A Deferred Payment Agreement is an arrangement with your local authority- essentially a loan. This loan is secured against the value of your house at a set, and often low, interest rate.
The main purpose of the Deferred Payment is to help the resident pay for their care when they have a short-term cash flow problem but have plenty of value in their unsold property. It is normally used when a 12-week property disregard has come to an end, but the house has not yet sold.
Previously, it was widely used for families that were not yet ready to sell their house, but this is less common now with councils struggling for funds themselves.
Who is eligible for a Deferred Payment?
To be considered you must meet the following criteria:
- Be assessed as needing Residential Care by the Local Authority
- Have less than £23,250 in liquid capital
- Own a house that you intend to sell.
Advantages of a deferred payment agreement
- If you have no capital to pay for your care fees, the council will help you.
- You only build up debt against the value of your home for the time you’re in a care home.
- If your home increases in value during this time, you’ll have more funds available to repay the council.
It may be possible to include a top-up fee in the agreement, to cover the cost of a more expensive room.
- You may still be able to claim benefits, such as Attendance Allowance, if you’re entitled to them.
When can I request a deferred payment agreement?
As soon as you, or a loved one, are assessed as needing to move into residential care, you can contact the local authority and request a deferred payment agreement, if you believe you may be eligible.
If you are eligible for a deferred payment, it is likely that the council will disregard the value of your property for the first 12 weeks of your care home stay. This should allow sufficient time to get the agreement set up. Find out more in our article on the 12-week property disregard.
If you or a loved one already lives in a care home, but you were previously unaware of the deferred payment option, you can still contact the council and ask them to consider putting one in place.
For more information or if you wish to discuss care for your loved one please email firstname.lastname@example.org