abdcare blog

WHEN IN A CARE HOME IS IT POSSIBLE TO DEFER PAYING FOR YOUR ELDERLY CARE HOME FEES?

06.08.2019

We asked Andrew Douglas, Partner at Awdry Bailey & Douglas Solicitors who specialises in elderly care, for his views on this issue?

Surely you cannot defer payment of fees when in a care home?      It is a fact that if after a financial assessment by the local authority a person is shown to be unable to pay all their care home fees from their income and capital savings (which must fall under the upper capital limit of £23,250) other than through the sale of their home a local authority must offer them a deferred payments arrangement. This takes the form of a mortgage.

Is there an authority for what you say? Yes, sections 34-36 of the Care act 2014 and The Care and Support (Deferred Payment) Regulations 2014. This is a must requirement by a local authority provided they can obtain a first registered charge against a person’s title to their property or another form of adequate security. If adequate security cannot be provided then in those circumstances a local authority cannot enter into a deferred payments agreement.

What can be deferred? The amount agreed for care costs plus the local authority’s administration charges and interest.

How much can be deferred? There is an upper limit which can be deferred and which is 90% of the equity value of the property. From this value there is deducted the lower capital limit which every person is allowed to keep namely £14,250. When the deferred payments reach 50% of the net equity figure the local authority should revalue.

Is interest charged? Yes at the prevailing market gilt rate plus 0.15%. Interest is charged on a compounded daily rate basis meaning that interest is rendered on the loan outstanding and accumulated interest.

When is the loan repayable? It is repayable on the sale or disposal of the property or 90 days after the date of death of the person concerned. Additionally the person concerned can terminate the arrangement at any time.

To know more and for a free appointment to find out answers to the questions that need answering email Andrew Douglas or his team on ajd@awdrys.co.uk or call us on 0800 072 8636.

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