Paying for your care home: Deferred Payment Agreements

If you’re moving permanently into a care home you’ll need to have a financial assessment to decide if you can get help to pay your care home fees.

If you own your own home, the value of the property will be taken into account and you’ll usually have to pay the full care home fees yourself.

If you don’t want to sell your property straight away to pay the care home fees, and most of your capital is tied up in the value of your home, you could choose a deferred payment agreement (PDF 41KB).

A deferred payment agreement is lets you to use the value of your home to help pay care home costs in the form of a loan from the council. We’ll secure the loan with a legal charge on your property and you’ll need to repay the council later.

It is highly recommended that you speak to an independent financial advisor to discuss the financial options regarding your money and property. 

Can I get a deferred payment agreement?

You’re eligible for a deferred payment agreement if:

  • you have eligible care needs that will be met in a care home
  • you have savings and investments of less than £23,250 (not including the value of your home)
  • you own your own home (unless your partner, husband or wife or certain other people live there)
  • the value of your property is being taken into account in the financial assessment and you have asked the council to help you to pay the care home fees.

How it works

The amount you can defer will depend on the value of your home.

We will need to assess your finances to find out if you’re eligible for deferred payments.

If you have an assessment and you can get a deferred payment agreement, we will work out the value of your property. Alternatively, you may arrange an independent valuation, at your own expense.

We charge compound interest on the amount owed to us at 1.85%, and this rate may change in January and July of each year.

There is also a fee for setting up the arrangement. Our charge is £485, which includes the legal charge procedure, ongoing invoicing and terminating the agreement in due course.

Repaying the deferred payment

Under the deferred payment agreement, we’ll pay towards your care home bills on your behalf. The money you owe us for the care home bills will need to be repaid eventually. 

You’ll usually need to make payments towards the care fees direct to the care home from your income.  The amount you have to pay will be worked out in the financial assessment and depends on how much you receive from pensions and other income.

You may also choose to rent out your property and use the rental income towards the fees so that the amount you have to repay later is reduced.

How you repay the council depends upon the amount you owe. You don’t usually have to repay the loan during your lifetime. 

The loan can be repaid at any time if you choose to. 

You could sell your house, or you may be able to make other arrangements, for example, your family might choose to pay so that you don't need to sell the property or you may have funds from life insurance.

You should always consider discussing these options with an independent financial advisor.

How to apply

First you’ll need to have a social care needs assessment.This means a social worker will contact you to work out whether you have eligible care needs which can be met in a care home.

If you’re eligible, the social worker will refer you to our Financial Assessment Team and they will make contact with you to explain the deferred payment agreement scheme in more detail.  

Contact us

To get in touch with Access Point, our contact centre for Adult Social Care services.

If you have a general financial question, contact the Financial Assessment Team.

Call: 01273 295660.

Additional information

A deferred payment agreement is only one way to pay for care. To find out more about the options available, speak to an independent financial adviser 

Read further details about deferred payments agreements for paying for long-term care home charges (PDF 41KB).

Helpful external links

Paying for care