Deferred Payments Information and Application Pack

What is a Deferred Payment?

A deferred payment is a loan, whereby WiltshireCouncil will pay the net care costs on your behalf and defer receiving the payment back from you until some point in the future. Your property will be used as security to repay the loan. The scheme was introduced nationwide from 1st April 2015 as the Care Act 2014 came into force. Its aim is to ensure you do not havetosell your home to pay for care during your lifetime. WiltshireCouncil offer Deferred Payments whether or not you have decided to sell your home.

As part of the process you will be required to undertake a means tested financial assessment based on the income and savings that you have. This assessment will ascertain the weekly contribution that you will make towards the cost of your care from your regular income. Your contribution must be paid direct to the care provider.

What is a Deferred Payment Agreement(DPA)?

It is a legal agreement between you and WiltshireCouncil and allows WiltshireCouncil to apply a charge on your property and provide it with security to pay back the loan. The agreement will need to be signed by you and anyone who stands to financially benefit should your property be sold. Until the agreement is in place, and the subsequent charge registered with the land registry,WiltshireCouncil will not make any payments for care fees. It is strongly advised that you seek legal advice before entering into a DPA.

Who is eligible for a deferred payment?

You are eligible for a DPA if:

(i)You have been assessedas having eligible needs, which Wiltshire Council decides should be met through a permanent care home placement or though supported living;

(ii)You own a legal or beneficial interest in a property which is your only home;

(iii)You have less than the upper capital limit in assets excluding the value of your home;

(iv)Your home is not disregarded as an asset (see below)

(v)You, and anyone with a beneficial interest in the property, agreetothe terms and conditions set out in the Deferred Payment Agreementand return the signed agreement

(vi)You are ableto provide adequate security for the debt, by way of a legal mortgage or land registry charge over your property

(vii)You have capacity to enter into a legal agreement, or someone else has the legal right to make this decision on your behalf.

(viii)You are not using the deferred payment to finance mortgage payments on supported living accommodation

How does it work?

The following process steps would normally apply (please note this is at the point where you have been assessed as having eligible needs and have decided on your care provider/placement and completed a financial assessment)

  • You complete the form deferred paymentapplication form DPA1 and return it to WiltshireCouncil’s finance team.
  • WiltshireCouncilwill check with the land registry that you are sole or part owner of the property
  • Wiltshire Council will arrange anappraisal of the property to provide an opinion as to the value of that property. This will require access to the property so you will be contacted to arrange an appointment
  • When all the required information is received,Wiltshire Councilwill calculate the equity limit (see below) and determine the sustainability of the proposed loan. Wiltshire Council then draw up the Deferred Payment Agreement and send it to you along with the land registry form CH1
  • You check the agreement and sign it along with any co-owners and returnthe DPA1 and CH1.It is recommended you seek legal advice at or before this stage.
  • WiltshireCouncilapply a legal charge against your property and will write to you to confirm.

WiltshireCouncilwill begin to make payments to the care home on your behalf and record all payments made. Payments will be backdated to the start date of care where necessary.

  • WiltshireCouncil willsend you statements every 6 months to keep you updated on the loan costs.

How much money can be deferred?

The maximum amount that can be deferred is known as the Equity Limit. This is calculated as follows:

+ your share of the property value

-less 10% (to allow for future selling costs)

-less the lower capital limit (currently £14,250)

-less any charges already placed on the property (i.e. existing mortgage) where appropriate.

The amounts deducted from the property value act as a buffer, to cover any subsequent interest which continues to accrue, and will provide a small ‘cushion’ in case of small variations in value of the property. Generally it should take two years ormore to reach the equity limit. Where this is not the case Wiltshire Council will consider whether the cost of your care is sustainable under the deferred payments scheme. This could mean that a third party needs to contribute more towards your care in addition to the deferred payment or a more sustainable care option needs to be considered.

How much will it cost me to have a DPA?

