When you apply for a DPA, the Council will need to assess your financial circumstances and see how much you can afford to contribute towards your care costs before they will agree to pay for care home fees on your behalf.

You should still pay the weekly contribution towards your care that you have been assessed as being able to pay from your income, i.e. pensions and other savings and the Council will pay the remainder of your weekly costs direct to the care home. The maximum amount lent under a DPA will usually be 90% of the value of the property. If the total amount deferred reaches the maximum amount and you are unable to pay your own costs, you may become eligible for funding from the Council. If the Council do fund your placement, the Council will only pay up to the amount agreed to meet your assessed needs. This may mean that you, or someone on your behalf, may have to pay an extra amount towards the cost of more expensive care than the Council has assessed that you need. If you are unable to meet these payments, you may have to move to a different residential care setting.

• If you own the property you lived in before going into long-term residential care, and the property is part of the financial assessment, the Council may disregard your property for up to 12 weeks from the start of your long-term care. The 12-week period of disregard of your property gives you the space and time to make decisions on how you want to pay your contribution to the cost of your care needs, which may include entering into a DPA. During this time, you will need to pay your assessed contribution.
• Once you the DPA, the Council will register a first Legal Charge on your property and a restriction on the title ensuring no disposition is made without the Council’s consent. This means that you will be unable to sell or transfer ownership of the property without repaying the debt. A DPA will become effective after you have been in a care home for 12 weeks or more. Short-term stays in care homes will not be covered.
• If you rent out your home while you have a DPA in place, we will expect you to use the rental income towards the cost of your care to reduce the amount of the deferred payment.

To be eligible to enter into a DPA to assist with your care home funding the following needs to apply:

• the value of your savings, investments and capital (not including the value of your home) has to be less than £23,250
• own all or part of the property that is your main or only home
• if the property is jointly owned, all parties agree to enter into legal documentation (see note below)
• you have been assessed by a social care worker as needing residential care
• you are currently living or going to live permanently in a registered residential care or nursing home
• you have the mental capacity to enter into a DPA or have a legally appointed Attorney or Deputy who is willing to do this for you
• you, and any co-owners, agree to the Terms and Conditions of the DPA by signing both the DPA and the Legal Charge to be registered as a first charge against the property

Jointly owned properties

For a jointly owned property, all the named owners will need to sign the DPA and the Legal Charge which will be registered as a first Legal Charge being placed against the property. In the event of a sale, all owners will not object to the sale of the property for the purpose of repaying the deferred amount to the Council. It is recommended that all co-owners should be advised to seek independent legal advice before signing the DPA and Legal Charge.

Other occupiers

With regard to other occupiers (not registered owners), details should be declared and it will be a requirement for any occupier to sign an Occupier Waiver consent agreeing that their interest (right of occupation) in the property is waived and in the event of the sale of the property for the purpose of repaying the deferred loan amount in favour of the Council their interest in the property will come to an end. It is recommended that indepen­dent legal advice is sought before signing the Occupier’s Waiver consent.

You will not be able to enter into a Deferred Payment Agreement if:

• your home is not counted in the financial assessment of how much you can pay towards the cost of your care
• you lack the mental capacity to enter a DPA and there is no legally appointed person to do this for you
• the Council are unable to secure a first Legal Charge on your property (for example, if you have a mortgage or equity release agreement)
• you do not accept the terms and conditions of the DPA.
• you are receiving care in your own home rather than living in residential care home

It is also key to consider whether there is another person living with you who needs to reside in the property. If someone lives with you who will remain living, there (and will need to stay in the long-term) you will not be able to access a DPA. This includes spouses.

The value of your home will not normally be included in the financial assessment if:

• you have lived in a care home for less than 12 weeks as a permanent resident
• you are only staying in a care home temporarily
• your partner, a child under 18 or a relative (as defined in the Care and Support Charging and Assessment of Resources Regulations 2014) who is over 60 or disabled still lives in your home

If your DPA application is refused, the Council will write to explain the reason why your application has been refused and advise you of your right to complain. We cannot advise you on how to fund your care should your application be refused.

The maximum the Council can defer against the value of your home (the ‘equity limit’) is 90% of its current market value, less £14,250. When the amount you have deferred reaches 50% of the equity limit, the Council will re-value your property to check the amount of equity remaining.

