Deferred payment agreements

A deferred payment agreement is a loan from your council, secured against your home, that covers your care home fees. You do not repay it during your lifetime unless you choose to; instead the council recovers the money later, usually when the property is sold or from your estate. It means you may not have to sell your home to pay for care.

How it works

The council pays some or all of your care fees and adds them to a running total secured against your property, like a charge on the home. You can usually still rent the property out to help cover costs. When the home is eventually sold, or after death, the council is repaid what it is owed, and the rest passes to your estate.

When you can get one

• You own a home that counts in the means test (no partner or other qualifying person living there).
• Your other savings and capital are below a set level (broadly the £23,250 threshold, excluding the home).
• Your stay is a permanent move into residential or nursing care.

Councils have some discretion, and must offer agreements to people who meet the criteria.

The costs to know about

Deferred payments are not free. The council charges interest on the growing balance, and may charge set-up and administration fees. Interest accrues from day one. Over a long stay the total owed can become significant, so weigh it against selling the home or other options, and get independent financial advice.

How it fits with the 12-week disregard

Many people use the 12-week property disregard first (when the council helps for the first 12 weeks), then move onto a deferred payment agreement so the council keeps paying after that, without forcing a sale. Ask your council’s adult social services about both. See also how to pay for a care home.

England only. General information, not financial advice. Get independent advice before entering an agreement.