Paying for Care and Support
Deferred Payment Scheme
What is the deferred payment scheme?
If you are moving into a residential or nursing care home, you are required to pay the care fee contribution for the residential care/nursing home. You can apply to the local authority to help you until you can:
- Access/release funds tied up in your property
- Access capital assets e.g. monies held in trusts, shares etc.
- Access certain capital assets you may not be able to access at this time
You may be eligible if you own a property or capital assets but choose not to use the capital to meet the cost of your care. Any money, which the local authority pays out in these circumstances, is repayable.
This means that the council will pay for your residential care costs and if you own a property, arrangements will be made to secure the loan against your property, until sold or until you pass away.
At this point, the loan (Land Registry terminology when referring to Deferred Payment Charges or Section 71 charges) will be repaid to the council. This will all be outlined in an agreement with Pembrokeshire County Council, which will need to be signed by you or your financial representative.
Interest will be charged at the rate set in the social services charges list, available on our website or on request. Interest will be payable from the date the deferred payment agreement is signed.
Who is eligible for the scheme?
To join the scheme you must satisfy all the following conditions: (NB: this list is not exhaustive.)
- Have been assessed by the Adult Social Care as requiring permanent residential or nursing care
- Be eligible for funding from the Council
- Have a beneficial interest in a capital asset which covers the assessed charge
- Must be the first charge in the assessed property
- The property is digitally registered by the Land Registry
Those who lack capacity would need to have in place:
- A power of attorney - who is able to act on their behalf in relation to financial matters
- A deputy - who is able to act on their behalf in relation to financial matters
How does the scheme work?
If you own an assessable property
If you have been assessed and will be receiving chargeable care and support, you will be offered a financial assessment to determine how much you will pay towards your care.
The value of an eligible property will be disregarded in the financial assessment calculation for the first 12 weeks of the care home placement. You will need to make an assessed contribution during the 12 week period.
From the 13th week your property will be included in the financial assessment and the amount you are required to pay per week may be higher than your income. You will have the opportunity to defer the capital and premium portion of the contribution of the payment until a later date.
A deferred payment arrangement can also be used to pay ‘Additional Cost Contributions’. Additional Cost Contribution is a payment made to a residential or nursing home on your behalf, normally by a friend or relative. Where we are contributing to the cost of your care, we only pay up to a certain amount, but some care homes charge more than this.
If you own other assessable capital assets (excluding an assessable property)
If you have other investments which you are unable/or prefer not to access, you can enter into a deferred payment agreement. You could also use the scheme to pay ‘Additional Cost- Contribution’.
Will there be any fees for this scheme?
Pembrokeshire County Council charge a one off administration fee/legal fee for setting up a deferred payment arrangement. This include the legal costs and land registry fees that the local authority have to pay when setting up an agreement. The fee can be paid when taking out the arrangement, or if there are insufficient funds to pay the fee, then this can also be deferred.
If you have to pay an Additional Cost Contribution, the money must be repaid:
- Where there are certain changes in your financial circumstances
- When the property has been sold
- When the agreement is terminated by party e.g. the Council, you or your representative
Interest will also be charged if you are deferring an Additional Cost Contribution. Interest will be payable from the date the deferred payment agreement is signed.
How do I apply for the Deferred Payment Scheme?
When you move into a residential or nursing home permanently following a social care assessment, a financial assessment form will need to be completed as part of the admission process.
When this form has been processed, you or your representative will be provided with confirmation of the cost of the residential or nursing placement. 14 days after you received the financial assessment confirmation letter, you will receive Deferred Payment form and Legal documents which need to be completed and sent back to us.
Your application will be considered in line with legislated criteria and if you are successful, a deferred payment agreement will be sent to you or your representative.
Successful Application
When you receive your deferred payment agreement, you are advised to seek independent legal/financial advice before signing it.
The completed agreement should be returned to the Council and you will receive a letter confirming when your agreement is in place.
If your application is not successful then you or your representative will be notified of the reasons for the decision in writing.
For any queries about your application please call Social Care Finance on 01437 775600.
Property Valuation
The Council will arrange for a valuation of your property and when this has been done, we will send you a letter setting out the terms of the agreement. The letter will show your assessed weekly payments.
What if I do not want a Deferred Payment?
Assessable Property
If you have been offered a Deferred Payment Agreement and do not wish to proceed and you cannot pay the care home fees, Section 71 of the Social Services & Wellbeing Act 2014 will be applied.
The Council will arrange for a Legal Charge to be placed against the property, this will secure the debt due to the Council until the property is sold. If the debt is still outstanding after your death, interest charges will apply from the 56th day after your death.
Things to know
The charge on the property will not be removed until the debt is paid.
The Executor is liable to pay the accumulated deferred payment debt on the property before the Will or Probate is actioned.
6 months after the date of death of the service user, if the deferred payment is not paid or no information has been provided to explain this delay, Pembrokeshire County Council is legally allowed to issue a Sale Order to enforce the sale of the property to recuperate the debt.
If there is already a first charge on the property:
- The service user or their representative need to provide the level of the charges already agreed e.g. equity release statement, life insurance statement, mortgage statement, etc..
If there is a Deferred Payment Scheme signed:
- The DPA charge and the interest charges will cease following the completion date of the property sale or at the date of death
- Legal fees will apply
- An invoice will be raised which should be paid promptly
If there is no Deferred Payment Scheme signed:
- A Section 71 charge is applied to the property and the calculation interest charges will start accruing 56 days after date of death and will cease when the debt is settled
- Administration fees will apply
- If the property is sold while the owner is still in residential care/nursing home an invoice will be raised from the date of completion which should be paid promptly
How can I find out more about the scheme?
Social Services Financial Deferred Payment & Debt Team
Pembrokeshire County Council, Haverfordwest, SA61 1TP
Tel: 01437 775600