Deferred Payment Scheme: Frequently Asked Questions
What is a deferred payment scheme?The Deferred Payments Scheme is designed to help you if you have been assessed as having to pay the full cost of your residential care – but cannot afford to pay the full weekly charge because most of your savings or capital is tied up in your home.
Effectively the scheme offers you a loan from Camden Council using your home as security. It doesn’t work in exactly the same way as a conventional loan – Camden doesn’t give you a fixed sum of money when you join the scheme, but pays an agreed part of your weekly care and support costs for as long as is necessary.
You will pay a weekly contribution towards your care that you have been assessed as being able to pay from your income and other savings. The Council pays the part of your weekly charge that you can’t afford until the value of your home is realised.
The part Camden pays is your ‘Deferred Payment’.
A deferred payment is just one way to pay for care. To find out more about the options available to you, you can speak to an independent financial adviser or seek advice from a local independent organisation. For general information, call 020 7974 4000 (Option 1). Information on where independent financial advice can be accessed in Camden is available from Camden Care Choices.
Who is eligible for a deferred payment?
Deferred payments will suit some people’s circumstances better than others and not everyone will be eligible.
You may be eligible for a deferred payment if you:
• are receiving care in a care home (or are going to move into one soon) • own your own home which is included in your financial assessment (this
applies unless your partner or certain others live there)
• have savings and investments of less £23,250 (not including the value of your home)
If you would like more information please contact our Awards and Contributions Team on 0207 974 1607.
How do I apply for a deferred payment?
When you are being assessed for care in a residential home you will also be asked to complete a financial assessment. As part of this we will be able to identify if you could be eligible and will contact you to discuss this.
When will I have to repay the deferred payment?
You can sell your home and repay the deferred payment at any point. Alternatively, you can have a deferred payment for the full length of your stay in a care home and pay it back out of your estate, following your death.
How much can I defer?
The amount you can defer will depend on the value of your home.
As a guide, most people can 90% of the equity available in their home plus £14 250 as part of their agreement. The limit on equity is to protect you from not having enough money to pay the sale costs of the property (like solicitor’s fees) and to protect the Council against a drop in housing prices and the risk that we may not get all of the money back.
What if my husband/wife/civil partner lives in my house?
If you need care in a care home but your partner lives in your own home, the Council will not take the value of the home into account while they remain there.This means that you will not face having to sell your home to pay for care and will not need a deferred payment. You will still have to pay a contribution based on your income.
I pay for my own care and live in my own home. Can I apply for a deferred payment?
A deferred payment is designed for people who are most at risk of selling their home to pay care home fees. If you are still living in your own home, you should not need a deferred payment, 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 can speak to an independent financial or legal adviser or seek advice from a local independent organisation. You can find out about where you can access independent financial advice from Camden Care Choices. For general information about how deferred payments work, contact our Access & Response team on 020 7974 4000 (Option 1).
How much will it cost me to set up a deferred payment agreement?
There may be an administration fee for setting up a deferred payment from April 2016. This fee is to cover the costs we incur in setting up and administering your deferred payment agreement and not to make a profit.
What is the interest rate on a deferred payment agreement?
We can charge interest on the amount owed to us while we are helping to pay your care home bills on your behalf. The interest rate is currently 2.65% and will be reviewed every 6 months. Interest is charged to cover our costs and not to make a profit.
Will the Council make a profit out of a deferred payment agreement? No. We need to make sure that we can invest in the scheme so that people can benefit from it for many years to come.
The interest rate and administrative fee will cover our costs, and we won’t make a profit from them.
Who will live in my home if I have a deferred payment agreement?
This is up to you – though there are benefits to keeping your home occupied. Your home must be maintained and insured for as long as you have the deferred payment agreement, and this may be easier if someone is living there. You can choose to rent out your home and use the income to reduce the amount you asked the Council to defer.
Can I avoid selling my home if I get a deferred payment?
If you have a deferred payment, you should not have to sell your home in your lifetime unless you decide you want to.
The money owed to the Council from care home bills paid on your behalf during the deferred payment will need to repaid eventually. This can either be repaid by selling your home, or you can arrange another way to pay if you are able to.
Your deferred payment agreement will end automatically following your death, and your executor will have 90 days to arrange payment of the money owed. If someone else – like a friend or relative – chooses to pay the bill, then your home will not have to be sold.
How long will it take to set up a deferred payment agreement?
If you are eligible for a deferred payment agreement, we should be able to set it up within 12 weeks of you moving to a care home, and some may be arranged more quickly than this.
Who will value my home?
The Council will arrange to have your property valued and you can also request an independent valuation if you disagree with the valuation.
Can the terms of my deferred payment agreement be changed at any time? The maximum of costs that the Council will pay on your behalf, along with the interest rate and administrative fees, will be agreed at the start of the deferred payment agreement. The interest rate will be reviewed six monthly and
administration charges annually and could go up or down. Any other conditions – for example, how the property should be maintained – will also be included in your agreement.
To make sure that you understand the full terms and conditions you should get independent legal advice, before signing a deferred payment agreement. Further information and a list of organisations that can provide independent advice can be found via Camden Care Choices.
Who decides on the price my home will be sold after my death?
Your executor will arrange the sale and repayment of the money owed to the Council.
How long with my heir(s) have to pay back the deferred payment without incurring extra charges?
Your heirs will usually have 90 days to repay the deferred payment. Interest charges will continue to be added during this period.
What will happen if my heirs don’t pay back the deferred payment agreement within the 90-day period? Will they be charged extra?
If, after 90 days, they haven’t taken reasonable steps to repay the deferred payment, the Council will have the power to recover the amount owed through the courts. This could mean extra amounts become payable.
Are all heirs equally liable for the repayment of the deferred payment agreement?
Any money that is left after the money owed to the Council has been repaid from your estate will be divided up according to any instructions that you leave.
How is the money reclaimed?
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 a deferred payment does not have the capacity to understand the agreement, another person may need to take legal powers to manage their finances before they enter into an agreement.
Only a person that is properly authorised – like someone with a Lasting Power of Attorney or Deputyship Can enter into the agreement.
Where can I find out more about deferred payment agreements?
To find out more about deferred payment agreements in Camden, please contact our Awards and Contributions Team on 0207 974 1607 or email
