a novation of the rental contract so that, from the date the programme is signed, the income from this rental is used to repay the outstanding debt.

While the Pensium programme is in force (whether during the contribution period or the repayment period), the property must be used to generate income through rental in order to repay the debt. If the property is needed during this period, the outstanding debt would first need to be cancelled.