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Paying for residential and nursing care


Deferred payment agreements

Deferred payment agreements are only available for people receiving care and support in a residential or nursing care home or, at our discretion, if you are in supported living accommodation.

You may be thinking about applying for a deferred payment agreement to help you pay for the cost of your care. Before you apply we will give you plenty of information and advice so that you can make a fully informed decision about whether a deferred payment agreement is the best option for you and fully understand what you are signing up for.

We also recommend getting independent financial advice and information before entering into a deferred payment agreement, as there may be other ways to pay for your care.

What is a deferred payment agreement?

A deferred payment agreement gives you flexibility as to how and when you pay for your care and means you will not be forced to sell your home during your lifetime to pay for your care.

It is a legally binding agreement with full terms and conditions, which allows you to defer or delay paying some of the costs of your care until a later date. The costs deferred must be repaid in full in the future. We secure the amount being deferred by placing a legal charge against your property.

Who can apply for a deferred payment agreement?

We will offer you a deferred payment agreement if you:

  • have your care needs met in a residential or nursing care home
  • do not have savings and investments over the upper capital limit, not including the value of the house you live in
    have the value of your home included in your financial assessment
  • own your home, and there is enough equity in the value of that home for the deferred payment agreement to last as long as needed

How can I apply for a deferred payment agreement?

During your financial assessment, we will talk about whether a deferred payment agreement may be a suitable way of paying for your care. Our Client Financial Services Team will help you with the application form and, if your agreement is approved, we aim to have the agreement finalised and in place within 12 weeks of you moving into the care home.

Can my application be refused?

We may refuse your application when:

  • we are unable to secure a legal charge on your property
  • you don’t own your home, or there is not enough equity in the value of that home for the deferred payment agreement to last as long as needed
  • your property can’t be insured
  • you do not supply enough information to process your application
  • you do not agree to the terms and conditions of the agreement

How much can be deferred?

The minimum amount you can defer each week will be the difference between your assessed weekly contribution and the cost of your care. We will discuss and agree with you the actual amount you want deferred as part of your financial assessment.

There is a limit on the total amount you can defer. This depends on the value of your property, less any existing debt to be paid off (for example your mortgage) and standard deductions we have to make by law.

What will a deferred payment agreement cost?

There are a number of fees linked to deferred payment agreements.

You will be charged:

  • a fee for setting up a deferred payment agreement
  • interest on any amount you are deferring
  • administration fees at specific times during the course of the agreement, for example when we review your agreement or provide you with additional statements

You can choose to pay the fees and interest when they are charged, or you can add them to the amount being deferred. Any charges made only reflect the actual costs incurred by us to provide the scheme.

Fee type When charged Amount
Arrangement fee Upon application £400 + valuation fee (a)
Administration fee 50% equity revaluation (b) £21 + valuation fee (a)
Administration fee Review of agreement (c) £21 + valuation fee (a)
Administration fee Additional statement requests (d) £21
Percentage interest rate Interest will be charged from the start of the agreement and will be added on a compound basis Currently 4.65% (e)

Notes

(a) Any valuation fees we incur will be recharged to you at the actual rate.
(b) When the total amount deferred equals approximately 50% of the value of your property, we need to revalue your property to review and possibly adjust the maximum amount that you are allowed to defer.
(c) When the total amount deferred equals approximately 70% of the maximum amount you are allowed to defer, we will carry out a full review of the agreement. This is to review the cost of your care, discuss your future plans and the effect these will have on future costs, discuss when you might be eligible for Council support and consider if a deferred payment continues to be the best way to meet your
care costs.
(d) We will issue deferred payment statements on a six-monthly basis. Any additional statement requests will have a charge.
(e) Percentage interest rate is set nationally and reviewed on 1 January and 1 July each year.

Is the deferred payment agreement reviewed?

We will review your deferred payment agreement to make sure it remains the best option for paying for your care.

We will send you a statement twice a year showing:

  • the total amount you have deferred to date
  • interest and administration charges accrued
  • how much equity value remains in your property
  • a forecast of how quickly that equity will be used up based on the current cost of your care

You may also request an additional statement at any time during the year, but you will be charged for these.

When does a deferred payment agreement end?

Deferred payment agreements come to an end when:

  • the property has been sold and the amount owed has been repaid in full
  • you have died and the amount owed is repaid by your estate
  • you, or someone on your behalf, repays the amount owed in full
  • you no longer need care and support in a residential or nursing home
  • the equity value of your property has been reached and you become eligible for local authority funding
  • you have broken the terms and conditions of the agreement

Where can I get more information?

You can read our Deferred Payment Agreements policy.

Have a look at the deferred payment agreement application form and a sample deferred payment agreement.

You can also contact the Client Financial Services Team for information.

Write to:
Client Financial Services, Devon County Council
Room 180, County Hall
Topsham Road, Exeter
EX2 4QJ

Email: chargingforcareresidential-mailbox@devon.gov.uk

Phone: 01392 384391 (open between 9 am and 1 pm, Monday to Friday).

You may want to print this information off so you can refer to it whenever you need to.

The Money Advice Service and GOV.UK provide more information on deferred payment agreements.

You should always think about getting independent financial advice and information on paying for care.


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