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A deferred payment agreement means that you should not have to sell your home in your lifetime to pay care home bills.

It's an arrangement with the council that will enable you to defer paying for the cost of your care home against the value of your home. This represents a loan against your property. If you're eligible, we can help to pay your care home bills. You can delay repaying us until you choose to sell your home, or until after your death.

Deferred payment agreements will suit some people's circumstances better than others. A deferred payment agreement is only one way to pay for care. To find out more about the options available, you can speak to a financial adviser or seek advice from an independent organisation.

Who is eligible for a deferred payment agreement?

You should be eligible for a deferred payment agreement if:

• you are receiving care in a care home (or you are going to move into one soon), and
• you own your own home (if your partner or others live there see below), and
• you have savings and investments of less than £23,250 (not including the value of your home or your pension pot)

There are circumstances where a deferred payment agreement cannot be considered, for example, it cannot be offered if your partner or a dependent lives in the property.

Can I apply for a deferred payment if I’m living in my home and paying for my own care?

A deferred payment agreement is designed for people who are most at risk of selling their home to pay care home fees. If you're living in your own home, a deferred payment agreement would not be offered, and there are other ways for you to pay for your care (including council support if you have less than £23,250 in savings and investments). You could speak to a financial adviser or an independent organisation to find out more.

Can I apply for a deferred payment if I already live in a care home?

If you have savings and investments of less than £23,250 and you do not have a partner or dependent living in your home, you should be eligible for a deferred payment agreement. If you have more than £23,250, we may still offer you a deferred payment agreement. Contact us directly to find out more.

When can I apply for a deferred payment agreement?

• at the point of entering the home or
• when you have been in the care home and your savings fall below the threshold or
• when your partner/dependant no longer lives in the home

When will I have to repay the deferred payment agreement?

You can sell your home and repay the deferred payment agreement at any point. Following your death, it will be paid from your estate.

How much can I defer?

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

How much will it cost me to set up a deferred payment agreement?

Every council is entitled to charge an administrative fee for setting up a deferred payment agreement. This fee is to cover the costs in setting up your deferred payment agreement, and not to make a profit. As of 2023, the initial setup fee is £500; this fee will be subject to annual review. Prices will be made publicly available.

The council may also charge for additional costs incurred during or at the end of the agreement; these include costs associated with the valuation of the property, costs of providing statements, removing or placing legal charges on the property and other costs associated with the deferred payment agreement.

What is the interest rate on a deferred payment agreement?

We can charge interest on the amount owed to us whilst we are helping you to pay your care home bills. The maximum interest rate that can be charged will be fixed by the government and will change on the 1st of January and 1st of July every year. Contact the local authority for information about the current rate of interest. You will also be notified of the interest rate when you start your deferred payment agreement.

How long does it take to set up a deferred payment agreement?

During the first twelve weeks you are in a care home, your home is not taken into account for the purposes of calculating what you might pay and a deferred payment agreement would usually start after that period. If you are eligible, we will be working with you to set up an agreement within twelve weeks of you moving into a care home.

Who will value my home?

The council will arrange to have your property valued and the cost of this will be included in the administration fee. If you disagree, you can request an independent valuation. We will only defer payment up to the value of 80% of the property.

Can the terms of my deferred payment agreement be changed at any time?

The maximum amount of costs that the council will pay on your behalf, along with the interest rate and any administrative fees, will be set out at the start of the deferred payment agreement. These will be reviewed regularly and can be changed.

Any other conditions - for example how the property should be maintained - will also be written down in your agreement. To make sure that you understand the full terms and conditions of the agreement, it might be helpful to seek independent advice from a solicitor, financial adviser or an independent organisation before signing a deferred payment agreement.

Can I get a deferred payment agreement if my house is in a flood risk area?

In order to be eligible for a deferred payment agreement your property will need to be insured. Please contact us if you have specific concerns about this.

What will happen to my home after my death?

The executor of your estate should arrange repayment of the money owed to the council, either by putting your home up for sale, or by arranging for another person, such as your executor, to pay. If the money owed is repaid without your home being sold, then your property will be dealt with according to any instructions you have left.

Who decides the price my home will be sold at after my death?

This will be decided by your executor. However, following your death, the council will liaise with your executor to reclaim the debt. Your executor will arrange the sale of your property and repayment of the money owed to the council.

How long will my executor have to repay the deferred payment agreement without incurring extra charges?

Your executor will have up to 90 days to repay the deferred payment agreement. However, if it is not paid within that time, interest charges will continue to be added until the debt has been paid in full.

What will happen if my executor doesn’t pay back the deferred payment agreement?

The council has the power to recover the debt through legal proceedings.

Can a family member apply for a deferred payment agreement if a person needing care has dementia or does not have the capacity to understand?

Carers and families can help people to make decisions about their care and how to pay for it. If we are concerned that the person applying for the deferred payment agreement does not have the capacity to understand, or will not have capacity to understand in the near future, then another person may need to represent them. Only a person who is properly authorised, for example a Deputy with a lasting power of attorney for property and affairs, can represent someone in applying for a deferred payment agreement.

How do I apply for a deferred payment agreement?

To apply for a deferred payment agreement, download the form.

Deferred payment scheme application form (PDF, 243 KB)

The completed application form should be sent to:

Financial Assessment Team, Barking Town Hall, Town Hall Square, 1 Clockhouse Ave, Barking IG11 7LU.

The team can also be contacted by telephone 020 8227 2390 or by email financial.assessments@lbbd.gov.uk