Property and deferred payments

The Deferred Payment Agreement Scheme is designed to help you if you have been assessed as having to pay the full cost of your residential or nursing care because you have capital and savings over the capital threshold, including your former home. If you cannot afford to pay the full weekly charge from your income and most of your capital is tied up in your former home, but you do not want to sell this, we will help to pay some of your care home bills, if you are eligible. You can delay repaying us until you choose to sell your home, or until after your death.

The arrangement offers you a loan from us, using your home as security. It doesn’t work in the same way as a conventional loan as we don't give you a fixed sum of money, but instead pays an agreed part of your weekly care and support costs for as long as necessary. However, we will only defer charges up to a ceiling limit which will be the property/land value, less 10%, less the current lower capital limit of £14,250.

You will pay a weekly contribution towards your care that you have been assessed as being able to pay from your income and any other savings. We pay the part of your weekly charge that you can’t afford, until your property is sold.

The part that we pay is your 'Deferred Payment'.

The Deferred Payment builds up as a debt, which is cleared when the money tied up in your property is released, for example when it is sold. For many people this will be done by selling their home, either immediately or later on. If you want to, you can also pay the debt back from another source.

However, you do not have to sell your home if you don’t want to, you may, for example, decide to keep your home for the rest of your life and repay the debt out of your estate; or you may wish to rent out your property to generate income. You should note that if you choose to do this, you will be expected to use the rental income to increase the amount you pay each week, and this would then reduce the weekly amount paid by us. This would minimize the eventual Deferred Payment debt.

Types of loans

There are two types of deferred payment loans available, your assessment officer will discuss the options in more detail with you.

Option 1: Traditional Type

We pay the care provider directly, less the weekly amount you have been assessed to contribute from your income and savings. The difference between what we pay, and your weekly contribution is the deferred payment amount; and this is the amount deferred against the value of your property.

You will receive invoices from us for your weekly contribution.

Option 2: Loan Type

You pay the care provider directly for the total cost of your placement. We will loan you the money less any contribution you have been assessed to pay from your income and savings. The loan is paid to you in instalments on a four-weekly basis; and this is the amount deferred against the value of your property.

Eligibility

In order to be eligible for the Deferred Payment Scheme you must:

• have capital (excluding the value of the property) of less than £23,250;
• have been assessed as requiring, and be entering, permanent residential/nursing care in registered care home;
• own, or have part legal ownership of a property, which is not benefitting from a property disregard (this is where we disregard the value of your property when we are doing our financial assessment - normally this will be because your partner still lives there), and ensure your property is registered with the Land Registry;
• have mental capacity to agree to a Deferred Payment Agreement or have a legally appointed person willing to agree to this

Can I apply if I have a mortgage?

If we are unable to secure the first legal charge on the property, then it is unlikely that you will be able to enter into a Deferred Payment Agreement.

How can a Deferred Payment Agreement end?

You can end the agreement at any time (for example if you sell your home) and at this point the loan becomes payable immediately.

Otherwise, the agreement ends on your death and the total loan amount becomes payable 90 days after this date. We cannot normally cancel the agreement without your consent.

If the loan amount remains unpaid 90 days from the agreement ending, we will look to recover the debt as set out in our Debt Recovery Policy and appropriate action will be considered.