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ASK OUR ADVISER - What is a Deferred Payment Agreement?

A deferred payment agreement is a long-term loan you can request from your local authority to fund your care fees if you own your home.

It is effectively a bridging loan to cover your care home costs, using your home as security.

Under a deferred payment agreement, the council will pay your care home fees and secure the loan against your property. You can delay repaying the loan until you choose to sell your home or until after your death.

Who is eligible for a deferred payment agreement?

Before you can apply for a deferred payment agreement, you must have been assessed by your local authority as needing to move into residential care, or already be living in a care home.

When you apply, the local authority will carry out an assessment of your financial circumstances. Councils should offer deferred payments if you meet the following criteria:

You have savings or other capital (excluding the value of your home) of less than: £23,250 in England, £18,500 in Scotland, £50,000 in Wales

You own your home and there isn't anyone else living in the property, such as a spouse or partner, a child or a relative aged 60 years or over.

If all your money is tied up in property and you don't want to sell your home, a deferred payment agreement could help you pay for care.

You will have to pay interest and the debt will accumulate against your property so the option does need careful consideration. Your local authority will suggest you seek independent advice before taking out the loan and The CareAware helpline can help if you consider the pros and cons.


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