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14th February 2021

Care home deferred payment agreements on the rise

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Local Authorities appear to be increasingly willing to enter into deferred payment agreements, granting people flexibility when dealing with their care costs. There are currently over two hundred million pounds’ worth of agreements in place across the country.

A deferred payment agreement (DPA) is an agreement between the Local Authority and an individual looking to fund their care home costs.

The DPA is effectively a loan from the Local Authority, secured against the property of the person who requires care.  They are available for those without significant savings who do not want to have to sell their house in order to pay care fees. In exchange for the security against the property, the Local Authority will fund the care costs (either by paying the care home directly, or by paying instalments to the individual) meaning that the house does not have to be sold immediately.  The sums loaned under the DPA are repayable to the Local Authority on the earlier of the individual selling the property or shortly after their death. It is possible to negotiate with the Local Authority and secure a longer repayment period after death, which can make things significantly easier for the executors of the estate.

If you need advice on planning for care costs during your lifetime, or on dealing with a DPA after somebody has died, please contact one of our team of experts below.

Kelly Wardell on 01223 532722 or click here to email Kelly.
Alexandra Svennevik on 01604 463342 or click here to email Alexandra.