DEFERRED PAYMENT SCHEME AGREEMENT

Care Act 2014

METROPOLITAN BOROUGH OF BURY

And

[INSERT NAME OF ADULT RECIPIENT OF CARE]

And, if appropriate the appointed Registered Lasting Power of Attorney or the Court of Protection appointed Deputy for Property and Affairs

[INSERT NAME OF ATTORNEY/DEPUTY]

PROPERTY: [INSERT ADDRESS AND REGISTERED TITLE NUMBER OF PROPERTY ON WHICH AGREEMENT IS TO BE SECURED]

This Agreement is made between the Metropolitan Borough of Bury (“the local authority”, “the council”), of Town Hall, Knowsley Street, Bury, Lancs, BL9 0SW and [insert name of adult recipient of care] (“you”, “the borrower”), of [insert address of adult recipient of care].

Background

The Deferred Payment Agreement has been entered into between the Parties in accordance with the Care and Support (Deferred Payment) Regulations 2014.

It has been identified that you require care and accommodation in the form of a care home or care and support in an extra care housing or supported living scheme. The Local Authority at their discretion will enter into a Deferred Payment Agreement with people whose care and support is provided in supported living accommodation.

On the basis that your Financial Assessment has determined that you own capital, including the value of your property in excess of the upper capital limit for Council funding, it has been identified that you are responsible for paying the full amount of the Care Charges. You cannot afford to pay the full fees and have asked the Council to pay part of the fees from now on by way of a Deferred Payment Agreement.

You will be required to contribute from your weekly income and other assets towards the costs of your care and to pay the deferred amount of the fees in the future.

You have a beneficial interest in the property detailed above. The Council has offered you a Deferred Payment Agreement allowing some of the costs to be deferred and accrue against the property owned by you. Administrative Charges and Interest will be charged in accordance with the terms of this Agreement.

The Council will obtain security for the deferred payment by placing a Legal Charge on the Land Registry against the property.

You understand that the total debt to be repaid on the termination of this Agreement is the Care Charges throughout the term of the Agreement less any Assessed Contribution you have paid, and any Administrative Charges you have not paid plus Interest.

The Council advises that you seek independent legal and independent financial advice before entering into this Agreement.

1.  Interpretation

1.1  In this agreement, the following words have the following meanings:

Accommodation: / The care home identified in Schedule 1, and as it may be amended in accordance with term 2.3 and 2.4 below.
Administrative Charges: / The Council’s reasonable administrative costs incurred in respect of this Agreement, which are payable under term 6 below, which may include but are not limited to, those charges for which estimates are given in Schedule 2 on page 14.
Agreement: / The terms set out in this document and attached schedules.
Assessed Contribution: / The amount which is not deferred that you will be required to pay directly towards the Care Charges.
Capital Limit (upper/lower): / The sums specified in regulation 12 of the Care and Support (Charging and Assessment of Resources) Regulations 2014 and as amended from time to time.
Care Charges: / The cost of the care home services and/or support which are specified by description and weekly amount in Schedule 1, and as may be amended in accordance with the terms of this Agreement.
Commencement Date: / The date that the Council shall commence payment of the deferred Care Charges.
Debt: / the balance of the Loan which has not yet been repaid, together with any interest and Administrative Charges already charged and not yet repaid.
Disposable Income Allowance: / The weekly amount of income the Council can leave the person with as provided in the Regulations related to deferred payments made under the Care Act 2014 and anything above this may be taken into account by the Council in determining charges.
Financial Assessment: / The Financial Assessment carried out under section 17 of the Care Act 2014.
Income: / Your income as calculated in accordance with the Financial Assessment carried out under section 17 of the Care Act 2014.
Lending Limit: / The maximum amount the Council will lend for your Care Charges as set out in Schedule 1.
Loan: / The total amount, at any time, which has been lent under this Agreement to pay Care Charges, and the words “lend”, “lending” and “lent” are used in this Agreement to describe the act of lending any amount to pay Care Charges.
Personal Expenses Allowance: / The weekly minimum amount of income the Council must leave the person with and anything above this may be taken into account by the Council in determining charges.
Property: / The property and any other assets against which the loan is secured as identified on page 1 and in Schedule 1 of this Agreement.
Rate of Interest: / The rate of interest charged to you for the loan as stated in Schedule 1, Schedule 2 and as it may be varied under term 5.4.

1.2  Where a reference is made in this Agreement to any legislation or legislative provision, it includes reference to that statute or statutory provision as it may from time to time be amended, extended or re-enacted.

1.3  Where the context allows or requires, words in the singular include the plural and words in the plural include the singular.

2.  How the Loan will be made

2.1  You have asked and the Council has agreed to contract with an independent care provider to provide you with care home services in your chosen Accommodation. The Council will pay the Care Charges to the independent care provider.

2.2  The amount loaned will not be more than the weekly Care Charge for your accommodation as specified in Schedule 1. The loan will be made by deferring your obligation to pay Care Charges which then become payable to the Council. The details of the Accommodation and the Care Charges are set out in Schedule 1 together with the Lending Limit.

2.3  If you wish to move from the Accommodation into another care home you should inform the Council so that the existing contract with the independent care provider can be terminated in accordance with the Council’s contractual obligations and new arrangements can be made.

2.4  The new care home will be substituted as the Accommodation, and the care home fees payable in respect of the new Accommodation will be substituted as the Care Charges, provided that the Council considers they are necessary to meet the borrower’s needs while the borrower is living in the Accommodation.

