Deferred payments

Our Deferred Payment Scheme is designed to help you if you have been assessed as having to pay the full cost of your residential care, but cannot afford to pay the full weekly charge because most of your capital is tied up in your home.

Who can apply

To apply for the Deferred Payment Scheme you must:

  • have capital (excluding the property) of less than £23,250
  • have eligible care and support needs which have been assessed and require permanent residency in a registered care home
  • own or have part legal ownership of a property, which is not benefitting from a property disregard, and ensure your property is registered with the Land Registry (if the property is not, you must arrange for it to be registered at your own expense)
  • have mental capacity to agree to a deferred payment agreement or have a legally appointed agent willing to agree this.

How it works

We can offer you a loan to pay towards your care costs, which is secured against the value of your home. You will not receive a lump sum of money as with a normal loan, but instead we will pay an agreed weekly amount towards the costs of your care. We call this a Deferred Payment.

You will also pay a weekly contribution towards the cost of your care based on what you can afford. We will carry out an assessment to work out the exact amount. The loan amount (or deferred payment) builds up as a debt, which is repaid when the money tied up in your home is eventually released. This will normally be when the property is sold, either right away or later on.

Charging interest

The amount you need to repay will include an interest charge, in the same way a normal loan would be charged if borrowed from a bank. The maximum interest rate charged is fixed by the government and is based on the cost of government borrowing. This is often reviewed and could change on 1 January and 1 July each year. The interest will be compounded on an annual basis.

The interest will apply from the day you enter into the Deferred Payment Scheme. You will receive regular annual statements advising you how your charge is being calculated and what the outstanding sum on your deferred payment account is.

What happens next 

If you decide to use the Deferred Payments Scheme, you enter into a legal contract with the Council by signing an agreement. We then place what is called a 'legal charge' on your property to safeguard the loan. 

The agreement covers our responsibilities as well as your responsibilities, which include that you must ensure your home is insured and maintained. If you incur expenses in maintaining your home while you are in residential or nursing care, these will be allowed for in the amount that you are assessed as contributing each week from your capital and income.

You can end the agreement at any time, for example if you sell your home and the loan then becomes payable immediately. Otherwise the agreement ends when you die and the loan becomes payable 90 days after your death. We are unable to cancel the agreement without your consent before.

There can be no other beneficial interests on the property, for example outstanding mortgages or equity release schemes, unless this is approved by us. 

Whatever you decide, it is really important to get financial advice at the right time so that you can make informed and balanced decisions about your finances. We would always recommend you to speak with someone independent. A financial adviser can
help you understand how you can make your money work best for you to help cover any long term care costs.


 

How much does it cost

There is a one-off charge to join the Deferred Payment Scheme. This fee covers:

  • Our administration costs
  • Legal costs
  • A Land Registry charge
  • A land search.

How to apply

For further information or to apply, please contact:

Richmond Council Charging Helpline
Phone: 020 8831 6400
Email: charginghelpline@richmond.gov.uk

Acceptance of any application under the Scheme is subject to you meeting the criteria and the Council being able to obtain security in your property.