Overview
The Deferred Payments Scheme is designed to help you if you have been assessed as having to pay the full cost of your residential care – but cannot afford to pay the full weekly charge because most of your capital is tied up in your home.
By entering into a deferred payment agreement with the Council, you can access the equity in your home without having to sell it so you do not have to sell your home at a point of crisis.
There are two types of agreements, one is for situations where the local authority is contracting direct with the care home on the person's behalf (and is deferring charging the person), often referred to as a charging or ‘traditional’ deferred payment agreement (DPA).
The other is for situations where the person is contracting with a care home themselves and the local authority is effectively 'loaning' them money to pay their care home costs. Both agreements require the individual meets the gligibility criteria for the deferred payment scheme.
Eligibility criteria
- Anyone whose needs are to be met by the provision of Residential/Nursing care permanently within a care home
- Anyone who has less than £23,250 in assets excluding the value of their home (i.e. in savings and other non-housing assets); and
- Anyone whose home is not disregarded, for example it is not occupied by a spouse or dependent relative as defined in regulations on charging for care and support (i.e. someone whose home is taken into account in the local authority financial assessment and so might need to be sold)
- The property must be registered with the Land Registry
- The person must have a beneficial interest in the property
- There should be no outstanding mortgage or loans against the property
- There should be no-one living in the property at the time the agreement is entered in to
- The adult or their legal representative must consent to the agreement
- The deferred payment agreement must be signed by a person with capacity to make the decision or their legal representative.
Trafford Council reserves the right to refuse any application if we feel we cannot secure our interest.
What happens next
If you are eligible for the scheme the agreement will usually start 12 weeks after you have entered a residential care home. Trafford Council will place a legal charge on your property.
We will carry out a financial assessment based on your ongoing income and savings to determine a weekly assessed contribution. You will be invoiced for this contribution every four weeks. The weekly cost of the care home that is not covered by your weekly assessed contribution will be deferred against the value of your property.
You will in effect be charged the full cost of your residential care placement however you will only need to pay your assessed contribution during the duration of the agreement.
Ending the agreement
The agreement is for the duration of your lifetime or until you sell your property or there is no longer sufficient equity. At the end of the agreement Trafford Council will recoup the accrued debt deferred against the value of your property and any interest.
The rate of interest is based on the Market Gilt Rate, plus 0.15%, this changes in January and July each year.
The ‘traditional’ DPA scheme
If you are eligible for the scheme the agreement will usually start 12 weeks after you have entered a residential care home. The Council will place a legal charge on your property. There will be an administration fee payable upfront once the charge has been placed.
We will carry out a financial assessment based on your ongoing income and savings to determine a weekly assessed contribution. You will be invoiced for this contribution every four weeks and you must pay this amount as it cannot be offset against the value of your former home.
The weekly cost of the care home that is not covered by your weekly assessed contribution will be deferred against the value of your property. You will in effect be charged the full cost of your residentialcare placement, however you will only need to pay your four weekly assessed contribution during the duration of the agreement.
The ‘loan-type’ scheme
If you are eligible for the scheme you would have responsibility to pay the care provider for your care and the Council will loan you the cost of care in instalments less any contributions that you can make from your income. The Financial Assessments team can complete an assessment for you to work out how much this will be.
Further information
You can contact the Financial Assessment Caseworkers by emailing FA.Caseworkers@trafford.gov.uk.
Before entering this scheme you should take independent financial and legal advice to determine whether this is the best option for you.