What are Deferred Payment Agreements (DPA)?

If you are moving in to a care home, it may become your home for the rest of your life. If you own a property that is classed as ‘capital’, the local authority will ask you to pay towards the cost of your care home.

This might mean you have to sell your property to pay for your care, but a Deferred Payment Agreements (DPA) lets you delay selling your home to pay for your care. In order to obtain a DPA, you must meet the following criteria:

• You must be assessed as needing a care home place,
• You must have capital at or below the £16,250 marker when your resources – excluding your home – are assessed,
• Your home would not normally be disregarded (for example as a result of eligible relatives living in the home), and
• You do not wish to sell your home, or you cannot sell it quickly enough to pay the fees.

There are some occasions when you could still be refused a DPA, for example if the value of your home is low. If you do not meet all of the criteria for a DPA, you can ask for one but the local authority does not have to give you one.

For a DPA, you would use your house as security, like a mortgage. You may need to sell it at a later date to pay the cost of the care, but your DPA can last until death. At this point, the local authority would recover the cost of your care from the sale of your house.

Deferred payments will be interest-free until you terminate the agreement or until 56 days after your death. The local authority would then charge interest, but this should be reasonable and not punitive, however, you should take this into account before making a decision about a DPA.