You might be able to use the value of your home to help pay your care costs using a deferred payment. We'll pay your care home bills now and you repay us later when you decide to sell your home, or we can be paid back after your death.
You should get independent financial advice to help you decide how to pay long term care costs and make sure you're claiming all the benefits and allowances you can.
Apply for a deferred payment
It takes around 12 weeks to set up a deferred payment agreement.
The agreement will include the maximum amount that we'll pay towards your care, along with the interest rate and any fees we'll charge. It will also include certain conditions, such as how the property should be maintained.
You should get independent advice from a solicitor, financial advisor, or an independent organisation before signing a deferred payment agreement.
Who can get a deferred payment
You should be able to get a deferred payment agreement if:
- you live in a care home or you're moving into one soon
- you own your own home, which needs to be insured
- you have savings and investments of less than £23,250, not including your home or pension
Applying if your partner lives in your home
If you need care in a care home but your partner lives in your home then we'll look at their circumstances as well. We may not include the value of your home when we look at your finances to work out how much you'll have to pay towards the costs of your care.
If your partner has circumstances that mean the value of your home is included, you can still get a deferred payment agreement if your partner also signs the agreement.
The amount you can defer
The amount you can defer depends on how much your home is worth, so we'll have your property valued. You can also get an independent valuation if you want to.
Most people use around 70 per cent of the value of their home. We don't use the full value to make sure you have enough money left over to pay the costs of selling your house (like solicitor's fees) and to make sure we have enough money to pay for your care if house prices go down.
The cost of setting up a deferred payment agreement
We charge £625 to set up a deferred payment agreement which includes the cost of having your property valued. To cover our costs, we charge interest on the amount you owe us until the money is repaid. The interest rate is set by the government and reviewed every six months. From 1 July to 31 December 2016 the interest rate is 1.85 per cent.
When to repay a deferred payment agreement
You can repay a deferred payment at any time either by selling your house or if someone else (like a friend or relative) pays the bill. Or you can have a deferred payment agreement for the full length of your stay in a care home and it will be paid back from the sale of your home after your death.
Your deferred payment agreement ends automatically after your death, and your executor will have 90 days to arrange to pay back the money owed. If your executor doesn't pay within 90 days we can take them to court to get the money back.
Applying for someone that can't understand
Carers and families can help people to make decisions about their care and how to pay for it. If we think the person applying for the deferred payment agreement doesn't understand the agreement, or won't be able to understand it in the near future (such as someone with dementia), then another person may need to represent them. Only a person that is properly authorised, like someone with legal power of attorney, can represent someone in applying for a deferred payment agreement.