Deferred payments

Should you be assessed as having to pay the full cost towards your residential care, but are not able to pay the full weekly charge you can pay via a deferred payment.

For many people their savings or capital is tied up in their home, by setting up a deferred payment the council offers you a loan, paying the ‘deferred’ amount until the value of your home is released and you are able to repay the loan.

This is not like a traditional loan with a fixed amount from the start, but continues for as long as you need it to. Your weekly contribution will be worked out from your income and other savings with the council loaning you the balance each week.

You can discuss the option of a deferred payment with your Social Worker or during the financial assessment process.

For example

Mr Smith is 86 and lives in a residential care home that costs £500 per week.

He owns his own home that his wife still lives in. His financial assessment says that he will have to pay the full cost towards his residential care however the majority of his savings are tied up in the house meaning that he can only afford to pay £200 per week at the moment.

Mr Smith has a deferred payment agreement in place meaning that the council is loaning him £300 per week until he is able to repay on the sale of the house.

Mr Smith lives in the residential care home for 100 weeks meaning the total cost of his stay is:

100 weeks x £500 per week = £50,000

During his stay Mr Smith contributed £20,000 and the Council loaned him £30,000.

On the sale of the house the £30,000 plus interest will need to be repaid to the council.