A DPA is a type of loan from Worcestershire County Council, your home is used as security against the loan.  

If the value of your share of your house, where you were living as your main or own home before you required residential or nursing home care, is more than the capital threshold for financial assistance from the local authority you will be responsible for the full cost of the care, however, payment may be deferred until the property is either sold by you or your estate. If you own your home with someone else, they will need to consent to the legal charge on the value of your share of the property.  

You will be assessed to see what you can afford to pay from your available income and savings. This will be your assessed contribution towards your care, and you will need to pay this amount while you are living in the residential or nursing care home. The Council will fund the balance of the care fee, and this is the amount that will be the basis of the deferred payment – i.e. the subject of the loan agreement.  

Administration fees for the loan are payable on entering the agreement and annually, in some cases they can be added to the loan along with the interest that accrues. 

The Council will establish the maximum amount of the loan based on the equity available in your share of the property.  

The Deferred Payment builds up as a debt against the equity in the value of your property. The debt is cleared when you (or your estate) sell your home, or when you have other capital available. 

If the person receiving care lacks the capacity to make decisions regarding their finances, there must be a legally appointed representative who can make decisions on their behalf. This must be someone who holds registered Enduring Power of Attorney, Lasting Power of Attorney (for property and finance) or a Deputy appointed by the Court of Protection. If the latter your Deputy Order must give you permission from the Courts to both charge and sell the property. If you are appointed to act for someone, you will be asked to provide verification of this. 

Further information can be found at making financial decisions on someone else's behalf.

• Download: Deferred Payment Agreement Policy (PDF)

You will qualify for a DPA if:

• you have been assessed as requiring 24-hour care in a residential or nursing home
• you are the owner of a property (or share in a property) that was your main or only home and you have a suitable amount of equity available
• you do not have significant other capital (savings or assets that exceed the upper threshold set annually by the council)
• the equity in your property must cover at least one year's care costs

The Care Contribution Assessment Team will contact you to gain information with regards to your property. If certain criteria are met, then a Deferred Payment Agreement leaflet and application form will be issued, giving you the opportunity to apply and be considered for the Deferred Payment Agreement loan.

We strongly recommend you seek independent legal and financial advice to decide if this option is suitable.

If you are happy to proceed, you can complete the Deferred Payment Agreement application by post or email. Please note several supporting documents including proof of identity will be required for the application.

You will be asked to pay an administration fee to cover administrative and legal costs.

If you proceed the Council will place a legal charge on your home to safeguard the loan.

You can end the agreement at any time by paying off the outstanding debt, usually by selling your home. The loan also becomes payable from your estate in the event of your death.

Download: Deferred Payment Agreement Policy (PDF)

Administrative fees and interest rate

Set up Administration Fee is £620 for a single client or £700 for a joint application (2 clients at the same time).

Annual Administration Fee is £140.

Interest Rate (interest will be compounded):

From 1 January 2024 until 30 June 2024 - 4.65%

From 1 July 2024 - 4.05%

During the first 12 weeks of a permanent nursing or residential placement you will be assessed to pay a contribution towards your care from your income and savings.

You or a third party may also be asked if you or they can pay anything further towards your care costs due to your choice in care home exceeding the costs agreed by the council.

From week 13 of your placement the DPA can be used to fund your placement and the additional cost providing there is sufficient equity in your share of the property. 

If you are deemed to be eligible for financial assistance from a date after the first 12 weeks of receiving care in a long-term placement, no property disregard period will be given.

Some useful information can be found at Age UK: Do I have to sell my home to pay for care?