Deferred payments for care (what will happen to my home)

Deferred payments for care (what will happen to my home)

For people who own their own home, but either do not wish to or cannot sell it immediately to help pay for care.

If you have over £23,250 in savings and capital 

You will not be eligible for payment from the council towards your care in a care home if your savings and capital are over £23,250.

A deferred payment agreement allows you to use the value of your home to pay for care in a residential or nursing care home. 

The deferred payment agreement (DPA) is designed for people who own their own home and require permanent residential or nursing care and do not wish to sell their home or cannot sell immediately and cannot meet the full cost of their care home fees from other capital or income. 

What is a Deferred Payment Agreement (DPA)?

A DPA is a type of loan from Worcestershire County Council, your home is used as security against the loan.  

If the value of your share of your house, where you were living as your main or own home before you required residential or nursing home care, is more than the capital threshold for financial assistance from the local authority you will be responsible for the full cost of the care, however, payment may be deferred until the property is either sold by you or your estate. If you own your home with someone else, they will need to consent to the legal charge on the value of your share of the property.  

You will be assessed to see what you can afford to pay from your available income and savings. This will be your assessed contribution towards your care, and you will need to pay this amount while you are living in the residential or nursing care home. The Council will fund the balance of the care fee, and this is the amount that will be the basis of the deferred payment – i.e. the subject of the loan agreement.  

Administration fees for the loan are payable on entering the agreement and annually, in some cases they can be added to the loan along with the interest that accrues. 

The Council will establish the maximum amount of the loan based on the equity available in your share of the property.  

The Deferred Payment builds up as a debt against the equity in the value of your property. The debt is cleared when you (or your estate) sell your home, or when you have other capital available. 

If the person receiving care lacks the capacity to make decisions regarding their finances, there must be a legally appointed representative who can make decisions on their behalf. This must be someone who holds registered Enduring Power of Attorney, Lasting Power of Attorney (for property and finance) or a Deputy appointed by the Court of Protection. If the latter your Deputy Order must give you permission from the Courts to both charge and sell the property. If you are appointed to act for someone, you will be asked to provide verification of this. 

Further information can be found at making financial decisions on someone else's behalf.

You may qualify for a DPA if:

You will qualify for a DPA if:

  • you have been assessed as requiring 24-hour care in a residential or nursing home
  • you are the owner of a property (or share in a property) that was your main or only home and you have a suitable amount of equity available
  • you do not have significant other capital (savings or assets that exceed the upper threshold set annually by the council)
  • the equity in your property must cover at least one year's care costs

What Happens next?

Your social worker will provide you, or someone acting legally on your behalf, with the Property Information Pack.

You will need to complete the Property Information Acknowledgment form to summarise the situation with the property.

We will then consider if we can offer a deferred payment to you, and you may be asked to provide further information. Once a decision is reached, we will write to you and invite you to apply for the DPA loan.  

We strongly recommend you seek independent legal and financial advice to decide if this option is suitable. 

If you are happy to proceed, you can complete the Deferred Payment Agreement application by post or email. A telephone appointment to discuss the loan and your application will be offered. Please note a number of supporting documents including proof of identity will be required for the application.

You will be asked to pay an administration fee to cover administrative and legal costs. 

If you proceed the Council will place a legal charge on your home to safeguard the loan.  

You can end the agreement at any time by paying off the outstanding debt, usually by selling your home. The loan also becomes payable from your estate in the event of your death.  

12 Week property Disregard Period

During the first 12 weeks of a permanent nursing or residential placement you will be assessed to pay a contribution towards your care from your income and savings.

You or a third party may also be asked if you or they can pay anything further towards your care costs due to your choice in care home exceeding the costs agreed by the council.

From week 13 of your placement the DPA can be used to fund your placement and the additional cost providing there is sufficient equity in your share of the property. 

If you are deemed to be eligible for financial assistance from a date after the first 12 weeks of receiving care in a long-term placement, no property disregard period will be given.

Further information

Some useful information can be found at Age UK: Do I have to sell my home to pay for care?

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