How does a DPA work?
Security
A DPA is a legal charge secured against your home. In order to progress with a DPA your home will need to be registered with the Land Registry. If your home is not registered with the Land Registry, your own solicitor will need to register it. The council may at its discretion accept other forms of security, and will consider each case on its merits.
Before we can agree to a DPA you, or your legal representative, must sign certain legal documents:
- The DPA legal agreement confirms the terms and conditions of the DPA
- The DPA legal charge form agrees to our placing a legal charge on your home to secure your debt.
You, or your legal representative will also need to sign various Land Registry forms to register the charge.
Where the property is jointly owned, all owners’ must consent to the charge. Similarly, where someone else has a beneficial interest in the property, their consent will be required.
How much can you defer?
The amount you can defer will depend on the value of your home. This will determine your ‘equity limit’, which will be calculated using the following formula:
Value of the property
- Less 10%
- Less the lower threshold set by the Department of Health and Social Care (for 2019-20 this is £14,250, which is reviewed annually)
- Less any other charges on the property.
To determine the value of your home, we will obtain a valuation, the cost of which will be added to the deferred amount, unless you have agreed to pay this separately. You may also, if you wish, obtain your own independent valuation.
In considering a request for a discretionary DPA, e.g. to help pay for care in a more expensive setting. The council will consider with you the sustainability of the proposed arrangement, that is, how long you would be able to defer your care costs for.
Repaying the DPA
The DPA can be ended in three ways:
- By selling your home and repaying the council the amount due
- By you, or someone acting on your behalf, repaying the full amount due
- In the event of your death the amount is repaid from your estate.
On termination, the full amount due (including care costs, interest accrued and any fees added to the deferred amount) must be paid to the council. In the case of payment from your estate, responsibility for arranging repayment will fall to your executor.
While the DPA is in place
We will:
- Provide you with a statement every six months (or on 28 days’ notice), showing your progress towards the equity limit, including any interest or fees to be deferred
- Reassess the value of the security when you reach 50% of the equity limit
- Review the arrangement with you, if the amount deferred reaches 70% of the equity limit.
You must:
- If you are contributing to the cost of your care, tell us of any changes in your income or savings/capital
- Tell us if your care and support needs change in a way that means you may no longer be eligible for deferred payments
- Tell us if a change in circumstances means that your home should be disregarded in your financial assessment
- Make appropriate arrangements to insure and maintain your home, and provide us with details of costs - these will be taken into account in your financial assessment
- Obtain our consent for anyone to move into the property
- Tell us if you intend to sell the property and when it is sold
- Tell us if you, or someone acting on your behalf, intend to repay the full amount due.