The overall costs will depend on the length of time the DPA lasts. A summary of fees are given below:

  • Each DPA incurs a set-up fee of £579 – This covers the costs of the legal work and valuation of the property
  • Each DPA incurs a closure fee of £144 – This covers the costs of the legal work and removing the legal charge on the property
  • Interest – Interest is charged from the date the payments are made for the care to the date the full balance of the DPA is repaid. Interest is charged on a compound basis. The interest rate applied is the government’s “15-year average gilt yield” plus 0.15%. The 15-year average gilt yield is set by the Office for Budget Responsibility (OBR) twice a year, on 1st January and 1st July, in their Economic and Fiscal Outlook report. The initial interest rate will be denoted on your deferred payment agreement and you will be written to each time this rate changes.
  • Valuation fees – Each valuation costs £150. The initial valuation is included in the initial set up fee. Further valuations at 50% and 70% and others where required will incur this charge and will be added to the deferred payment.
  • Other costs –Wiltshire Council will not charge an administration fee for running the DPA, but there may be other costs that are incurred, for instance legal fees to recover a debt due.
  • Please note: As standard all fees and interest will be automatically added to your deferred payment.
  • PLEASE NOTE: if for any reason the deferred payment agreement does not go ahead after completing the application form DPA1, you will be liable for any costs paid by Wiltshire Council in setting up the deferred payment, including valuation and land registry fees. You will be sent an invoice for the costs incurred.

When will payments for my care cease to be deferred?

Payments against the DPA will cease to be paid by Wiltshire Council upon one of the following events (please note: fees and interest will continue to be charged against the Deferred Payment until it is repaid in full):

  1. Where the equity limit has been reached – When the equity limit is at 50% and 70%, Wiltshire Council will arrange for a revised valuation of your property. This will determine a revised equity value and limit and date when the DPA equity limit will be reached. When you are within 6 months of the equity limit a member of Wiltshire Council’s care team will work with you to seek approval for your care to be funded by Wiltshire Council (less your client contribution).
  2. Where the value of your property has decreased in value so the upper capital limit is reached – You must inform Wiltshire Council if you believe this to be the case. WiltshireCouncil will arrange for a revised valuation of your property. The care team dealing with your case will seek approval for your care to be funded by WiltshireCouncil (less your client contribution).
  3. Where you become eligible for full funding from a local authority or health funding to pay for your care
  4. Where your property becomes disregarded for any reason
  5. Where you no longer have a need for care
  6. Where you die – Future correspondence will be with the executor of your estate and payment will be expected 90days after the date of your death. After this 90 day period, if WiltshireCouncilconclude that active steps to repay the debt are not being taken, WiltshireCouncil may enter into legal proceedings to reclaim the amount due.
  7. Where you or a third party decides to pay off your Deferred Payment, for instance when your house is sold – WiltshireCouncil will assume that you will be paying for your own care in the futureand will cease payments to the care home and inform them in writing, giving 30 days notice, that you will pay for the full cost of care from the specified date. You must arrange to pay the care home directly from that date. You must inform WiltshireCouncil if your assets drop below the upper capital limit giving three months notice of reaching this limit (funding will not be backdated to before the date you asked WiltshireCouncil for funding). If you believe you have reached the upper capital limit when the Deferred Payment closes you must inform us immediately. Wiltshire Council will arrange a re-assessment of your needs and finances. The care team dealing with your case will seek approval for your care to be funded by WiltshireCouncil (less your client contribution).

In all the instances above you will receive 30 days notice that payments will cease and a Final DPA statement. No further payments will be charged against the DPA, although interest and charges will still accrue, and you will receive 6 monthly statements until the DPA is repaid in full. When you are ready to repay the DPA balance, you must informWiltshireCouncil who will prepare a final DPA statement (see FAQ’s below “Q. I want to repay my DPA, who do I contact?”). WiltshireCouncil will arrange for a valuation of your property every year after the end of the DPA whilst the deferred payment amount remains unpaid.

  1. Where you breach the terms of the DPA as set out in the agreement -Wiltshire Council will assume that you will be paying for your own care in the futureand will cease payments to the care home and inform them in writing, giving 30 days notice, that you will pay for the full cost of care from the specified date. You must arrange to pay the care home directly from that date. You will receive a final DPA statement and an invoice from Wiltshire Council for the full DPA costs. If the invoice remains unpaid after 30 days, Wiltshire Council will issue you a reminder notice and after a further 14 days a final notice. If the invoice still remains unpaid, Wiltshire Council will issue legal proceedings to recover the money due. Interest will still accrue until the debt is paid and Wiltshire Council will recharge any legal costs incurred to recover the debt and charge a higher rate of interest (typically 8%) on the balance due, 30 days after the invoice was raised.

When does the DPA end?

The DPA does not end until the full balance of the deferred payment, including interest and fees, is repaid to Wiltshire Council. Until this time interest and fees will continue to accrue. When the final payment is received Wiltshire Council will release the legal charge on your property with the land registry.

