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Loan-Type Deferred Payment Agreements - Carers UK Forum

Loan-Type Deferred Payment Agreements

All about money
Taken from AgeUK's Factsheet 38 "Property & Paying for Residential Care":

9.15 A ‘ loan type deferred payment agreement

Loan type DPAs are different to the ‘traditional type where the authority arranges your care and defers the charges due to it. Under a loan type agreement, you arrange your own care, with the authority loaning you an amount towards your fees in instalments The agreement must make clear
the authority will make advances of the loan to the adult in instalments
the purpose of the loan is to pay for care home costs or supported living accommodation. This should explain the consequences of any failure by you to pay care costs, and the adult must inform the local authority if he or she no longer receives or intends to receive care in such accommodation.


Just come across the above and it looks like it may be a possible solution to our funding issues. Has anyone taken out one of these? Any disadvantages?

Any comments would be very welcome! Thanks.
In essence ... akin to a mortgage on a property ... only difference ?

It escalates as opposed to decreasing ... in that respect , saving a monthly sum to produce an undetermined lump sum in the future.

The Government on their introduction ( 2015 ) and purpose :

https://www.local.gov.uk/our-support/ou ... ruary-2018

What is this change all about ?

Universal deferred payment agreements (DPAs) were introduced by the then Government in 2015 as part of its commitment to ensuring that “people should not be forced to sell their home in their lifetime to pay care home bills.” The current Government remains committed to this policy. Regulation 2(1) of the DPA Regulations sets out the circumstances under which local authorities must enter into a DPA with an individual (the criteria for a mandatory DPA). Under the original legislation, this included a requirement that local authorities were meeting or going to meet that individual’s needs or believed they would meet their needs if asked.

Because local authorities are not required to provide or arrange care home accommodation for persons with over £23,250 of assets (self-funders) under section 18 of the Care Act, this meant that local authorities generally only had to offer a DPA if they were meeting or going to meet such an adult’s needs under section 19 of the Care Act or considered they would do so if asked.

This was not the intended effect of the legislation and did not protect self-funders from having to sell their home in their life time to pay for their care.

The changes to the legislation we have made means that local authorities will have to enter into a DPA with a self-funder if the LA would be required to meet their needs but for the fact that they have assets over the upper capital limit and they meet the other criteria for a mandatory DPA. Local authorities will not, however, be required to meet the needs of a self-funder.


Clear as ... mud ?

( I haven't delved into the mechanics ... fixed or fluctuating sums involved ? ... interest rates a factor ? ... partial balloon payments permitted ? ... level of care ? ...
charge on property / restrictions against further ones ? )


I would recommend to anyone wanting to explore this route further to take expert advice ... AGE UK seem to be better placed than most.

With every prospect of that Green Paper NOT being bought to the forefront in pending Government legislation ... latest is a proposed Cross Party Committee to " Discuss "
the way forward ( In essence ... " Sorry ... we haven't a clue ... have you got one ? " ) ... this scheme , along with a couple of others , will be on the table for a while.

https://www.carersuk.org/forum/support- ... read-32659


Feelin' lucky , punk ?

To go down this route BEFORE that Green Paper ?

Even bet ?

( Needless to ask ( ? ) ... CHC / NHS Continuing Healthcare ... even NHS Nursing Funded Care ... factors here ? )
I suspect an LA would try and get someone to do this to top up fees, rather than the LA paying the full amount, which they should, because they have an unlawful "ceiling" of fees!

Never do this unless first checking that the person concerned is not entitled to free continuing healthcare.#
Making sure the property isn't exempt because someone is living there who is over 60, disabled, or a close relative
Making sure the person is receiving all the benefits they are entitled to. Self funders ARE STILL ELIGIBLE FOR DLA OR AA!
Making sure the person is claiming Funded Nursing Care if possible.
I suspect an LA would try and get someone to do this to top up fees, rather than the LA paying the full amount, which they should, because they have an unlawful "ceiling" of fees!


On that particular aspect , a LEGAL OPINION ...

https://www.mckenzielaw.co.uk/wills-pro ... arty-fees/

Care Funding and Third Party Top Up Fees – Should You Pay One ?


A snippet :


It can be a real ordeal to try and navigate our complicated health and social care system and we can help if you think you are paying, or are being asked to pay an unlawful third party top up fee.

We know that top-up fees cause difficulties for many families. These third party top up fees arise when a relative or friend is asked to voluntarily top up the Local Authority contribution to someone’s care, so that they can stay in a more expensive care home, or stay in a larger or single occupancy room at a care home, or to enjoy benefits like an en-suite bathroom, or to generally make their care experience better.

If paying a top up fee is presented to you as something which is mandatory rather than optional this is wrong. The responsibility to pay top up fees must be clearly explained to families otherwise the fees can be legally challenged.

Families can find that they are wrongly charged substantial top up fees for long periods of time.
Thanks for your responses. In our situation, top-up fees don't apply, no CHC eligibility, no exemptions on property and AA is being claimed.

Mum (95) has been self-funding in residential care for over six years. Unfortunately, her outgoings (care fees and minimal spending money) exceeds income (state and private pensions, rental income on property and AA) by about £20,000 pa. During the past years we (myself and husband, with joint POA) have been drawing down this amount from her savings, but we now only have about two years of funds left before her property comes into the equation.

This property is currently rented out, the income covering about 20-25% of her care fees (plus, of course, any increases in capital value). We are therefore reluctant to sell it and are looking into ways of raising money on its equity. Mum is too old to qualify for any type of mortgage, we are very wary of equity release and don't want to get involved with a standard DPA where the LA would be doing financial assessments and paying care fees direct.

This loan-type DPA would seem a possible option (obviously after much more research into the financial/legal side of it), so was hoping that someone would have direct experience of using it.
Sorry Pennie, this is something I never got involved with. The way you describe it, it does sound like a good option.

In view of her very advanced years, anything could happen in the next two years. Sometimes it's difficult to know what to wish for.
Your welcome.

Age UK ?

They are the experts on such matters.
This sounds like information from experts.


AGE UK ... in this field , they have few rivals.
Yes, we've decided that we shall be making an appointment with our local AgeUK branch when we return from holiday (after all, we first found it on their factsheet so presumably they will know all about it!).

We have previously used them to help with filling in the AA application form - they were BRILLIANT and I can't recommend them too highly!
One of the ( Now ) very few supporting organisations that strive to support their clients ?

Definitely not one of the " Here's a leaflet " brigade ?

I trust there will be no post lottery when it comes to individual branches ?