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Care and Support Charging and Financial Assessment Framework

10.5 The Deferred Payment Agreement (DPA) application process

If you wish to apply for a Deferred Payment Agreement (DPA), you will need to do this in good time to allow for your application to be considered and legal arrangements to be in place before you need funding (for example, to be in place before the end of the 12-week property disregard period).

If you have been in a care home on a self-funding basis (because of the level of your income or capital) and you now wish to apply for Council funding and a DPA, you should submit an application for a DPA as soon as possible and no later than 6 weeks after the need to apply for DPA has been identified either by us or you74 .

The Council will commence funding:

  • If you75 approach Social Services before the date your capital (excluding your property) dropped to below the upper capital limit of £23,250, the Council will fund from the date your capital drops to below the upper capital limit
  • If you76 approach Social Services after your capital has dropped to below the upper capital limit of £23,250 the Council will fund from the date you approached Social Services

1. Information given to you about DPAs

If your identified needs show that a care home placement is appropriate to meet your needs, we will:

  • Check with you whether you own your home and establish whether your property will be disregarded in your financial assessment.
  • Carry out appropriate checks, including previous financial assessments and a Land Registry search.
  • Tell you if we think you are eligible for a 12-week property disregard and DPA as soon as a placement in a care home is identified as appropriate.
  • Give you information about the deferred payment scheme.
  • Carry out a financial assessment of your situation (your income, savings, details and value of your property capital, outgoings relating to your property).
  • Invite you to apply for a DPA, giving a date by which, you should return the completed application form (this date should be no later than 6 weeks from the date your placement started in the care home).
  • Make clear to you that the DPA will only be agreed by the Council if all the owners of the property agree to the Legal Charge.
  • Tell you if you need to arrange a formal valuation of your property, if we do not agree with the valuation you obtain the Council may obtain its own valuation the Council will then discuss the valuations with you to mutually agree a valuation. The costs the Council incurs in carrying out the valuation will be reflected in the administration costs charged to you in the set-up fees for the DPA.

2. Submit your DPA application within 6 weeks

A DPA application form must be completed, signed by you77 and returned to us within 6 weeks of admission to a care home on a permanent basis.

The application for the DPA must include the following information:

  • The room rate from the 13th week
  • Signed confirmation from the care home that the rate from week 13 is agreed
  • The value of the property
  • Confirmation of who owns the property and on what basis (for example, joint tenants, tenants in common, trust)
  • Whether you intend to seek a first party top up (see First Party Top Ups) and if so the amount
  • A copy of the property building insurance
  • Any Lasting Power of Attorney or Deputyship Order or a certified copy (if appropriate)
  • Any tenancy agreement (if appropriate)
  • If the property was jointly owned and one party has died the grant of probate or Will or a certified copy

If you are already in a care home and become eligible to apply for a DPA in other circumstances you78 should submit an application for a DPA as soon as possible and no later than 6 weeks after the need to apply for DPA has been identified either by us or you. For example, this could be where your property had previously been subject to a statutory disregard, but that disregard has now ended.

You79 will need to speak with the care home and negotiate the cost of care from week 13 onwards and obtain written confirmation from the care provider of the agreed rate, this must then be provided to the Council together with your application for a DPA.

If the DPA application is not fully completed and returned to the Council by the end of week 6, the application will not progress, and at the end of week 12 the Council will deem you to be self-funding and you will be required to make payment of the full cost of care directly to the care provider.

3. Considering your application and making a decision within 10 working days

We will check your DPA application form and follow up on any queries that may arise, including ensuring a property valuation has been obtained. We will need to have all information related to your DPA application, including what your intentions are for the property and the equity available. If you have given us all the relevant information, we will consider all the information and make a decision.

If your application doesn’t meet the criteria for a mandatory DPA, we will carry out an assessment of whether your DPA is sustainable.

This assessment will address, among other things, the likely period of the DPA, the equity available, the level of any top-up and the period of time you would be able to defer the weekly costs. A top-up would be needed if you chose a care home whose fees are greater than the amount, we would expect to pay to meet your identified needs (see the 'Choice of Accommodation and Additional Payments Policy').

The factors which will be considered when assessing sustainability are:

  • the likely period you will want the DPA
  • the equity available
  • the sustainability of any contribution from savings
  • the flexibility to meet future care needs
  • the amount of any top-up payment for preferred accommodation
  • the period of time you would be able to defer your costs for

We will decide whether the application meets the criteria set out in this DPA policy. If your application is accepted, we will write to you to confirm our decision. We aim to do this within a week of receiving your application unless specialist financial or legal advice is required. This is our formal offer of a DPA to you.

Our letter will also state:

  • any conditions attached to the DPA, (for example, insurance requirements of the property)
  • estimated administration charges80 and interest rate that will be applied to the deferred debt
  • when and how often we will send you statements of your deferred debt
  • any benefits you may be entitled to claim when you make your own care funding arrangements and how to do this
  • your assessed weekly charge which you need to pay on an ongoing basis
  • the agreed level of your weekly disposable income allowance
  • the invoicing arrangements and how to pay your ongoing weekly assessed charge
  • that failure to maintain your assessed weekly charge could result in the DPA being terminated
  • the weekly amount that is agreed to be deferred under the DPA and any other costs agreed to be deferred under the DPA where the agreed security is a legal charge, and there are joint owners of the property, they must all consent to the placing of a legal charge against the property and, that if any of the joint owners do anything to prevent the legal charge being placed this will result in the offer of the DPA being withdrawn and the Council will immediately notify your care provider that it is ceasing to be involved in the placement.

