Deferred Payment Agreements for care home fees
When a loved one needs to enter a care home, the financial requirements can be daunting. If someone has a property but lacks immediate funds, a Deferred Payment Agreement (DPA) might be the answer. This option allows local authorities to cover care home costs temporarily, placing a charge on the property. When the property is sold, the deferred fees are repaid to the local authority.
Deferred payment agreements are not something most people plan for—they often arise suddenly, adding to the stress of an already challenging time. That’s why Nash & Co Solicitors is here to guide you through this process with clarity and compassion, giving you the necessary information and helping you make the right decisions for you or your loved one’s future.
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Frequently asked questions
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A deferred payment agreement is a scheme that helps people cover care home fees when they don’t have accessible funds but own property. Instead of selling the property immediately, the local authority pays the fees and places a charge on the property. This is especially beneficial for individuals who want to retain ownership of their home for as long as possible. It provides the financial support needed to cover care without forcing a quick sale, which can be a relief for families during a difficult time.
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When a deferred payment agreement is set up, the local authority pays the care home fees on behalf of the person needing care. In return, the authority places a charge on the property, similar to a mortgage. Over time, this charge accumulates to cover the fees paid. When the property is eventually sold, usually after the person’s passing, the debt is settled from the proceeds. This arrangement allows families to manage the cost of care without having to rush into selling a home or depleting other assets.
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Generally, a deferred payment agreement is available to those who:
Are moving into a care home on a long-term basis.
Own a property or have equity in a property that can serve as collateral.
Do not have sufficient income or savings to cover care home fees directly. Eligibility requirements may vary, and it’s important to check with the local authority. Some situations, like joint ownership or property held in trust, might require additional consideration or legal advice to confirm eligibility.
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No, one of the main benefits of a deferred payment agreement is that it allows you to delay selling your home. The local authority covers the care costs, allowing you to keep the property until a time that suits you or your family. The fees and any accrued interest are only paid back when the property is eventually sold, which can bring peace of mind and stability at a time when immediate funds may not be available.
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When a property has multiple owners, the deferred payment agreement may still be an option, but there are additional factors to consider. The local authority will need to assess the agreement in the context of all ownership interests. This could mean that the co-owner(s) need to provide consent, or that certain legal terms must be adjusted. Seeking legal advice ensures that the interests of all owners are protected, and that the agreement is set up correctly and fairly for everyone involved.
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Yes, it’s possible, but this can make the process more complex. Trusts can affect eligibility and how the deferred payment agreement is structured. The local authority may need specific details about the trust’s terms and beneficiaries, as this could influence how fees are recouped. Consulting a solicitor helps clarify what’s possible in your unique case, ensuring that the deferred payment agreement aligns with the trust’s legal structure.
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Most deferred payment agreements do have an interest rate applied to the outstanding balance, which means the total amount owed will gradually increase over time. The rate is generally set by the local authority and may vary annually. Interest starts accumulating from the date the agreement begins. A solicitor can help you understand the interest rate details, ensuring you’re aware of the potential costs involved over the duration of the agreement.
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Deferred payment agreements can be legally complex, particularly when there are specific ownership arrangements, trusts, or family members involved. A solicitor provides crucial guidance, ensuring that all terms are clear, accurate, and tailored to your situation. Some local authorities require independent legal advice before finalising the agreement, and a solicitor can help prevent any misunderstandings or issues later. Their expertise ensures that your rights are protected, and that you’re fully informed about the financial commitment.
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The time to arrange a deferred payment agreement can vary depending on the complexity of the property ownership, local authority procedures, and the availability of necessary documents. Generally, with the right support and guidance, the process can be completed within a few weeks. However, it may take longer if there are trust arrangements, co-owners, or additional approvals needed. A solicitor can streamline the process, helping to ensure that all paperwork is correct and promptly submitted.
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Nash & Co Solicitors provides comprehensive support in navigating deferred payment agreements. Our team will review your situation, including any special circumstances like trusts or shared ownership, to ensure that the agreement meets all legal requirements. We’ll guide you through each step, from filling out forms to understanding the financial implications, so you feel confident in your decisions. By working with us, you can trust that the agreement is set up smoothly, correctly, and with your best interests in mind. For personalised assistance, don’t hesitate to call us on 01752 827047 — we’re here to help make the process as straightforward and stress-free as possible.
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