What will it cost?
Arrangement fees
You will need to meet the costs incurred by the council in setting up the DPA. For 2019-20, there is a fee of £595. In addition to this, you will need to pay certain disbursements:
- Valuation (and, where required, re-valuation) fees
- Land Registry charges and associated costs
These costs will normally be added to the deferred amount, unless you have asked to pay them separately. You will also need to budget for the costs of your own legal representation eg solicitor.
Interest
Interest will be charged on the deferred amount on a compound basis, until the debt is repaid. The current rate of interest is 1.45%. The rate is normally reviewed every six months, in January and July. Interest will continue to accrue even when the equity limit has been reached.
Attendance Allowance
An advantage of a DPA is that you can claim Attendance Allowance, (or, if you are under 60, the care component of Disability Living Allowance) while you are in residential care. This means that you will have extra income to contribute towards the weekly cost of your care, which will help reduce your progress towards the equity limit.
Effect on financial assessment
While a DPA is in place, the maximum ‘disposable income allowance’ used in your financial assessment will be £144 per week, although you may choose to keep a lower amount, if you wish.