Disposable income allowance

You have a right to keep a proportion of your income. The Disposable Income Allowance (DIA) is a fixed amount of up to £144 a week of your income, which you can keep paying for ongoing house insurance, property maintenance costs and to cover your weekly spending needs.

If you prefer, you may choose to keep less of your income than the maximum £144 a week so that you can contribute more to the cost of your care from your income. This would mean that you could reduce the amount of your deferred payment and, as a result, reduce the amount of the interest you have to pay.

During your financial assessment we will ask you how much of your weekly income (up to a maximum of £144) you want to keep.

You cannot use the Disposable Income Allowance to:

• top up the overall cost of the weekly care home fee
• pay for services which the care home should normally include as part of its care package to residents

Property valuation

The Council will require a valuation on the property. Therefore, reasonable access will be required in order that a visit can be made to the property to assess the property with a view to compiling a valuation report. If reasonable access is not allowed the Council will not be able to consider a DPA. A market value of the property must be obtained to establish that there is sufficient equity in the property on which to continue with the DPA. If the 90% maximum lending is reached, a further valuation of the property may be required. You may request an independent assessment of the property’s value at your own expense (in addition to the Council’s valuation).

The amount you will pay back is made up of:

• the amount the Council has paid towards your care costs
• any administration charges detailed in the DPA that you have chosen to include in the deferred amount; and
• interest on the deferred amount and any unpaid assessed amounts

The Council will charge administration fees to arrange and manage a DPA. The fees are simply to cover our costs and not to make a profit. They will meet the costs of legal fees, Land Registry fees and administrative costs.

The administration fee of £1,082 (2024/25) can either be paid at the beginning of the DPA or added to your deferred debt.

If the Council arranges a re-valuation of your property, the cost of this re-valuation will also be charged to you as an administration cost. If this is required, the cost of re-valuation is £370 (2024/25) and can also be deferred.

Interest

The loan will have interest charged on it in the same way a normal loan would be charged on money borrowed from a bank. Interest will be charged on the deferred amount for the whole period that the DPA is in place and will form part of the amount owed. The amount charged is set nationally twice yearly in Government Office of Budgetary responsibility reports. The rate of interest may therefore change between starting discussions and the time that you sign the DPA. Interest will be charged on the deferred amount, including any deferred administration charges, and compounded daily interest will be charged on the deferred amount.

If you decide to enter into a DPA, you will sign a Legal Contract or agreement with the Council – this legal contract is the DPA. The Legal Contract covers both the Council’s and your responsibilities. To be accepted for a DPA, you must meet certain requirements and the Council must be able to gain adequate security for the loan. The Council will do this by placing a ‘Legal Charge’ or mortgage on your home. The Legal Charge must be registered as a first Legal Charge.

As you will be signing a legal document, we would always recommend that you seek independent legal and financial advice before signing.

You, or someone acting on your behalf, can pay off the loan and end the agreement at any time. For example, you may decide to sell your home and pay off the loan.

There are circumstances in which the Council may stop deferring costs for your care. For example:

• if the amount you owe on the DPA has reduced the value of your savings and investments (including the value of your property) to a level where you become eligible for Council support
• if you no longer need to be in a care home
• if you do not keep to the requirements of the DPA
• if your home is no longer included in the assessment of your finances for any reason and you then become eligible for funding from us, you will still have to pay the interest that builds up on the amount of money we have already deferred
• in certain exceptional circumstances, if a husband, wife or relative (as defined in the Care and Support (Charging and Assessment of Resources) Regulations 2014) has moved into the property after the DPA started
• if a relative who was living in the property at the time the DPA started becomes a dependent relative

If you do not end the DPA, it will finish when you die, and the loan will need to be paid from your estate within 90 days. You will still have to pay the interest that builds up on the amount of money we have already paid for your care.

