Deferred payment agreements for long-term care
A deferred payment agreement can be used if you need to move into a care home but don't want to sell your home during your lifetime to pay for your care.
If you are eligible, we will help to pay your care home bills on your behalf. You can delay repaying the council until you choose to sell your home, or until after your passing.
You are likely to be eligible for a deferred payment agreement if:
- you are receiving care in a care home (or you are going to move into one soon)
- you own your own home (unless your partner or certain others live there)
- you have savings and investments of less than £23,250 (not including the value of your home or your pension pot)
How it works
In a deferred payment agreement, we pay your care home bills on your behalf (up to an agreed limit, which depends on the value of you home).
In return, we take a legal charge on your property as security. This allows us to reclaim the money you owe from the money received when your house is sold.
How much you can defer
The amount you can defer will depend on the value of your home. This is limited to 75% of your home's value.
This limit helps to protect:
- you from not having enough money to pay sale costs of the property
- the council against a drop in housing prices
- an initial set-up fee of £640 for a deferred payment agreement
- an annual maintenance fee £95 per year
There is also an interest charge on the amount deferred. These fees and charges will be added to the amount due on sale of the property.
Maintaining your property
If your property remains empty, you will need to maintain it, which will mean paying for things like:
- house insurance
- heating (to prevent damp and frost)
- any maintenance or ground rent
If you rent out your property, we will expect the income to be contributed towards your care home costs with your other available income.
This reduces the amount to be repaid when your property is sold.
Requirement to sell
Your deferred payments will become due from your estate if you pass away.
This may mean that the property will have to be sold, even if there are people (including family members) living there.
Find out more
Find out more about how deferred payment agreements work on the Money Advice Service website.