Deferred Payments

This page contain information on deferred payments available to people in Wiltshire including:Direct Payments

What is a Deferred Payment?

A deferred payment is a loan, whereby the Council will pay the net care costs on your behalf and defer receiving the payment back from you until some point in the future (usually when the house is sold or upon your death). Your property will be used as security to repay the loan. The scheme was introduced nationwide on 1st April 2015. Its aim is to ensure you do not have the sell your home to pay for care during your lifetime. The council offer Deferred Payments whether you have decided to sell your home or not.

What is a Deferred Payment Agreement DPA?

This is a legal agreement between you and the Council and allows the council to apply a charge on your property and provide it with security to pay back the loan. The agreement will need to be signed by you and anyone who stands to financially benefit should the property be sold. Until the agreement is in place and the subsequent charge registered with the land registry the Council will not make any payments for care fees. It is strongly advised that you seek legal advice before entering into a DPA.

Am I eligible for a Deferred Payment?

You are eligible for a DPA if:

  • You have been assessed as having eligible needs, which the Council decides should be met through a permanent care home placement, extra care, sheltered accommodation or though supported living
  • You own a legal or beneficial interest in a property which is your only home
  • You have less than the upper capital limit in assets excluding the value of your only home
  • Your home is not disregarded as an asset
  • You, and anyone with a beneficial interest in the property, agree to the terms and conditions set out in the Deferred Payment Agreement and return the signed agreement
  • You are able provide adequate security for the debt, by way of a legal mortgage or land registry charge over your property
  • You have capacity to enter into a legal agreement, or someone who has the legal right to make this decision on your behalf.

Will I have to pay for a Deferred Payment?

The Council charges an administration charge of £579.00 to cover the cost of setting up the loan. The fee covers land registry charges and other costs incurred. If you start an application for a deferred payment loan that is not completed you will be charged for any costs incurred at that point which could be anything up to the total amount. The administration fee can be added to the deferred payment loan.

When a deferred payment is ended an additional closure fee of £144.00 will be incurred which can also be added to the loan if required.

The Council will arrange an independent valuation (property appraisal) of your property to ensure you will have sufficient capital once your property is sold to repay the Council for any deferred payments. The Council will charge you for arranging an independent property appraisal.

Interest will be charged against the loan at the rate set by government. The Council will charge the maximum allowable interest rate as set nationally. The rate as from 01/01/2018 is 1.45%.

How do I apply for a Deferred Payment?

If you would like to apply for a deferred payment you need to contact the Council to arrange an Assessment. A Council representative will assess you to establish if you are eligible for a deferred payment and talk you through how it will work. If you choose to apply for a payment the following process will come into effect

  • You complete the form “DPA1 - Application for a deferred payment” and return it to the Councils’ finance team.
  • The council complete a land registry check and arrange a valuation of the property.
  • When the information is received the Council will calculate the equity limit then draw up the Deferred payment agreement and send a copy to all parties concerned, generally this is you, anyone with a beneficial interest in the property and / or your solicitors.
  • You agree, sign and return the DPA, it is recommended you seek legal advice at or before this stage.
  • The Council apply a legal charge against your property as security to pay the deferred amount back at a later date.
  • The Council makes payments to the care home on your behalf and records all payments made.
  • The council keeps you updated of the costs, interest and charges during the term of the DPA.

For more information on deferred payment loans and circumstances where property is disregarded, please see the full guidance document and application form here.

 

If you would like to find out more about how Deferred Payments work please contact us.