Deferred Payment Agreements for care home fees
When a loved one needs to enter a care home, the financial requirements can be daunting. If someone has a property but lacks immediate funds, a Deferred Payment Agreement (DPA) might be the answer. This option allows local authorities to cover care home costs temporarily, placing a charge on the property. When the property is sold, the deferred fees are repaid to the local authority.
Deferred payment agreements are not something most people plan for—they often arise suddenly, adding to the stress of an already challenging time. That’s why Nash & Co Solicitors is here to guide you through this process with clarity and compassion, giving you the necessary information and helping you make the right decisions for you or your loved one’s future.
arrow_back Back to Care Support
What are deferred payments for care home fees?
A Deferred Payment Agreement is a helpful way for people to manage care home costs when they don’t have accessible funds but own a property. With this agreement, the local authority pays the fees upfront, allowing the individual to delay payment until their home is sold. However, certain criteria apply, and each local authority may have specific requirements.
These agreements can bring peace of mind, but they often come with a few complexities, especially when property ownership is split or involves trusts. Deferred payment agreements enable people to cover immediate care costs without having to sell their home in a hurry. This arrangement ensures that the person in care can remain secure and comfortable, with costs taken care of in a way that makes sense for their financial situation.
Hilary Cragg, a Solicitor and Partner at Nash & Co Solicitors, is here to help you if you are considering the deferred payments route. You can reach Hilary on 01752 827047 or at hcragg@nash.co.uk.
How deferred payments can make care home fees more affordable
Deferred payments can relieve the immediate burden of affording care home fees. If someone owns a property but doesn’t have enough savings or income to pay the fees, a deferred payment agreement prevents the need to sell their home right away. This option lets people keep their property as an asset, while the local authority supports their care costs by covering them upfront.
The debt then gradually accumulates against the property, similar to a mortgage. When the home is eventually sold, the deferred fees are paid back to the local authority. This approach means that families and individuals can take their time, making plans for the future and giving loved ones the assurance that care fees are being managed.
Deferred payments are not a one-size-fits-all solution; they require a thorough understanding of eligibility criteria and how payments are structured. That’s where expert advice is invaluable.
call Speak to a friendly Dementia Care Solicitor on 01752 827047
Eligibility criteria for Deferred Payment Agreements
Eligibility for a Deferred Payment Agreement depends on several factors, primarily around ownership of property and available assets. Generally, to qualify, an individual must have property or equity that can be used as security, but insufficient savings or income to cover care fees outright. Typically, this option is available only to those moving into a care home on a long-term basis, as it’s designed to provide stability for those who require permanent or ongoing support. However, specific eligibility criteria can vary from one local authority to another.
An additional important requirement is that the property is not otherwise occupied by certain qualifying dependents, like a spouse, partner, or disabled relative, as this may impact eligibility. It’s also important to consider any existing debts or charges on the property, as these may affect the agreement’s structure or terms. If there are questions about whether a deferred payment is right for you, a solicitor can clarify any uncertainties and assess how your personal circumstances fit within the eligibility guidelines.
Considerations for individuals and families
Choosing a deferred payment agreement involves several considerations, particularly for families who may inherit the property or have a financial interest in it. It’s essential to understand that deferred payments result in a growing debt against the property, which may reduce the eventual inheritance value. This could be a sensitive topic within families, especially if the home has sentimental value. Taking time to discuss the decision with loved ones, or arranging a family meeting with a solicitor present, can help everyone involved understand the financial implications.
Additionally, as interest is typically applied to deferred payments, the total amount owed will increase over time. Families may wish to review whether they are comfortable with this arrangement or if alternative payment options might better suit their needs. A solicitor can help you weigh these options, providing peace of mind that your loved ones’ care is funded in a way that aligns with your family’s values and financial goals.
Click here to Read Hilary’s latest article on deferred payment agreements and how to
avoid the most costly mistakes.
Why it’s important to get legal advice on deferred payments
Navigating deferred payment agreements can feel overwhelming, especially during an already emotional time. Working with a solicitor offers peace of mind, ensuring that everything is handled correctly and that no details are overlooked. There are different aspects of property ownership that might impact a deferred payment agreement, including joint ownership or trust arrangements. A solicitor can explain these in plain language, making the process much easier to understand.
Additionally, local authorities may request independent legal advice as part of the deferred payment application. Having a solicitor review the agreement ensures that all paperwork is accurate and complete, saving time and preventing potential issues later. This guidance is particularly crucial when family members are involved or when a property is held in trust. By seeking legal advice, you protect yourself and your family’s best interests.
How Nash & Co Solicitors can help with Deferred Payment Agreements
At Nash & Co Solicitors, we specialise in guiding clients through the intricacies of deferred payment agreements. Our team will work with you or your loved one to understand your unique situation and ensure that everything is in order. We’ll review any existing property arrangements—such as co-ownership or trusts—so that the deferred payment application reflects all necessary details.
