Paying for care under a Deferred Payment Agreements (DPA)

Reasons to choose Wilson Browne

What is it?

An agreement between you (or your Attorney or Deputy on your behalf) and your Local Authority that let’s you use your home to cover the cost of your care. It means you do not have to sell your home immediately.

How does it work?

Your Local Authority will pay for your care and be repaid later when the property is eventually sold.

There will be a contract which you sign, agreeing the terms of the agreement and the Local Authority will put a legal charge on your property securing the debt. If they are unable to put a charge on the property for any reason, they are unlikely to go ahead with a deferred payment agreement.

How do I know if I am eligible?

Your local authority agrees you have care needs that mean you need to be in a care home and your placement is permanent.
You have less than £23,250 in savings
You own your home.
The home is no disregarded for any reason.

Do I have to pay charges to enter a DPA?

There is usually an administration fee for setting it up and there may be other charges for revaluing the home later.

These costs may be added to the debt figure and included as part of the DPA rather than you having to pay these out of any available funds you have.

Interest may be added to the DPA, the Local Authority should send you statements, so you are aware of what they are charging and what the debt figure is.

When do I repay the Local Authority?

When you sell your home
Or when you pass away (either when the property is sold or 90 days after the date of your death, whichever is earliest).

Why would you enter a DPA?

So, you can keep your home and the value of the property may increase to cover your care costs for longer
You may want to rent your property out to help pay for your care.

Things to consider before entering a DPA:

You will still have to pay for the maintenance of the property.
You will still have to pay for insurance and utilities (unless you rent it out)
You may still have to pay a mortgage.
If your property depreciates then you may end up with less money
If you jointly own the property, they must agree to the DPA too and agree to the property being sold so the Council can be repaid. It is important to note that

If you have been asked to enter into a deferred payment agreement, you should get advice beforehand. We can offer fixed-fee advice meetings to talk through the DPA and your available options.