A Deferred Payment Agreement (DPA) is an arrangement that can enable people to use the value of their homes to help pay for their care home costs.
If you are eligible, Slough will help to pay your care home bills on your behalf. The amount that Slough pays will be secured by a legal charge against your home. This can delay the need to sell your home as you make the transition into care.
You will still be required to contribute towards the cost of your care based on a financial assessment of your income, savings and other capital.
There is a fee for setting the arrangement up, and interest will be charged on the amount owed.
Subject to adequate security (see below) and acceptance of terms and conditions, Slough will offer you a DPA if you meet all three of the following criteria at the point you apply:
There may be other circumstances in which Slough could offer you a DPA at its discretion, for example if you wish to use the equity in your home to help pay for care in a more expensive setting.
Entitlement to a DPA applies equally, whether your care is wholly or partly council-funded, or you fund the costs of your own care.
Slough will need to make sure that you have the capacity to understand the agreement you are entering into. If we are concerned that you do not have the capacity to understand, or will not have capacity to understand in the near future, then a properly authorised person will need to represent you. If you already have a Finance and Property Attorney or a Deputy, we will need evidence of this before they can sign the DPA on your behalf. If you do not have a Finance and Property Attorney or a Deputy, an application will need to be made to the Court of Protection:
A DPA will normally be secured by a first legal charge on your home. If your home is not registered with the Land Registry, your own solicitor will need to register it. Slough may at its discretion accept other forms of security, and will consider each case on its merits.
Where the property is jointly-owned, both owners’ consent to the charge will be required. Similarly, where someone else has a beneficial interest in the property, their consent will be required.
The amount you can defer will depend on the value of your home, which determines your ‘equity limit’. This will be calculated using the following formula:
Value of the property
less the lower threshold set by the Department of Health (for 2015-16 this is £14,250, which is reviewed annually)
less any other charges on the property
To determine the value of your home, Slough will obtain a valuation, the cost of which will be added to the deferred amount unless you have agreed to pay this separately. You may also, if you wish, obtain your own independent valuation.
In considering a request for a discretionary DPA, eg to help pay for care in a more expensive setting, Slough will consider with you the sustainability of the proposed arrangement – how long you would be able to defer your care costs for.
The DPA may be terminated in three ways:
On termination, the full amount due (including care costs, interest accrued and any fees added to the deferred amount) must be paid to the council. In the case of payment from your estate, responsibility for arranging repayment falls to your executor.
There is a fee for setting the arrangement up. For 2015-16, this is £595. In addition to this, you will need to pay certain disbursements:
These costs will normally be added to the deferred amount, unless you have agreed to pay them separately.
Interest will be charged on the deferred amount on a compound basis until the debt is repaid. The rate of interest is currently 1.85%, effective from 1 July 2016, and is normally reviewed every 6 months, in June and December. Interest will continue to accrue even when the equity limit has been reached.
An advantage of a DPA is that you can claim Attendance Allowance (or, if you are under 60, the care component of Disability Living Allowance) while you are in residential care. This means that you will have extra income to contribute towards the weekly cost of your care, and will help reduce your progress towards the equity limit.
While a DPA is in effect the maximum ‘disposable income allowance’ used in your financial assessment will be £144 per week, although you may, if you wish, choose to keep a lower amount.
For further information,
contact Adult Social Care Services on 01753 475111
or email email@example.com