What do I do to request a deferred payment?Complete form “DPA1 - Application for a deferred payment” and return it to the Business Services Finance team as stated at the top of the form.

What happens if Wiltshire Council cannot offer me a Deferred Payment?

It is hoped that instances where this occurs will be rare, but can occur if:

  1. You do not return the Deferred Payment Agreement
  2. A co-owner will not sign the Deferred Payment Agreement
  3. Wiltshire Council cannot register a first legal charge on your property
  4. You do not meet the eligibility criteria for a deferred payment

In these instances you will have to find alternative ways to fund your care and make arrangements to pay the care provider direct until your assets reach the upper capital limit, at which point you should contact Wiltshire Council to request funding.

There may be instances where the DPA is not offered through no fault of your own, these include:

  1. The value of your property means you have no equity as an asset
  2. Your property is disregarded
  3. It transpires that you do not have a beneficial interest in your property

In these instances Wiltshire Councilwould begin the process to fundyour care.

For more information about Wiltshire Council’s Deferred Payment Scheme, please see FAQ’s below and visit selecting the Deferred Payments tile. If you wish to speak to someone at Wiltshire Council about the scheme please contact either Darren Law on 01225 713905 or Kerry Davies on 01225 713431. Or you can email Darren on or Kerry on

To apply for a deferred payment please complete the form DPA1 below and return it to:

By email: please scan a completed SIGNED copy with required scanned attachments to

By Post: Business Services Finance, Placements Finance Team, Wiltshire Council, County Hall, Trowbridge, Wiltshire, BA14 8JN.

Deferred Payment Overview Page 1 of 5

Frequently Asked Question’s (FAQ’s)

Q. Where can I get independent financial advice?

A. Financial advice is available to older people and their families to help them plan for long-term care, should they need it. WiltshireCouncil, working in partnership with other organisations, has developed an arrangement that ensures financial advice and support is easy to obtain and access.Many older people face significant challenges, including having a large investment in their homes with little income to provide for long-term care. Also, most wish to pass on some financial benefit to their families.

WiltshireCouncil has identified two qualified and accredited independent financial companies with professional competency and accreditation in long-term care planning. These companies, along with a number of others, are approved by the Society of Later Life Advisors (SOLLA):

Ashcourt RowanEldercare Solutions
Tel: 01225 469424 Tel: 0800 0821155

These two organisations have been identified by Wiltshire Council to provide independent specialist advice and products specifically tailored to the needs of older people. Please note that these companies will charge for their services. Charges will be made clear to you before you decide to accept their services.

There are a number of other Independent Financial Advisors available who are accredited by the Society of Later Life Advisors (SOLLA). You can search for SOLLA registered advisors through their website www.societyoflaterlifeadvisers.co.uk.Wiltshire Council recommends that you should always check companies have this accreditation in place before discussing your financial situation with them.

  1. How is the Equity Limit calculated?

A.The maximum amount that can be deferred is known as the Equity Limit. This is calculated as follows:

+ your share of the property value

- less 10% (to allow for future selling costs)

- less the lower capital limit (currently £14,250)

- less any charges already placed on the property (i.e. existing mortgage) where appropriate.

For example: You own 50% of a property worth £200,000and there is no mortgage or other charges on the property. The equity limit is calculated as follows:

Full property value (A)£200,000

Your share of the property value (50%) (B)£100,000

less 10% (C) -£20,000

less the lower capital limit (D) -£14,250

less any charges on the property (E) -£0

Equity Limit(B – C – D - E) £65,750

Q.What is a ‘top-up’?

A. This is the extra cost of your care placement over and above the costs Wiltshire Council would normally pay. You must bear in mind when choosing your chosen provider that if you have a ‘top-up’ and you later apply for Council funding, for instance when the equity limit is reached, Wiltshire Council will give consideration as to whether it is prepared to fund your top-up ongoing. If a revised fee cannot be negotiated in your current placement provider, Wiltshire Council will consider if your needs must be met in another placement.

Q.What is meant by sustainability?

A. Generally, the NET care fees paid by Wiltshire Council under the deferred payment, should take two years (104 weeks) or more to reach the equity limit. The length of time it will take to reach the equity limit will be calculated before the deferred payment agreement is sent to you. Where the equity limit will be reached within two years, Wiltshire Council will consider whether the cost of your chosen care is sustainable under the deferred payments scheme. This could mean that a third party needs to contribute more towards your care in addition to the deferred payment or you need to consider care at a lower cost. You will be contacted by a member of our care team should this be the case.