The Deferred Payment Agreement (DPA) is designed to help you if you have been assessed as having to pay the full cost of your residential care or extra care placement - but you cannot afford to pay the full weekly charge because most of your capital is tied up in your home.
The DPA offers you a loan from Hull City Council using your home as security. It doesn’t work in the same way as a conventional loan - the council does not give you a fixed sum of money when you join the Agreement, but instead pays an agreed part of your weekly care and support bill based upon the available equity in your home.
How it works
In most cases the property is not taken into account for the initial 12 weeks of entering permanent -
- residential
- nursing care
- extra care
in a registered care home or extra care facility.
You will pay a weekly contribution towards your care that you have been assessed as being able to pay based upon your income and savings. The council pays the part of your weekly charge that you cannot afford until the equity in your home has been used up, this is your ‘deferred payment’.
The deferred payment builds up a debt, which is cleared when the money tied up in your home is released. For many people this will be done by selling their home, either immediately or in the future. You can also pay the debt back from another source if you are able to.
However, you do not have to sell your home if you do not want to. You may, for example, decide to keep your home for the rest of your life and repay out of your estate, or you may want to rent it to generate income. If you do this you will be expected to use the rental income to increase the amount you pay each week, thus reducing the weekly payments made by the council and therefore minimizing the eventual debt.
Qualifying for a DPA
To apply for the DPA you must -
- have capital (excluding the property) of less than £23,250
- be professionally assessed as requiring and be entering permanent residential / nursing care / extra care in a registered care home or extra care facility
- own or have part legal ownership of a property which is not benefiting from a property disregard (the council will determine this)
- your property must be registered with the land registry -
- if the property is not, you must arrange for it to be registered, the council can do this for you but it will be at your own expense
- have the mental capacity to agree to a DPA or have a legally appointed agent willing to agree this
If your partner lives in your house
Provided your partner lives in the property as their main or only home, and that you are not estranged or divorced, the council will exclude the value of your home when it assesses how much you will have to pay towards the costs of your care. This means that you should not face having to sell your home to pay for care and you will not need a deferred payment agreement.
If you and another person part-own your property (that isn’t disregarded) and you would otherwise be eligible for a deferred payment, you should still be entitled to a deferred payment whilst in the agreement.
You will need to -
- have a responsible person able to ensure that necessary maintenance is carried out on the property to retain its value
- insure your property (copy of buildings insurance must be provided)
- pay your contributions in a timely and regular manner. If you fail to pay your contributions on a regular basis the council reserves the right to add this debt to the loan amount