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Home Finance Deferred payment agreement numbers barely scratch surface of real need

Deferred payment agreement numbers barely scratch surface of real need

by uma
  • A deferred payment agreement is an arrangement with the local council that lets people use the value of their homes to help pay care home costs. It means they do not need to sell their home during their lifetime to meet care costs.
  • To qualify you must live in a care home and the value of your assets (excluding your home) must be less than the upper means tested limit -currently £23,250 in England.
  • 2,645 new DPAs were agreed during 2021/2022 at a value of £44.6m
  •  Last year there were 2,605 new DPAs at a value of £47m.
  • As of March 31 2022 there were 6,865 DPAs outstanding at a value of £262.7m.

NHS Digital has released information on Deferred Payment Agreements for 2021/22.

Deferred Payment Agreements 2021-22 – NHS Digital

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown:

“Deferred payment agreements (DPAs) can really help families struggling to pay for care who are not able to sell the family home – or who cannot bring themselves to do so. Yet only a tiny number of people use them. Recent estimates from the ONS put the number of self-funders in England at just under 126,000 – not all these people will be struggling but the likelihood is that there are many more people who could make use of a DPA and the current figure of 6,865 barely scratches the surface.

Paying for care is enormously expensive, especially if a loved one needs it long term and this can put a huge financial strain on families. Changes to social care were due to come in next year with a social care cap of £86,000 from October 2023. However, recent reports suggest the Chancellor is considering a delay to these reforms and the Health and Social Care levy that was introduced to help pay for it has already been axed.

For families struggling now October 2023 already feels like a very long way away and the prospect of any further delay will be hugely concerning. Even with a cap of £86,000 many will continue to pay huge bills, but any decrease would be welcomed.

There are reasons why so few people currently use DPAs – for instance, the local authority needs to have agreed you need to go into a care home on a long-term basis and you need to have assets below a certain threshold to use one. You also cannot use one if there is a dependant such as a partner still living in your home.

When the levy was initially announced then-health secretary Sajid Javid said that government would make sure everyone will be able to access one of these agreements in future so some of these barriers could have been overcome and we could have seen increased use. However, it remains to be seen if the reforms survive enabling more people to access these arrangements.”