Paying for long term residential services

Most people who own a home will have an asset that is worth more than £23,250 and will therefore need to pay for the full cost of their care.

However, this means that some people cannot access their capital immediately as it is tied to the value of their home.

If the value of your capital assets (not including the value of your property) is below £23,250, then you may be able to use the value of your home to pay for the cost of your care at a later date. You can do this by entering a Deferred Payment Agreement with us.

Rather than having to sell your home immediately, you can sell your home at a later date or after death, and we'll cover the cost of your care until your home is sold. We'll then recover the valued owed from the profit of the sale.

We charge a small amount of interest to cover the administrative costs of setting up a Deferred Payment Agreement. This interest does not generate any profit for the council, and the rate of interest has been set by the government.

Currently, the interest charged on care costs paid through a Deferred Payment Agreement is 4.05%.

We'll send you regular statements detailing the outstanding charge of your account. You may wish to seek independent financial advice if you are considering a Deferred Payment Agreement.

Find out the different charges for a Deferred Payment Agreement

Signing the agreement

If you decide to use the Deferred Payments Scheme and we agree to your request you will enter into a legal agreement with us by signing an agreement document.

We will then place what is called a ‘legal charge’ on your property to safeguard the loan. You will be charged for this expense.

The agreement covers both our responsibilities and your responsibilities, one of which is to make sure that your home is insured and maintained. If you have expenses in maintaining your home while you are in residential or nursing care, these will be allowed for in the amount that you are assessed as contributing each week from your capital and income.

If you need a sample copy of the agreement and associated documents should you wish to discuss its implications with your solicitor. You are advised to seek independent financial and/or legal advice before arrangements are finalised.

Whilst in the agreement, you will also need to:

• have a responsible person willing and able to ensure that necessary maintenance is carried out on the property to retain its value, you are liable for any such expenses
• insure your property at your expense
• pay any client contribution in a timely and regular manner; if you fail to pay the client contribution on a regular basis the council reserves the right to add this debt to the loan amount

There can be no other beneficial interests on the property, for example outstanding mortgages or equity release schemes, unless this is approved by the local authority.

If you own the property jointly

The joint owner(s) will also be asked to sign the legal charge document. We insist that the joint owner(s) receive independent legal advice. We will require a certificate from the solicitor providing that advice that independent legal advice has been given by him or her to the joint owner(s).

What you'll need to provide for the agreement

You should ask your solicitor to provide you with the following documents relating to your property, either:

• the epitome of title (if your property is not registered with the Land Registry)
• official copy entries and title plan (if your property is registered)

We will also need the name and address of your solicitor.

If you do not instruct a solicitor you will also have to provide us with a completed Land Registry form ID1 to prove your identity. The form will have to be countersigned by a solicitor or approved person. A solicitor may charge you for this service.

After you have provided your details

Our Legal Services Unit will then prepare the Deferred Payment Agreement and a separate legal charge document. The documents will be sent to you or your solicitor for signature by you.

The legal charge on the property will be registered at the Land Registry. You will receive communication when this has been done.

Ending your agreement

You can end the agreement at any time (for example if you sell your home) and the loan then becomes payable immediately in full. Otherwise the agreement ends on your death and the loan becomes payable 90 days later.

We cannot cancel the agreement without your consent, however we may refuse to defer further charges, for example if there is a breach of agreement.