Deferred Payment Agreements
We help to make deferred payment agreements straightforward and safe.
A deferred payment agreement is a type of financial arrangement between an individual and a local council that can be used to pay for care home fees. While they can be an excellent option for those struggling with paying for care, you need the right support to ensure the terms are sound and if you run into any problems.
Our experts can guide you through entering a deferred payment agreement, whether for yourself or a loved one. We can also help if an application is turned down. This helps to keep your home safe and minimise any financial risk.
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- Charles Fraser
- Senior Solicitor and Head of Older and Vulnerable Client team
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- Victoria Wood
- Associate Solicitor in the Older and Vulnerable Client team
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How we can assist with deferred payment agreements
Our expert solicitors can offer full support with deferred payment agreements, including:
- Legal advice on deferred payment agreements
- Acting on behalf of a loved one
- Challenging a deferred payment decision
Have a question? Please read our deferred payment agreement FAQs or get in touch.
Reasons to choose Longmores for help with deferred payment agreements
- We have a dedicated Older and Vulnerable Client team with specialist experience in using deferred payment agreements for care home fees
- Our Private Client team is consistently ranked in leading client guide the Legal 500
- Several of the team are members of the prestigious Society of Trust and Estate Practitioners (STEP), providing further recognition of their exceptional expertise
- Senior Solicitor and Head of our Older and Vulnerable Client team Charles Fraser and Associate Solicitor Victoria Wood have both completed the STEP Advanced Certificate in Advising Vulnerable Clients
- We listen to you and answer your concerns in plain English
- No matter your situation, we make sure you get exactly the support you need
Speak to us about deferred payment agreements today
To discuss your requirements with our experts, please get in touch.
Our deferred payment agreements expertise
Legal advice on deferred payment agreements
If you need assistance to pay your care home fees and think you may be eligible for a deferred payment agreement, our solicitors can provide all the legal advice and assistance you will need. This is sometimes also referred to as a ‘deferred payment plan’.
On receiving confirmation that you qualify for a deferred payment agreement we can provide comprehensive legal advice, review the terms, explain your rights and obligations and assist with the implementation of your DPA.
We have worked with many clients who are entering into deferred payment agreements and can ensure that you go into the agreement with a clear understanding and with your interests protected.
Acting on behalf of a loved one
When entering into a deferred payment agreement, it is usually the case that the property owner must sign a legal document.
However, it may be that the person who needs to move into a care home no longer has mental capacity and, therefore, cannot sign legal documents. If this is the case, we can help you to act for your loved one, for example, where there is a Lasting Power of Attorney in place and you are acting as their representative.
Where there is no LPA in place, we can assist you to make an application to the Court of Protection, allowing you to gain the legal right to act on behalf of your loved one.
We appreciate that moving into a care home can be a daunting experience for your loved one and for you as the one supporting them. Our expert solicitors guarantee a sensitive service where all your questions will be answered promptly.
Challenging a deferred payment decision
If your application for a deferred payment agreement (DPA) has been rejected and you believe the decision to be wrong or unfair, our solicitors may be able to help to challenge the decision, depending on the circumstances.
Deferred payment agreements FAQs
How does a deferred payment agreement work?
The arrangement permits the person to use their property value in order to pay for their care home fees. It works much like a loan and, therefore, the individual is liable to repay the funds. Usually, the fees are repaid once the individual has passed away and their home is consequently sold.
When entering into a deferred payment agreement, the council will put a charge on the individual’s property. The legal charge ensures that the money is later paid back once the person’s home is sold.
Usually, it is not possible to use over 80% of a property’s value to pay care home fees. This is to ensure that the individual or their Will executor will later be able to cover the fees associated with selling the property.
Are deferred payment agreements a good idea?
If you need to move into a care home and you do not have the funds, deferred payments for care home fees can be a good option.
When you enter into a deferred payment scheme, you will only accrue debt against the value of your home during the time that you are in care, so it may also be useful for those who will be receiving care for a shorter time frame.
With support, you may be able to rent out your property to help you pay your fees. This income could assist you to retain the value of your property, which may help your loved ones after you have passed away.
What are the disadvantages of deferred payment agreements?
Whilst using deferred payment schemes can be a helpful option to pay care home costs, there are some issues you may need to think about, depending on your circumstances.
For example:
- You will need insurance for your home and this might be difficult to arrange if the property is unoccupied
- You will still need to pay for the ongoing maintenance of your property
- Renting out your property may prove to be challenging, practically speaking
- If there is a mortgage left to pay on your property, you will need to continue paying towards it
Do you have to pay back a deferred payment?
Yes, if you enter into a deferred payment scheme, you will need to sign an agreement to confirm that the money will be paid back when your property is sold. It is likely that this will take place once you have passed away.
What are the eligibility requirements for a deferred payment agreement scheme?
To be eligible for a deferred payment programme, the individual must meet the following criteria:
- Their assessed requirements will be met by the care offered in a care home
- They must not own in excess of £23,250 in assets (this figure excludes the value of the person’s property)
- Their home must not be occupied by a dependent family member or their spouse
It is also usually required that there is no mortgage remaining on the home. However, if the person meets self-funding criteria, they may be eligible even if they have a mortgage left to pay.
How can I access the deferred payment care scheme?
Individuals will need to make an application through their local council. You are advised to do so with the support of a solicitor, to streamline the process and ensure that you understand the legal terms.
How much can you defer on a deferred payment scheme?
The amount that an individual can defer on a deferred payment scheme depends on how much their home is worth, whether or not they have any amount left on the mortgage or if they are eligible for self-funding.
Generally speaking, it will be possible to use approximately 70-80% of the value of their home. As covered above, it is not an option to use 100% of a home’s equity (as this can cause financial issues when a home needs to be sold later).
Speak to us about deferred payment agreements today
To discuss your requirements with our experts, please get in touch.