• you will have a copy of the DPA you signed
• twice a year we will send you a full written statement to advise you of the debt accrued, which will include the amount of care costs deferred, the administrative charges applied and the total amount due. We will also advise you of the current interest rate being charged
• you can request a written statement on the current situation of your DPA at any time and we will send it within 28 days

The Council will not continue to defer any further costs and charges under the DPA if any of the following circumstances apply:

• if your total assets, including the value of your property, fall below the level of £23,250 and you, therefore, become eligible for support from us to pay for your care
• if you breach certain predefined terms of the DPA and it is not possible to resolve the issue
• if the property becomes disregarded under charging regulations, including:
  • where a spouse or dependent relative has moved into the property after the DPA is made and this means you become eligible for our support in paying for care and therefore no longer require a DPA
  • where a relative who was living in the property at the time of the DPA subsequently becomes a dependent relative (as defined in charging regulations)
• if you reach the ‘equity limit’ that you are allowed to defer. This also applies when the value of the security has dropped and so the ‘equity limit’ has been reached earlier than expected
• if the Council refuse to defer any more charges for you, your social care practitioner will discuss the situation with you. The DPA remains in place in respect of the costs deferred prior to this refusal. The Council will continue to add interest to the deferred amount

When you enter into a DPA, you must sign legal documentation (including the Legal Charge) with the Council. This will state that any money owed will be paid when the DPA ends. The Council will ensure that outstanding monies and future charges are paid by applying to the Land Registry and placing a first Legal Charge and Restriction over your property. Once the outstanding amount has been repaid the Legal Charge and restriction over the property will be removed.

If you sell your home whilst you are still resident in a care home, any outstanding monies have to be paid within 56 days.

If you die, then any outstanding money has to be paid within 90 days of your death.

The Council will allow the property to be rented. However, if this is your plan you will need to notify the Council and seek permission. You will also need to provide a copy of the Assured Tenancy Agreement for a term of no more than 6 months in accordance with the DPA and bear the cost of ensuring the property is insured and maintained throughout the rental period and provide such documentation to the Council.

• the obvious benefit of a DPA is that the Council will pay for your care home costs, so you do not need to find the money straight away
• you will still own your home whilst you are in care, and will therefore continue to benefit from any rise in house prices, which in effect will be helping to meet your care costs
• a DPA could be used as a ‘bridging loan’ to give you time and flexibility to sell your home when you choose to do so
• your debt is cleared when the money tied up in your home is released. This is usually by selling your home. However, you can also pay the debt back from another source if you want to; for example, the repayment could be made by a third party, or it could be paid back from another asset such as a life insurance policy
• it might be possible to let your property and use the rent towards your fees
• You can carry on claiming Attendance Allowance if you pay the full cost of care as well as Disability Living Allowance (care component) and Personal Independence Payment (daily living component) if you are entitled to any of these benefits. Check with the Department of Works and Pensions to see whether you are entitled to claim these benefits
• you can terminate the agreement at any time, but you will need to repay the full amount due, including administration costs and interest

We strongly recommend that you obtain independent financial and legal advice before you decide whether a DPA is right for you. You will need to do the following:

• ensure that your home is registered with HM Land Registry. If it is not, you must arrange and pay for it to be registered
• if you are making the application as a Deputy, the Council needs to see the original order granting Deputyship or provide copies certified by a Solicitor
• if you are making the application as an Attorney, the Council will need to see the original Power of Attorney appointing you as Attorney or providing certified copies by a Solicitor. If the Power of Attorney is in joint names, you must confirm if one or both Attorneys will be signing the DPA
• provide original or certified copies of any Death Certificates of deceased joint owners if any
• provide to the Council’s legal department ID1 forms for verification of identity as well as any other requirements they request for all parties. This may require attending a Solicitors office
• if another party has an interest in your home, the Council will require their written agreement, consent including an Occupiers Waiver before you can enter into a DPA and Legal Charge
• The Council’s Legal Charge takes priority to and ranking before any interest the person has in the property or other asset which will be the subject of the Legal Charge
• have a responsible person who is able to make sure that any necessary maintenance is carried out on your home (you will continue to pay for maintenance from your Disposable Income Allowance)
• continue to insure your home at your own expense and give us evidence that there is appropriate insurance in place before the application and on expiry of the building’s insurance policy. If your home cannot be insured for any reason, you will not be able to enter into a DPA.
• pay your assessed contributions to your care costs on time
• supply the Council with information about whether the property was purchased under the right-to-buy scheme and whether there are any penalties for selling a right-to-buy property within a given timescale (normally 5 years from purchase)