Deferred payment agreements

What will it cost?

Arrangement fees

If you take out a Deferred Payment Agreement (DPA),  you will need to cover the costs the council incurs in setting it up and managing it.

Council fees

  • One-off set-up fee: £800.00
  • Annual administration fee: £200.00

These fees cover the cost of arranging and maintaining your agreement.

Additional costs (disbursements)

You may also need to pay for:

  • Property valuation (and re-valuation, if needed)
  • Land Registry charges and related legal costs.

These costs will usually be added to your deferred payment amount, unless you ask to pay them separately.

Other costs to consider

You will also need to pay for your own legal advice or representation, such as fees for a solicitor.

Interest

Interest will be charged on the deferred amount on a compound basis, until the debt is repaid. The current rate of interest is charged at the rate given by government guidance for interest. The rate is normally reviewed every six months, in January and July. Interest will continue to accrue even when the equity limit has been reached.

Attendance Allowance

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, which will help reduce your progress towards the equity limit.

Effect on financial assessment

While a DPA is in place, the maximum ‘disposable income allowance’ used in your financial assessment will be determined by DPA Guidance, although you may choose to keep a lower amount, if you wish.