Property and Deferring Care Fees - A General Guide
Moving into a care home is a big step and it can have major
financial implications. Adult Social Care may be able to help you
with your care home fees but the Government expects that
everyone should pay what they can afford. National regulations
set out how these charges are calculated. If you own more
capital than the minimum limit set by the Government, you will
be expected to meet the full costs of your care. If your capital
would be less than the limit without your property, this scheme
allows you to postpone the sale of your home by agreement
with the Council.
If you have a home to sell that is included in a financial
assessment, but you do not want to sell it immediately, you can
defer all or part of your fees by making a Deferred Payment
Agreement with the Borough Council. The Council will then
fund your care fees for the time being free of interest, then
recover the money when your property is sold in due course.
You will still be expected to make a client contribution from
What property can be used to defer payments?
You need not be the legal owner of the property to use all
or part of it to defer payment. You may, for example, have a
“beneficial interest” in the property. This means that you own
a share of its value even though you are not registered on the
deeds as the owner, but you must have lived in the property
as your main home before going into residential care. You may
only defer the sale of a property which is your main home.
What property can not be used to defer payments?
Some property must not be taken into account in financial
assessments. It will be disregarded if it is occupied by:
-Your partner (husband, wife or someone who has lived
with you as though you were married)
-A relative who is aged 60 or over, or a younger relative
who is “incapacitated”. Relative includes parent, parent
in-law, step-parent, stepson, stepdaughter (or the spouse
of those previously mentioned), grandchild, grandparent,
uncle, aunt, nephew, or niece. The term incapacitated is
not defined but should apply to someone receiving an
incapacity benefit or disability benefit or who would fulfil
the medical conditions to receive one of these benefits
-A child under 16 years whom you are liable to maintain
(this assessment is made by the local authority)
-A lone parent who is the claimant’s estranged or divorced
The Council may also use its discretion in certain other
cases not covered by the terms “partner” or “relative” above,
where there is an overriding
care issue. Property must
not be taken into account for
the first twelve weeks after
you have been admitted to
permanent residential care.
Must I decide whether to defer payments before
I am admitted to care?
Your main home will be disregarded in any financial
assessment for the first twelve weeks after you enter into
residential care, if you have total assets of less than the
capital limit. This allows some time for you to consider your
options on whether to sell the property or to enter into a
deferred payments agreement.
When must the property be sold?
The property does not need to be sold until the charge
becomes due for repayment. This is either 56 days after
death of the resident or at such earlier date notified by you,
for example where you wish to sell the property but for
some reason cannot do so immediately. Even after the date,
the sale of the property can be postponed under certain
conditions, but interest becomes payable from that date.
Can I be forced to sell my home?
Someone living in a care home cannot be forced to sell a
property without a court order. The deferred payments
scheme enables you and the Council to make an agreement
to avoid having to sell your property before you are ready,
and without resort to the courts.
What if I want to sell my home?
If you do not want to defer payments but prefer to sell your
home immediately the Council cannot insist on you entering
into a deferred agreement and must give you a reasonable
period of time to arrange the sale. In such a case placing a
legal charge might not be appropriate or relevant. We will ask
you to complete a loan agreement.
Will the scheme cost me more money?
The local authority cannot charge interest on any deferred
payments under this scheme for the period of the agreement,
which can extend up to 56 days after the death of the resident.
If the property remains unsold after this date interest is then
chargeable. The Council will however charge you for the costs
of Land Registry searches and legal costs in setting up the
Can I sell the property without refunding the Council’s
The Council will place a legal charge over the property
when the agreement is made. This will need to be cleared by
payment of the deferred fees before you can receive the net
balance of the proceeds from the sale.
Can I make top up payments and defer some charges?
A deferred payment agreement can include top up payments
to enable a resident to live in more expensive accommodation
than the authority would normally pay for.
The deferred payment facility was introduced by sections 53 and
55 of the Health and Social Care Act 2001 and came into effect in
England on 1st October 2001.
You are advised to seek independent financial advice if you
wish to enter into a deferred payment agreement. This will be
important if you plan not to sell your property as you may need
to take a number of considerations into account, such as the
state of the local property market; whether it might be best to
sell the property and invest the money to your best advantage;
insurance and safety of the property if its empty; the pros and
cons of renting; the effects on your benefits. If you rent out your
property the income will be used to contribute towards your
residential care costs but will reduce the amount of the loan.
If you would like further information about deferring charges for
residential care please contact the local finance officer on 01793 465 560.