A deferred payment agreement is an arrangement with the council that will enable people to use the value of their homes to help pay care home costs, rather than having to sell their home. If you are eligible, we will 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.
Advice and information regarding long term care fees if you enter care and own property.
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The value of your property may be considered capital and factored into your care charges, starting twelve weeks after your permanent move. This may not align with the date Cheshire East Council agreed to fund your long-term residential or nursing care.
The value of your normal home may be ignored if it is occupied by your spouse, a relative who is aged over 60 or incapacitated or a child under 16 for whom you are responsible.
There are other circumstances where the value of your property may be disregarded and a Financial Coordinator will be available to discuss options and details once you have been assessed by a social care worker.
If you have a share in the value of a property, the value of your share will be counted as belonging to you if the property is sold. Your spouse will be able to use your share of the proceeds to purchase another property. This property should remain in joint names and you should therefore retain your property interest.
But, if there is any capital above your 50% share left over after the purchase, this will be considered as belonging to you and will be taken into account when calculating your charges. These matters are complicated and can vary depending upon circumstances. We would strongly recommend you contact your Financial Coordinator for guidance.
There are 2 ways in which you can pay the standard charge of your care:
- Pay the residential or nursing home’s standard charge direct to them from your income and capital, as a private resident. Or
- Enter into a deferred payment agreement with Cheshire East Council if you cannot access your assets which are tied to the property.
Cheshire East Council will pay the care home directly and will defer part of the charge against the value of the property (traditional type)
The customer pays the care provider for their care and the Cheshire East Council loans them the cost of care in instalments less any contributions (loan type)
If you're unable to pay the full charge until your property is sold, you can defer part of the charge against the value of your property.
You’ll need to sign a legal agreement with Cheshire East Council, and a legal charge will be placed on your property to recover the deferred amount when it’s sold. The Council will charge an initial set-up fee of £850, plus an annual administration fee of £100. Interest will also apply to the debt.
This means you'll continue to pay according to your weekly income and capital, and only pay the remaining balance (the deferred amount) once your property is sold. You’ll receive regular updates on the outstanding deferred balance.
Under the Care Act 2014, interest is charged on deferred payment agreements from the start, at a rate set by the Government. This rate is reviewed twice a year, and you will be regularly updated on any changes to the charges and interest rate.If there is a delay in repaying a deferred debt to the Council, a higher interest rate will apply.
Currently, the Council charges 5% above the base rate, capped at 8%, for any deferred debt that is due for repayment.
If you sell or give away something valuable, like a house, money, or shares, to reduce your care charges, or if someone moves into your home when you need care to try to keep the property from being counted, the Council may still treat you as owning that asset and charge you accordingly. They look at each case individually, and there's no time limit for when they can decide that you got rid of the asset to avoid paying care fees.
Or see a solicitor for independent advice.
Contact us to find out more about who is eligible for a deferred payment agreement, how to apply, and further information on how the scheme operates.