Deferred payment agreements
Deferred payment agreements
1. About deferred payments
You might be able to use the value of your home to help pay your care home costs, without having to sell it. We could help to pay your care home bills now and you repay the money to us if you decide to sell your home later, or after your death.
A deferred payment agreement is only one way to pay for care. You should get independent financial advice to find out more about your options.
2. Who can get deferred payments
You may be able to get a deferred payment agreement if:
• you own your own home
• you live in a care home or you're moving to one soon
• you have less than £23,250 savings and investments, not including your home or pension
You shouldn’t need a deferred payment agreement if you're still living in your own home. There are other ways for you to pay for your care, including support if you have less than £23,250 in savings and investments.
3. How much you can defer
The amount you can defer depends on how much your home’s worth, so we'll arrange to have it valued. You can also ask for an independent valuation.
Most people can use 80% to 90% of the equity in their home. We don’t allow you to use all of the equity to protect you from not having enough money to pay sale costs of your property and to protect us against a drop in housing prices.
4. Costs of setting up a deferred payment
There’s a set up fee of £500, with a £100 charge every year.
The interest rate is 1.45% This is reviewed every six months.
Deferred payment agreements charging (pdf, 264 KB) (opens new window)
5. Repaying a deferred payment agreement
Deferred payments should mean that you won't have to sell your home in your lifetime unless you want to. The money owed to us for care home bills paid on your behalf will need to be repaid eventually. This is usually done in one of two ways:
Repaying if you sell your home
You can sell your home and repay the deferred payment agreement at any time. Or someone else, such as a friend or relative, can pay the bill without you needing to sell your home.
Repaying after your death
You can have a deferred payment agreement for the full length of your stay in a care home and pay it back from the sale of your home following your death.
Your deferred payment agreement will end automatically following your death and your executor will have 90 days to arrange payment of the money owed. Interest charges will continue to be added during this time. We can recover the amount owed through the courts if your executor doesn't repay within 90 days.
6. Who can live in your home
It's up to you who lives in your home if you have a deferred payment agreement, but you must maintain and insure it as long as you have the deferred payment agreement. This can be cheaper and easier if someone's living there. You could rent it out and use the income to reduce the amount you've asked us to defer.
If your partner lives in your home
If you need care in a care home but your partner lives in your own home, then we'll consider their circumstances as well as your own. We might not include the value of your home when looking at your finances to work out how much you'll have to pay towards the costs of your care.
If your partner has circumstances that mean we still include the value of your home when working out how much you can pay towards the cost of your care, you may still be able get a deferred payment agreement, as long as they sign the agreement too.
7. People with dementia
Carers and families can help people to make decisions about their care and how to pay for it. If we're concerned that the person applying for the deferred payment agreement can’t understand it, then another person may need to represent them. This person must be properly authorised, with legal power of attorney.
8. Apply for a deferred payment agreement
After we have confirmed your eligibility to financial support from us we will ask one of our Finance officers to talk to you.
If you're interested in a deferred payment agreement then discuss how to apply with the officer.
It usually takes less than 6 months to set up a deferred payment agreement. It could take longer if you need:
- an Attorney or Court of Protection Deputy to act on your behalf
- to register your property on the Land Register
- the legal consent of co-owners to the deferred payment agreement