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Deferred payment agreements

A deferred payment agreement (DPA) is an arrangement with Norfolk County Council that enables you to use the value of your home to help pay care home costs.

If you're eligible for the scheme, we'll help to pay your care home bills on your behalf. You can delay repaying us until you choose to sell your home, or until after your death.

A DPA is only one way to pay for care and it will not suit everyone's circumstances. It's designed for people who are most at risk of selling their home to pay for care fees.

To find out more about the options available, you can speak to a financial adviser or seek advice from an independent organisation.  

Who is eligible for a DPA?

You should be eligible for a DPA if:

  • You're receiving or about to receive long-term care in a care home or supported living accommodation, including housing with care 
  • You own your own home (unless your partner or certain others live there)
  • You have savings and investments of less than £23,250, not including the value of your home or your pension pot 

If you need care in a care home but your partner lives in your home, we may exclude your home's value when assessing your finances to work out how much you'll have to pay towards your care costs. 

If you're already living in a care home you can still apply for a DPA. You may be eligible if you have savings and investments of less than £23,250 and the property is not being disregarded in the financial assessment because you have a partner or dependent living in your home.

Setting up a DPA

We offer a deferred payment scheme in Norfolk which allows us to charge interest on the amount owed to us. There's also an administration fee for setting the arrangement up.

We do not make a profit out of DPAs. We need to make sure that we can invest in the scheme so that people can benefit from it for many years to come, so the interest rate and administrative fee cover our costs.

We'll arrange to have your property valued. If you disagree with that valuation you can ask for an independent valuation. 

The amount you can defer will depend on the value of your home, which determines your ‘equity limit’.

The government recommends that we should use the value of your property and deduct 10% (for selling costs) and £14,250 (the lower capital limit) when working out the equity in your property.

The limit on equity is set so:

  • You're protected from not having enough money to pay sale costs of the property (like solicitor’s fees)
  • We're protected against a drop in housing prices and the risk that we may not get all of the money back

During the first 12 weeks you are in a care home, your home is ignored for the purposes of calculating what you might pay and a DPA would usually start after that period. 

We should be able to set up a DPA within 12 weeks of you moving to a care home, but some will be arranged more quickly than this and occasionally some may take longer.

We charge interest on the amount owed to us while we're helping to pay care home bills on someone’s behalf. The interest rate is currently 1.45% (until 31 December 2019) and is set nationally. It's reviewed every six months.

The maximum amount of costs that we will pay on your behalf, along with the interest rate and any administrative fees, will be set out at the start of the agreement. These will be reviewed regularly and can be changed.

Any other conditions, such as how the property should be maintained, will also be written down in the agreement.

Your home must be maintained and insured for as long as the DPA exists. You could choose to rent your house out and if you do this you should use the income to reduce the amount you are asking us to defer. 

Setting up a DPA for someone else

Carers and families can help people to make decisions about their care and how to pay for it. 

If we're concerned that the person applying for the DPA does not have the capacity to understand, or will not have capacity to understand in the near future, then another person may need to represent them. 

Only a person who is properly authorised, like someone with legal power of attorney, can represent someone in applying for a DPA.

Read more about making decisions for someone else

Repaying your DPA

The money owed to us from care home bills paid on your behalf during the DPA will need to be repaid eventually. This is normally done by selling your house, but there are other ways to repay.

For example, someone else could pay the money owed, or your family could use any pay-out from life assurance after your death.

A DPA ends automatically following your death. The executor of your estate should arrange repayment of the money owed to us, either by putting the home up for sale, or by arranging for another person, such as your heir, to pay. This usually needs to be done within 90 days. 

If the money you owe is repaid without the home being sold, then the property can be dealt with according to any instructions you have left.

A DPA means you should not have to sell your home in your lifetime unless you decide you want to. Your home and your money still belong to you if you have a DPA, so you can make gifts to your children.

However, if we believe that your home or money has been given away deliberately to avoid paying care charges, then we have the power to recover any money that we are owed.

Further information

See our DPA information sheet

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