From filling out forms to advising on what documents to include, our aim is to make the process as smooth as possible. If there are special considerations, like partial ownership or life interest trusts, we’ll ensure that you’re fully informed and that all necessary details are addressed with the local authority. We’re here to take the stress out of this process, helping you confidently manage the cost of care.
If you’d like to discuss how we can support you with a deferred payment agreement, please get in touch with Hilary Cragg, our specialist solicitor and one of the firm’s Partners. You can call Hilary on 01752 827047 or email her at hcragg@nash.co.uk. You’ll be able to speak to Hilary direct.
Frequently asked questions
-
A deferred payment agreement is a scheme that helps people cover care home fees when they don’t have accessible funds but own property. Instead of selling the property immediately, the local authority pays the fees and places a charge on the property. This is especially beneficial for individuals who want to retain ownership of their home for as long as possible. It provides the financial support needed to cover care without forcing a quick sale, which can be a relief for families during a difficult time.
-
When a deferred payment agreement is set up, the local authority pays the care home fees on behalf of the person needing care. In return, the authority places a charge on the property, similar to a mortgage. Over time, this charge accumulates to cover the fees paid. When the property is eventually sold, usually after the person’s passing, the debt is settled from the proceeds. This arrangement allows families to manage the cost of care without having to rush into selling a home or depleting other assets.
-
Generally, a deferred payment agreement is available to those who:
Are moving into a care home on a long-term basis.
Own a property or have equity in a property that can serve as collateral.
Do not have sufficient income or savings to cover care home fees directly. Eligibility requirements may vary, and it’s important to check with the local authority. Some situations, like joint ownership or property held in trust, might require additional consideration or legal advice to confirm eligibility.
-
No, one of the main benefits of a deferred payment agreement is that it allows you to delay selling your home. The local authority covers the care costs, allowing you to keep the property until a time that suits you or your family. The fees and any accrued interest are only paid back when the property is eventually sold, which can bring peace of mind and stability at a time when immediate funds may not be available.
-
When a property has multiple owners, the deferred payment agreement may still be an option, but there are additional factors to consider. The local authority will need to assess the agreement in the context of all ownership interests. This could mean that the co-owner(s) need to provide consent, or that certain legal terms must be adjusted. Seeking legal advice ensures that the interests of all owners are protected, and that the agreement is set up correctly and fairly for everyone involved.
-
Yes, it’s possible, but this can make the process more complex. Trusts can affect eligibility and how the deferred payment agreement is structured. The local authority may need specific details about the trust’s terms and beneficiaries, as this could influence how fees are recouped. Consulting a solicitor helps clarify what’s possible in your unique case, ensuring that the deferred payment agreement aligns with the trust’s legal structure.
-
Most deferred payment agreements do have an interest rate applied to the outstanding balance, which means the total amount owed will gradually increase over time. The rate is generally set by the local authority and may vary annually. Interest starts accumulating from the date the agreement begins. A solicitor can help you understand the interest rate details, ensuring you’re aware of the potential costs involved over the duration of the agreement.
-
Deferred payment agreements can be legally complex, particularly when there are specific ownership arrangements, trusts, or family members involved. A solicitor provides crucial guidance, ensuring that all terms are clear, accurate, and tailored to your situation. Some local authorities require independent legal advice before finalising the agreement, and a solicitor can help prevent any misunderstandings or issues later. Their expertise ensures that your rights are protected, and that you’re fully informed about the financial commitment.
-
The time to arrange a deferred payment agreement can vary depending on the complexity of the property ownership, local authority procedures, and the availability of necessary documents. Generally, with the right support and guidance, the process can be completed within a few weeks. However, it may take longer if there are trust arrangements, co-owners, or additional approvals needed. A solicitor can streamline the process, helping to ensure that all paperwork is correct and promptly submitted.
-
Nash & Co Solicitors provides comprehensive support in navigating deferred payment agreements. Our team will review your situation, including any special circumstances like trusts or shared ownership, to ensure that the agreement meets all legal requirements. We’ll guide you through each step, from filling out forms to understanding the financial implications, so you feel confident in your decisions. By working with us, you can trust that the agreement is set up smoothly, correctly, and with your best interests in mind. For personalised assistance, don’t hesitate to call us on 01752 827047 — we’re here to help make the process as straightforward and stress-free as possible.
Related insights
Meet the Care Support team
Get in touch
Fill out the form below and let us know whether you would like us to call you, or email you. One of our Care Support team will be in touch as soon as we can.
If your enquiry is urgent then please call us on 01752 827047.
arrow_back Back to Care Support