The deferred payment contract is in all respects a loan contract, because as soon as the payments are deferred, the person is responsible for the local authority and interest is on the money owed. As such, the agreement must clearly define all the conditions and information necessary to enable the person to determine his or her rights and obligations under the contract before it is concluded. This includes using our guide to start these difficult discussions about care options – we look at how to approach the topic and develop conversation tactfully. If someone lives with you, who must stay there (and must stay long term), you cannot bear a deferral of payment. These include spouses, children and other relatives. If you have already completed a capital release program, you cannot use a deferred payment system. Choosing the type of funding for nursing homes is one of the most stressful for individuals and their loved ones seeking care, especially those who have the money immediately. The use of a deferral payment system to support care home costs does not necessarily entail additional costs. When a deferred payment agreement is reached, the local authority generally insures its interests by listing a land registry tax on the person`s property for an amount known as Equity Limit. You will then defer all payments until this amount is reached or until the agreement is terminated, depending on what happens in the first place. It is on this date that the person`s home is sold and the municipality receives payment for the care costs it has deferred as part of the agreement.

Look at our self-financing of your long-term care, your options guide to learn more. The amount of interest (if any) can of course affect your decision to use a deferral payment system as a method of covering or subsidizing your care home expenses. Before you can apply for a deferred payment contract, you must be admitted to home care or already in a care home by your local authority. To calculate the capital limit, the local authority must receive a real estate valuation, then deduct 10% and then deduct the lowest financial limit. This allows for some variations in the market over time and ensures that the person keeps some of the equity in their home. It is a legally binding agreement with the Council that the money be repaid when the house is sold. The municipality will probably ask the land registry to take legal action on the ground. The tax is stolen if the unpaid debt is paid.

If you still have a mortgage on your property, you must continue to pay it. Also, if you want to use a deferred payment system, you should discuss this with your lender due to the fact that the local authority will try to take a fee on the property. In the event of the rejection of new deferred payments to a deferred payment contract, the local authority should allow at least 30 days to stop the additional deferrals; and should give the person an indication of how their care costs will have to be covered in the future. Depending on the circumstances, the person may either receive assistance from the local authority to cover the cost of his care, or be required to cover his expenses on his income and property.