2.5  The Care Charges are subject to increase from time to time as agreed by the Council and the Accommodation provider. The borrower will be notified within 28 days of any change in the Care Costs being agreed.

3.  Assessed Contributions and Disposable Income Allowance

3.1  The amount of the weekly Care Charge for which the Council is to lend, as set out in Schedule 1, is subject to the Lending Limit and takes into account the fact that the Council requires you to make an Assessed Contribution from your income and capital towards the payment of the weekly Care Charges, as they fall due.

3.2  The Loan will be equal to the difference between your weekly Assessed Contribution and the Care Charges.

3.3  The Assessed Contribution will exclude an amount agreed by the Council with the borrower, the minimum being equal to the Personal Expenses Allowance and a maximum equal to the Disposable Income Allowance.

3.4  The Assessed Contribution will be reviewed from time to time and the borrower will be notified within 28 days of the effective date except were the Council was waiting for financial information from the borrower to complete the Financial Assessment.

3.5  Whilst the Council continues to pay part of your Care Charges under this Agreement the weekly value of the Loan and your actual weekly income should not be greater than the weekly Care Charges.

3.6  If it comes to the attention of the Council that your actual income has exceeded the amount you declared to the Council for the calculation of your Assessed Contribution the amount of the Loan will be reduced to comply with the requirement of paragraph 3.5.

3.7  The Council may, upon giving you at least 30 days written notice require you to repay the amount if any, by which that part of the Loan already provided under this Agreement for Care Charges in respect of that period exceeded the difference between the Care Charges actually payable and the amount by which your income exceeded your Assessed Contribution.

3.8  The future amount that the Council will lend in respect of Care Charges will be adjusted to reflect the corrected information about your income.

4.  Ceasing to Lend Further Amounts

4.1  The Council will cease to lend you any further amounts when the value of the Loan reaches the Lending Limit. The calculation of the Lending Limit is set out in the Council’s Deferred Payment Scheme Policy, and briefly in Schedule 1 of this Agreement.

4.2  The Council will give you at least 30 days written notice of the date on which the Lending Limit will be reached unless it is not reasonably practicable to do so because, for example, the Lending Limit is reached by reason of a fall in the value of the property.

4.3  The Council will not lend any further amount under this Agreement, even where the total amount of the Loan already provided is less than the Lending Limit, at any time when;

4.3.1 You are no longer receiving care and support in a care home,

4.3.2 In the reasonable view of the Council your needs should no longer be met by the provision of care and support in a care home.

4.4  The Property can no longer be insured against all usual risks, unless there are reasonable grounds for concluding that the site value of the Property, disregarding any building on the Property, is adequate security for the Debt, together with such further lending as is to be provided.

4.5  If you become eligible for Council funding because your financial resources in terms of capital, as calculated for the purposes of the Financial Assessment carried out under section 17 of the Care Act 2014, fall below the upper Capital Limit as specified in Regulation 12 of the Care and Support (Charging and Assessment of Resources) Regulations 2014.

4.6  If since the date of this Agreement the Property would be disregarded for the purposes of assessing your financial resources in terms of capital as calculated for the purposes of the Financial Assessment carried out under section 17 of the Care Act 2014.

5.  Interest

5.1  Interest will be charged at the Rate of Interest as stated in Schedule 1 and Schedule 2 and may be varied under term 5.4.

5.2  You can choose to either add the interest to the total amount of Debt as it accrues or you may pay it separately. Your choice of how interest will be paid is recorded at Schedule 1. You can change the method of interest payment by giving the Council at least 28 days written notice. If you do so, you may return to the other method of paying interest at any time by giving the Council at least 28 days written notice that you wish to do so.

5.3  Interest will be calculated and applied on a four weekly basis in line with the four weekly payments to the care home provider. Interest will be compound and added to the Debt on the date when an amount is lent to you for Care Charges, unless the interest is paid before that date.

5.4  The Council may vary the Rate of Interest so as to reflect, in a proportionate and reasonable way any change in the cost of funding the Loan upon giving you at least 28 days’ written notice if the Rate of Interest is to be increased or without notice if the Rate of Interest is to be reduced, provided that:

5.4.1  the Rate of Interest may never exceed the maximum rate which the Council is permitted to charge by regulations made under the Care Act 2014; and

5.4.2  if the Council exercises its power to increase the Rate of Interest, it will also subsequently exercise its power so as to reduce the Rate of Interest so as to reflect, in a proportionate and reasonable way, the cost of funding the Loan whenever the cost is reduced.

6.  Administrative Charges and Interest on Administrative Charges

6.1  The Council’s reasonable Administrative Charges in respect of this Agreement will be charged to you.

6.2  The Council’s current rates of Administrative Charges are specified in Schedule 2 of this Agreement. The Council will give you written notice of any changes to the rates to be charged.

6.3  The Administrative Charges you have to pay are in relation to ascertaining the ownership and value of the Property, registration of the legal charge, perfection of the security, discharging the security and for the purpose of ensuring compliance with the Agreement will be the actual costs incurred, and any other costs you have to pay will be the average cost to the Council incurred in relation to deferred payment agreements generally.

6.4  You can choose to either add the Administrative Charges to the total amount deferred as they are incurred or you may pay them separately. Your choice of how the Administrative Charges will be paid is recorded at Schedule 1. As each Administrative Charge falls due you will be given 28 days written notice and you can choose the method of payment.