If you live in or are moving into a care home, your local council may defer your payment of the care home fees. There are 2 way of doing this:
- deferred payment agreements
- charging orders
Deferred payment agreements
A deferred payment agreement is an agreement between you and the council. It defines the portion of your care home fees to be deferred.
It provides for the grant to the council of a standard security over the home to cover the deferred amount.
Before entering into a deferred payment agreement, you can seek independent advice from a solicitor.
Find out more about legal advice
You could be eligible for a deferred payment agreement if you:
- have been assessed as needing a place in a care home place
- have capital at or below the lower capital limit of £18,000, excluding the value of your home
- would not normally have your home disregarded from such a financial assessment
- don't want to sell your home or can't to sell it quickly enough to pay for care home fees
- can grant the council a standard security against your home
A charging order is a legal charge on your property. It make sure a creditor is paid money owed to them when a property is sold. It recovers the fees the council's paid if you'd not been able to or chosen not to sell your home.
Councils often use charging orders as an alternative to a deferred payment agreement.
Read more about charging orders at Section 23 of the Health and Social Security and Social Services Adjudication Act 1983
Deferred payment or charging order?
The use of deferred payment agreements has been very low since they were introduced in 2002. Many councils have opted to use charging orders instead.
Councils should, however, only use charging orders as a way to recover debts and not in place of deferred payment agreements.
The payment of care home fees is a complex subject and depends on many things which are unique to you.
If you want detailed information or personal advice, ask an experienced independent adviser like:
Advice Direct Scotland – phone 0808 800 9060, 9am to 5pm Monday to Friday.
Age Scotland – its fact sheets have information on paying for care homes or phone their helpline on 0800 12 44 222.
The information was last updated on: 14th October 2020