What is a deferred payment agreement?
A deferred payment agreement is an arrangement with the council that will enable some people to use the value of their homes to pay for their residential care costs.
A deferred payment agreement can help you if you have been assessed as having to pay the full cost of your residential care but cannot afford to pay the full weekly charge because most of your capital is tied up in your home.
The scheme offers you a loan from the council, giving you flexibility about paying your care costs. It doesn’t work in the same way as a conventional loan as the council does not give you a fixed sum of money, but pays an agreed part of your weekly care and support bill for as long as is necessary.
You will pay a fee to us to cover the cost of us arranging the loan and where required placing a charge on your property. The loan will also have interest charged on it in the same way as money borrowed from a bank. The interest rate is fixed by the government.
To make sure this webpage does not get out of date, the values or these fees and interest charges are shown on our Fees Costs and Allowances webpage which we update each April.
You will pay a weekly contribution towards your care from your income or other savings. The part the council pays is your ‘deferred payment’, which builds up as a debt which is cleared when the money tied up in your home is released. You can also pay the debt back from another source if you want to.
Who can apply for a deferred payment?
You may be eligible for a deferred payment agreement if:
- You have been assessed by the council as needing permanent care in a residential care or nursing home
- You own, or part own, your property
- You have less than the national “upper capital limit” assets or savings (not including the value of your home) See our information on Fees Costs and Allowances which we update each April.
Considering your options
A deferred payment agreement is only one way to pay for care, and will suit some people's circumstances better than others.
- You may choose to rent out your property, which could give you enough income to cover the full cost of your care. This way, you will not accrue a debt or be liable for interest and administrative charges.
- You may choose to pay the full cost of your care from your available income, savings, or assets.
- There are also various equity release products which may be more suitable for you.
You should always take independent financial and legal advice to help you decide which course of action will be financially better for you and consider the effect on any benefits you receive.
Because property, loans and DPA are legally complicated and a financial risk for both you and the council, it is a condition of the Sandwell DPA scheme that you must seek independent financial advice – in your own interests, we will not complete a DPA application without evidence of such advice being received.
The Financial Conduct Authority has a range of easy to understand advice and information on finding and choosing an advisor.
Applying for a deferred payment agreement
For advice and further information on deferred payments, please contact our Community Care Business Unit (who also deal with financial assessments). A member of the team will guide you through the options that are available to you under this scheme, our process and paperwork, and the scheme conditions, and give you the opportunity to ask questions.
Email: CHT_CCBU@sandwell.gov.uk
Tel: 07887 826455 or
07887 893539 or
07766 780242