You can use the value of property you own to help with your care costs. This is called a deferred payment agreement. It is a way to help you pay for care without having to sell your home during your lifetime.
How deferred payment agreements work
A deferred payment agreement works like this:
- Wirral Council pays part of your care costs now and recovers the money later, using your home as security
- you pay a weekly amount based on what you can afford from your income and savings
- the rest of the cost is deferred and becomes a debt against your property
- You can keep up to £144 per week as disposable income if you choose. This means the amount you defer will be higher.
The debt is usually paid when your home is sold. You can end the agreement at any time, for example if you sell your home. If not, the agreement ends when you die and the debt is paid within 90 days.
Why use a deferred payment agreement?
A deferred payment agreement gives you time and flexibility to decide if and when to sell your home. It means you will not be forced to sell your home during your lifetime to pay for care.
Costs for a deferred payment agreement
There are fees for setting up and managing the agreement:
| Set-up fee (admin) | £350 |
| Set-up fee (legal) | £450 |
| Changes to the agreement | £100 per change |
| Repayment of the agreement | £200 |
Interest is charged on the amount deferred. The rate is based on government borrowing costs plus 0.15%. It changes twice a year, on 1 January and 1 July. You will get regular statements showing what you owe.
Other costs may include Land Registry fees and property valuation.
If you have costs for maintaining your home while in care, these will be considered in your financial assessment.
Who can apply for a deferred payment agreement?
You must:
- have less than £23,250 in savings (not including your property)
- be assessed as needing permanent residential or nursing care in a registered care home
- own or part-own a property that is registered with the Land Registry and is not subject to a property disregard
- have mental capacity to agree to the arrangement or have a legally appointed representative who can agree for you
If your property is not registered with the Land Registry, you must arrange this at your own cost. Your financial assessor can advise you.
While in the agreement, you must:
- have someone responsible for maintaining your property and pay any costs
- keep your property insured
- pay your agreed weekly contribution. If you do not pay, the council may add this debt to the loan
- make sure there are no other interests on the property, such as mortgages or equity release, unless approved by the council
The council must be able to secure the debt against your property before the agreement starts. Until the agreement is complete, you are responsible for any care costs and may be subject to normal debt recovery processes.
Legal agreement
You will sign a legal agreement with Wirral Council. We will place a legal charge on your property to secure the debt. We cannot cancel the agreement without your consent.