Deferred payments for people in permanent residential care

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1 Money and legal matters Deferred payments for people in permanent residential care Deferred payment agreements scheme - Information for residents

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3 Deferred payment agreements scheme Contents Introduction 4 What is a deferred payment agreement? 4 Who is eligible? 5 Applying for a deferred payment agreement? 5 How much can be deferred? 6 Costs associated with a deferred payment agreement 7 Terminating a deferred payments agreement 8 Advocacy 9 Further information 9 Helping us to help you 9 Useful contacts 10 For Independent advice 10 3

4 Introduction If you need to move permanently into a residential care home or a nursing home, the value of your home may be taken into account by the council when working out how much you should pay to meet the costs of the care home. For the first 12 weeks of your stay, we will ignore the value of your home. This is known as the 12 week property disregard period. This will give you time to think about how you wish to pay for your care costs. Sometimes the value of a service user s home will not be taken into account, for example where a partner continues to live there. We will advise you of the situations where your property is not included. If after the first 12 weeks we do take the value of your home into account, and you do not have sufficient income or savings to meet the full cost of your care fees, including any rental income you may be able to receive from letting your property, you may have to sell your home in order to pay you care costs or consider other ways to fund the balance of your care home fees. The council s Guide to Residential Care Costs gives some of the options that you may wish to consider. If you do not wish to sell your property, now or in the future, or if you are in need of short term financial support to help pay for your care fees, then a deferred payment agreement could help you meet your care costs. You should take independent financial and legal advice to help you consider all your options, and decide what course of action will be financially better for you. What is a deferred payment agreement? A Deferred Payment Agreement is a legal arrangement with the council that will enable some people to delay using the value of their homes to fund residential and nursing home care costs. If you are eligible, the council will agree to pay the outstanding balance of your residential care home bills on your behalf. You can delay repaying the council until you choose to sell your home, or until after your death. 4

5 Deferred payment agreements scheme Who is eligible? To be eligible for the scheme you must: l have savings/capital (excluding the property) of less than 23,250 l have been assessed by the council as needing permanent residential or nursing care in a registered care home l own or have part legal ownership of a property, which is not benefitting from a property disregard, and ensure your property is registered with the Land Registry (if the property is not, you must arrange for it to be registered at your own expense) l have mental capacity to agree to a deferred payment agreement or have a legally appointed agent willing to agree this l there can be no other beneficial interests on the property, for example, outstanding mortgages or equity release schemes, unless this is approved by thecouncil For the duration of the agreement you will also need to: l have a responsible person willing and able to ensure that necessary maintenance is carried out on the property to retain its value, or engage an agent to undertake these checks. You are liable for any such expenses l insure your property for the entire period at your own expense Applying for a deferred payment agreement To take advantage of the scheme you must enter into a legal agreement with the council. The details of the agreement will be put in writing and signed by yourself and the council s legal contractors and you will be given a copy. You will also be required to sign a legal charge on your property in favour of the council as security for the deferred contributions when your property is sold in the future. 5

6 The council can at its discretion accept other forms of security such as a solicitor s undertaking letter or an agreement to repay the amount deferred through the proceeds of a life assurance policy. If you decide to apply for a deferred payment agreement, you will be required to provide the following information and documentation: l Official copy entries and the title plan of your property l An up to date estate agent valuation of your home l The name and address of your solicitor (if you have one) If you own the property jointly, the joint owner(s) will also be asked to sign the legal charge document. It is strongly advised that the joint owner(s) take legal advice on this before you enter into a deferred payment agreement with the council. How much can be deferred? In principle we can allow you to defer your total care costs, including any top up you may have agreed for the care home of your choice, less the weekly contribution that you will be expected to pay from your regular weekly income. You will need to complete a financial assessment form before a deferred payment agreement will be considered. The council will then calculate how much you need to contribute each week, and how much the weekly deferred payment would be. There is however a maximum amount that you can defer and this will be calculated based upon the amount of equity available within the property or other form of security you have offered. We will also consider the likely duration of the agreement and whether it is a short term arrangement to help whilst your property remains unsold or whether you wish to keep your home longer term. 6

7 Deferred payment agreements scheme Costs associated with a deferred payment agreement The council will charge you a set up fee to cover our administration costs in setting up the agreement. There will also be one-off costs during the course of the agreement and when the agreement is terminated. The council s guide prices for administration charges are set out below. Please note these are guide prices only and the current prices operating at any point are available on request from the council. If your property is to remain empty for any period, you will need to look into issues of security, insurance and maintenance. The council will require you under the terms of the Item Internal Fees Production and set up cost for the Deferred Payment Agreement - One-off cost Monitoring and statement production - Annual cost Equity Limit Recalculation - Annual cost Agreement Termination - One-off cost External Fees Agreement Termination - One-off cost 6.00 Property Valuation/Re-valuation Charge (note, Service User can supply) *Legal Services/DPA/Registering a charge against the title of a property *Legal Services/Removing a charge against the title of a property *Indicative costs from the Council s legal contractor. Costs may vary depending on the amount of work involved in each case 7