Our letter constitutes an offer of a DPA to you and will state the date from which the DPA is proposed to start. It will be produced in duplicate, one copy to be signed by you and to be returned as your acceptance of the DPA offer. The other copy is to be retained by you.

The Councils Legal Department will draw up a DPA and documents relating to your identified security (usually a legal charge document relating to your property).

These are legally-binding agreements and the Council would usually send these directly to your legal adviser so that you can take advice from your legal adviser before you sign and return the DPA and documents (see Financial Information and Advice relating to a Deferred Payment Agreement (DPA). If you do not have legal advisor, The Council will send these directly to you or your financial representative.

You will need to read the Agreement, sign the documents and the DPA and return the Agreement and the documents relating to your security.

If other people need to give their consent as well as you (for example, if your property is jointly owned, or leasehold), you will need to obtain ALL those necessary signatures on the documents81 . We will tell you if this applies to you.

You must return the signed DPA and relevant signed legal documents (including signatures from other parties where needed) within 28 days. If you don’t return the signed Agreement and signed document(s) relating to your security, we will not be able to proceed with your DPA and you will need to make your own care funding arrangements. We will contact your care accommodation provider and tell them the date that the Council will stop funding your care. You will be charged the administration costs we incur.

If the reason for not signing is because of lacking mental capacity, see DPAs for People Lacking Mental Capacity.

If your DPA application is refused, we will tell you the reason/s and we will write to you to confirm this decision. You can appeal this decision if you wish - see Appealing the Council’s decision about a DPA.

Our letter will explain:

  • the reason(s) for refusing your application
  • the start date for when you need to make your own care funding arrangements (usually the end of your 12-week property disregard period).
  • any benefits you may be entitled to claim when you make your own care funding arrangements and how to do this
  • how to appeal our decision about your DPA application
  • how to make a complaint
  • that we will tell your care accommodation provider the date the Council will stop funding your care
  • If there are administration costs that you need to pay, how much these are.

Where a DPA application is refused, any administration charges will usually be waived. However this will be considered on a case by case basis and if there is evidence that the application was pursued unreasonably (for example if you insisted on pursuing an application despite our advice about your eligibility), or you belatedly responded to our requests for information needed in order to establish your eligibility, or otherwise put us to excessive trouble, then the charges will be made.

4. Your DPA starts

At the start of the DPA we will open up an account to record the following:

  • The valuation of your property and the date of this valuation
  • Your agreed weekly deferred amount
  • Administration costs and interest charges to be applied
  • The date of the first statement, which will usually be within 6 months of the start of your DPA82 and every 6 months thereafter - these will be produced to match the review of interest rates by the government (1 January and 1 July each year)

You can request to keep up to £144.00 per week of your income from the date the DPA commences83 . Please note this will mean the amount secured against your property will increase quicker.

We may require you to revalue your property when debt deferred reaches 50% of the value of the security, and periodically thereafter. Any cost of revaluation will be re-charged to you through Administration charges.

5. Conditions placed on DPAs

We can’t agree to a DPA if no suitable security is available or you wish to defer a larger amount than (in our assessment as set in The DPA Application Process) you can provide security for.

We will require prompt settlement of your assessed charge during the lifetime of your DPA. (See 'Default Provisions' which deals with the Council’s position in the event these contributions are not settled promptly.)

We will require your property to be properly maintained and insured. We may require evidence of your property insurance at any time, including evidence that your insurer has been informed if your property is unoccupied for any period. If maintaining your property means that some of your savings are reasonably required to be used to bring the property up to a suitable standard of maintenance, we will not withhold its agreement to this use of capital unless there is evidence the level of cost is deemed unreasonable.

When an application for DPA is received we may require you to arrange a formal valuation of the property or the share of it owned by you. if you choose not to do so and the Council arranges a valuation the Council will charge you the costs of this. (See 'The Application Process' above on how to proceed if these valuations differ.)

We may require you to arrange for a re-valuation when the amount deferred reaches 50% of the value of the security to ensure the level of deferred debt stays within the equity available. Any change in the value will be recorded and the potential impact on the DPA calculated and communicated to you. If you choose not to do so and the Council arranges a valuation the cost of this re-valuation will be charged to you as an administration cost.

If your level of capital changes. The following are examples but are not a comprehensive list:

  • If you inherit a sum of money
  • If structural problems are discovered at your property (for example, subsidence)
  • Should a close family member move into or out of your property

When your deferred debt reaches 75% of the value of the security your Social Worker will review the cost of your care and have a discussion with you about:

  • when you might be eligible for means-tested support
  • implications on any top-up payments if they are currently included in your care costs (through your preferred accommodation choice)
  • potential changes to your welfare benefit entitlements.
  • 74Or your appointed representative – see Mental Capacity to manage Finance for more information.
  • 75Or your appointed representative – see Mental Capacity to manage Finance for more information.
  • 76Or your appointed representative – see Mental Capacity to manage Finance for more information.
  • 77Or your appointed representative – see Mental Capacity to manage Finance for more information.
  • 78Or your appointed representative – see Mental Capacity to manage Finance for more information.
  • 79Or your appointed representative – see Mental Capacity to manage Finance for more information.
  • 80Clause 9.30, 9.69 and 9.8 of the Care and Support Statutory Guidance.
  • 81If you are acting on behalf of the Applicant as their legally-appointed representative and you are also a joint owner of the property being used as security, you will need to give permission both in your own right as a joint owner, and as the representative of the applicant as a joint owner on legal charge documents relating to the property.
  • 82Paragraph 11(d)(i)(aa) of the Care and Support (deferred Payment) Regulations 2014.
  • 83Clause 6(1) and 6(2) of the Care and Support (Deferred Payment) Regulations 2014.