Deferred payment schemes

A deferred payments scheme (DPS) is designed to help people who have been assessed as having to pay their own residential care but are unable to pay because their capital is tied up in property or land and have savings less than £23,250.

DPS is a legal arrangement with the council whereby a ‘legal charge’ is placed on your property to protect its interests.

Depending on whether you are successful in your application you are offered a loan using your home as security. It doesn’t work in exactly the same way as a conventional loan – the council doesn’t give you a fixed sum of money when you join the scheme, but pays an agreed part of your weekly bill for as long as is necessary. You pay a part of your weekly charge that you are assessed as being able to afford from your income and capital, and the council pays that part of your weekly charge that you can’t afford until the value of your home is realised. The part that the council pays is your ‘deferred payment’.

The deferred payments build up as a debt which is cleared when the money tied up in your home is released. For many people this will be done by selling their home, either immediately or later on. However, you do not have to sell your home if you don’t want to – you may, for example, decide to rent it out to generate income. If you do this you can, if you wish, use the rental income to increase the amount that you pay each week, thus reducing the weekly payments made by the county council, and minimising the eventual deferred payments debt.

A DPS can only be considered upon certain criteria being met and the council has some discretion to decide when they will offer the DPS. All applications will be considered on their individual merits and you will have to sign a contract with us agreeing to the loan conditions. However, it is important to note that you should always seek independent financial or legal advice if you wish to enter a DPS.

If you are accepted into a DPS, you will receive the agreement in writing. During the time of the DPS agreement, the council will be able to charge interest on deferred payments to cover its costs. They cannot charge more than the national maximum interest rate, which changes every six months.

Independent financial advice

If you are in a position where your savings and investment (capital) are over the threshold of £23,250 we would advise that you get some independent financial advice. This will help you make the best decision about how to meet the financial commitments to cover your care needs now and in the future.

Independent advisers can help you to make the most of the assets you have (cash or other) through appropriate planning to cover any long term care costs. One advantage of seeking independent financial advice is that they will have specialist knowledge and will be able to assess your specific circumstances and make sure you are claiming all the benefits and allowances you are entitled to.

Some of the advice will be offered free of charge, but some of the services will have a fee; please make sure you enquire about this when you first contact your chosen adviser.

You can find a reputable and verified financial adviser local to you through The Society of Later Life Advisers (SOLLA).

Request an assessment from adult social services

If you or the person you care for has care and support needs and you would like to request help from the council, please contact adult social services for an assessment.

How to request an assessment