8 agreement to insure and maintain your property and will allow you to keep some of your weekly income to ensure you are able to do this. The deferred payment will also have interest charged on it in the same way you would be charged interest if you borrowed money from a bank. The maximum interest rate that can be charged is fixed by the government and will change on the 1st January and 1st July each year. This interest will be compounded on a daily basis and will apply from the day you enter into the agreement until the day the total amount owed is repaid to the council. The current rate of interest is available on request. You will receive statements every 3 to 6 months advising you how much of your care costs have been deferred to date and details of any interest and administration charges applied to your deferred payment account during the period. Terminating a deferred payments agreement A deferred payment agreement can be terminated at anytime by notifying us in writing. If you terminate the deferred payment agreement or if the property is sold then the loan becomes payable immediately and you will be expected to pay the total deferred amount including any interest and administration charges due. Otherwise the agreement ends on your death and the deferred charge becomes payable 90 days later from your estate. If after 90 days the amount due remains unpaid, the council may seek redress through the County Court to recover the debt. Should this happen, it is likely the interest rate charged on the debt will increase, and further costs may become payable. In all cases where the agreement is terminated, Interest will continue to accrue until the amount due to the council is repaid in full. 8

9 Deferred payment agreements scheme The council can also terminate the agreement if in its view you are not complying with the terms of the agreement or where the amount deferred under the agreement reaches the equity limit set out within it. We would write to you in these circumstances giving notice. Advocacy If there is no one suitable to support you and you have substantial difficulty being involved in decisions about your care and support, we will arrange an independent advocate. An advocate helps make sure you re involved in decisions by helping you understand your rights, express your views, and can help make decisions about your care and support. Further information If you require further information please contact the Debt Recovery Team whose contact telephone number is at the end of this leaflet. If the council decides not to proceed with offering you a deferred payment agreement you will be told the reason why and advised how to complain if you remain unhappy with the decision. If the council agrees to your request to enter into a deferred payment agreement, you are advised to seek independent financial and/or legal advice before arrangements are finalised. Helping us to help you We welcome feedback about our services from the people who use them. If you have any comments, complaints or compliments about the advice or services you have received from the Education & Social Services Department, or if you would like to see a copy of any records Wandsworth council keeps about you, please contact the Complaints Officer on Tel:

10 Useful contacts To talk to someone about the deferred payment scheme Debt Recovery Team Wandsworth Council Town Hall Extension 3rd Floor Wandsworth High Street London SW18 2PU Tel: Monday to Friday 9am to 5pm For all financial assessment related enquiries: Financial Assessment Team Wandsworth Council P O Box London SW18 9JS Tel: Fax: Monday to Friday 9am to 5pm FinanceAT@wandsworth.gov.uk For independent advice: The Money Advice Service The Money Advice Service is a free, independent advice service which was set up by the government. It provides advice about care, including planning ahead and funding and paying for care. Telephone: Society of Later Life Advisers (SOLLA) SOLLA is a not-for-profit organisation that aims to help people seeking advice in later life. Advisers that are full members of SOLLA must be fully accredited financial advisers and adhere to a code of practice. Telephone: Financial Conduct Authority (FCA) Advisers that provide regulated independent advice must be registered with the FCA and be on the financial services register. Search the register on the FCA website to find an adviser. Telephone: or

11 Deferred payment agreements scheme Age UK Age UK is a national charity that provides independent information and advice. Telephone: Age UK Wandsworth Age UK Wandsworth is an independent local charity which offers advice, information and services for people aged 60 and over. 549 Old York Road, Wandsworth, London, SW18 1TQ Telephone: Disability and Social Care Advice Service (DASCAS) DASCAS provides independent advice to residents of Wandsworth. 1st Floor, 64 Altenburg Gardens, London, SW11 1JL Telephone: FirstStop Advice An independent advice and information service from the Elderly Accommodation Counsel. Telephone: Independent Age Independent Age is a national charity helping older people maintain their independence, by providing advice, information and support. Telephone: Relatives and Residents Association helpline Independent advice for families of people considering moving to a care home. Telephone:

12 Further information If you have any questions about this fact sheet or if you need it in a different format (for example, large print) please phone (020) , accessteam@wandsworth.gov.uk or minicom (020) For information about local services visit our website Designed and produced by the Graphic Design Unit, Wandsworth Council AS.394 (8.15)