Please note: this article was not written by a financial or legal specialist, and does not cover every circumstance. Please consult a specialist before making any financial or legal decisions.

If the value of your property is included in your financial assessment, you may be tempted to immediately sell the property in order to put the money towards care home fees.

However, you may be able to delay this sale by arranging a deferred payment agreement (DPA) with your local authority.

What is a deferred payment agreement?

A deferred payment agreement is a loan that can be requested from your local authority.

The local authority will then pay your care home fees, and use your property as security against the loan. It means you are basically borrowing money to put towards your care home fees, and this loan is repaid at a later date.

You can delay repaying the loan until you choose to sell your home in the future, or it can be deferred until after your death.  After your death, the costs will be paid from your estate.

Questions about funding care?

Care Sourcer’s friendly care experts are on hand to provide guidance on typical care costs, help you explore your funding and benefit options, or even negotiate care fees on your behalf. Call us on freephone:

0800 098 8299

(Mon-Fri, 9am-5pm)

When would I use a deferred payment agreement?

When you need extra money to pay towards care home fees but you don’t wish to sell your home, perhaps because you want to keep it in the family.

A deferred payment agreement can be used if you are having problems making a sale on your property, or wish to sell it at a different time in the future.

Am I eligible for a deferred payment agreement?

Deferred payment agreements are available throughout the UK with the exception of Northern Ireland.

England

The requirements for being offered a deferred payment agreement in England are: 

  • You have less than £23,250 in savings, other than the value of your property
  • You own the property and there is no one else still living in the property
  • You are about to move into a care home for long-term care or already receive long-term care in a care home

Scotland

The requirements for being offered a deferred payment agreement in Scotland are: 

  • You have less than £18,000 in savings or assets, other than your property
  • Any other income you have is not enough to pay your care home fees
  • There is no one else still living in the property
  • You are legally entitled to grant a standard security (the equivalent of a legal mortgage in England and Wales) against the property.

Wales

The requirements for requesting a deferred payment agreement in Wales are: 

  • You have less than £50,000 in savings or assets, other than your property
  • You have a ‘beneficial interest’ in the property, which means you have a share in its value and a right to a share of the proceeds of the sale of the property
  • You don’t have any other income which could pay your care home fees
  • There isn’t an outstanding mortgage on the property or if there is an outstanding mortgage then it will leave sufficient money to fund the cost of the care home

How do I arrange a deferred payment agreement?

The first step is to know the amount you can afford to contribute towards the cost of your care home. This is determined during a financial assessment by your local authority, which takes into account your income and capital. More about financial assessments.

A deferred payment agreement cannot be agreed without your consent and you must request one from your local authority if you want one. The local authority must consider your request but it can decide to refuse it.

It is recommended to consult a care fees adviser before making any large decisions about your property.

Summary

Can I delay the sale of my property, even if I decide to live permanently in a care home?

You may be able to delay the sale of your property by arranging a deferred payment agreement (DPA) with your local authority. A deferred payment agreement is a loan that can be requested from your local authority.

The local authority will then pay your care home fees, and use your property as security against the loan. It means you are basically borrowing money to put towards your care home fees, and this loan is repaid at a later date.

Are deferred payment agreements available throughout the UK?

Deferred payment agreements are available throughout the UK with the exception of Northern Ireland.

Am I eligible for a deferred payment agreement?

Deferred payment agreements are available throughout the UK with the exception of Northern Ireland. However there is a list of criteria for England, Scotland and Wales that you must meet.

How do I arrange a deferred payment agreement?

The first step is to know the amount you can afford to contribute towards the cost of your care home. This is determined during a financial assessment by your local authority, which takes into account your income and capital. 

A deferred payment agreement cannot be agreed without your consent and you must request one from your local authority if you want one. The local authority must consider your request but it can decide to refuse it.

Questions about funding care?

Care Sourcer’s friendly care experts are on hand to provide guidance on typical care costs, help you explore your funding and benefit options, or even negotiate care fees on your behalf.

Call us on freephone: 0800 098 8299 (Mon-Fri, 9am-5pm)

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