What financial support is available to me?

A funding sign placed in front of coins stacked into towers.

In some instances, it may be possible to have part of the care home fees paid for by your local authority. However, it is usually the case that the fees paid by your LA would not cover the full weekly fee to live in a well-appointed care home. The amount the LA would contribute depends on several factors, some of which are outlined below:

LA Funding:

If you have income and capital (savings or property ownership) less the threshold amounts set by Government for the part of the UK in which you live, and your need for a care home placement has been confirmed by a LA assessment, the LA will pay us a fee on your behalf. As part of this assessment, the LA may determine that you will also need to contribute an amount towards your care fees. This is known as a client contribution.

The amount a LA is willing to pay towards the cost of your care may not be sufficient to cover the weekly fee, therefore a third party will need to top-up the fee for you, usually a family member or friend.

Funded Nursing Care (FNC)

If your care needs are assessed and you require nursing care, your overall weekly fee will increase to cover these care needs. However, you may be entitled to FNC which the local integrated Care Board (part of the NHS) may pay for. If this payment is agreed by your ICB, the ICB pays FNC directly to the home.

Continuing Healthcare (CHC)

Where your condition is such that you have a primary health need, you should be assessed as eligible for NHS CHC funding. If you are eligible for CHC, the NHS (via the ICB) pays a fee direct to the home which reflects what the ICB commissioner considers to be an appropriate fee for meeting your assessed needs.

However, the NHS will only pay towards your assessed care needs, it will not ordinarily fund a resident’s choice to live in an attractive, comfortable and well-resourced home. This is your individual choice and consequently there may be a gap between the CHC funding and the cost of weekly care. This difference remains payable by you as it is regarded as a non-refundable lifestyle choice. It can of course be paid by a third party, such as a member of your family or a friend.

What would happen if my circumstances changed?

If there is a change in your care needs, our staff will try to be as helpful as they can in assisting with progressing applications with the ICB or LA regarding possible funding. However, it will be your responsibility to initiate any conversations with the ICB or LA regarding possible funding for you or your loved one.

Where there is a proposal that a resident’s funding status may change, either by the provision of CHC or LA funding the Registered Manager must be informed promptly to ensure everyone is aware of the situation and the correct funding is in place and being paid. In the case where funds are due to be fully depleted, the Manager should be informed at least 6 months beforehand.

There is often a delay between the date that funding is awarded, and the Home receives funds. One you, your family member or persona authorized to make decision on your behalf has been made aware of the outcome by ICB, you should inform the Home as soon as possible to ensure that the correct parties are begin billed.

It is important to note that during the application state the residents’ full weekly fee still remains payable. Application for funding can take time. Occasionally, the ICB will agree to backdate funding if appropriate, but not always. Even if the funding is backdated, it may not cover the full weekly fee.

If as a result of you paying fees over time, your assets fall below the relevant national thresholds, then the LA will ordinarily pay a level of fee, but a third party could be required to supplement the fee if the LA fee is below the rate of the Home. The top-up fee would need to be agreed with LA.

What is a Deferred Payment Agreement and how does it work?

If your loved one is looking at moving into a care home, and most of their money is tied up in their home, the local council could offer a Deferred Payment Agreement. 

Introduced by the Government in 2015, a Deferred Payment Agreement (DPA) is a legal, financial arrangement between a homeowner and their local authority. It allows an individual to defer paying for their care services until a later date – usually until after their passing or until financial circumstances have changed. 

It protects an individual’s assets, whilst allowing them to manage the costs of residential, dementia or nursing care.

They are bound to specific rules and regulations which can vary depending on your local authority. It’s worth doing some research into your council’s eligibility criteria and any other terms before deciding on a Deferred Payment Agreement, and it’s always valuable to seek advice from financial and legal professionals before committing to anything.

Who is eligible for a Deferred Payment Agreement?

To be eligible for a Deferred Payment Agreement, there is a list of criteria you must meet in order to be considered.

First and foremost, your local authority must agree that you need to be in a care home rather than remaining in your own home. It might be that you’d benefit from round-the-clock care, or from being somewhere with a better quality of life, like you’d expect in a Barchester care home.

If you’re deemed eligible from a care perspective – following a needs assessment – the council will then take a look at your assets. You must be a homeowner or have another asset with which the local council can use as security to be considered for a DPA. The value of your home will be taken into account in deciding what you should pay for your care home fees,and is worked out in accordance with whether or not you have a partner or dependent living in the home.

f you do own a home, you must then have savings and capital of less than £23,250 if you live in England, £18,500 in Scotland, and £50,000 in Wales. This isn’t including your share of the value of your home. 

At the time of writing, from October 2025 the government has proposed a change to the social care cap. This means that anyone in England will not need to spend more than £86,000 on their personal care over their lifetime. This could affect how much you’re expected to pay. However, please ensure to check the government website for the most up-to-date information about the proposed cap.

It’s also important to note that you must have enough equity in your home to cover at least 12 months of care costs, and that there is a responsible person willing to keep your property in a good condition, to avoid it depreciating in value.

If you meet all of the eligibility criteria, your local authority can then discuss the option of a Deferred Payment Agreement with you. It’s worth noting that some mortgage lenders won’t let you take out another loan secured on your home, so you should always check the terms and conditions of your lender.

When should you use a Deferred Payment Agreement?

A DPA is most commonly used when someone’s savings are low, but the value of their home is taking them over the threshold for paying for care costs. It means that they can keep their home and use the money which is tied up in its value to pay for weekly care costs.

It’s great for people who don’t want to sell their home straight away, or can’t sell their home. It’s worth noting that if your partner, a dependent child, a relative aged over 60, or someone who is sick or disabled still lives in your home, it won’t be counted as part of your assets. 

This means that you won’t have to use the wealth tied up in your home to pay for care, and therefore won’t need to organise a DPA.

When does a Deferred Payment Agreement end?

Deferred Payment Agreements tend to end once the person who has taken out the agreement has passed away, or if the person chooses to sell their home at a later date. 

If someone chooses to sell their home, the money owed on the DPA including interest and admin charges must be repaid. If the individual dies, the executor of the person’s will is responsible for paying the amount owing.

Costs involved in a Deferred Payment Agreement

There are a number of additional costs that can come with taking out a Deferred Payment Agreement, ranging from council fees to interest charges.

Legal fees and administration costs

Depending on your local authority, there may be administration fees charged. These can cover everything from home valuations, Land Registry fees and legal fees.

The local council fees must be reasonable and not exceed their costs, and they must make a list of these charges publicly available.

You can choose to defer your legal and administration costs too, although most councils will charge interest on any deferred payments of costs – usually at the same interest rate as your Deferred Payment Agreement.

Interest charges

Interest charges are also something to bear in mind. Your local council doesn’t have to charge interest, but they might choose to. This isn’t fixed and can change as often as every six months. However, councils cannot set the interest charges above a government-approved standard rate, plus 0.15%. This is applicable in England and Wales.

In Scotland, there are no interest charges during the Deferred Payment Agreement, but interest can be charged when the agreement is terminated by the individual or from 56 days after their death. Again, this rate is set by the local council and must be a ‘reasonable rate’.

If the money isn’t repaid on time at the end of the agreement, the local council might charge extra interest until the debt is settled. There might also be an ongoing administrative fee plus interest.

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