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Money Management

Deferred Payment Scheme

What is The Deferred Payment Agreement (DPA)

The DPA is designed to help you if you have been assessed as having to pay the full cost of your residential care or extra care placement - but you cannot afford to pay the full weekly charge because most of your capital is tied up in your home.

The DPA offers you a loan from Hull City Council using your home a security. It doesn’t work in exactly the same way as a conventional loan; the council does not give you a fixed sum of money when you join the Agreement, but instead pays an agreed part of your weekly care and support bill for as long as necessary.

How does a DPA work?

You will pay a weekly contribution towards your care that you have been assessed as being able to pay from your income and savings. The council pays the part of your weekly charge that you cannot afford until the money tied up in your home becomes available. The part the council pays is your ‘deferred payment’.

The deferred payment builds up a debt, which is cleared when the money tied up in your home is released. For many people this will be done by selling their home, either immediately or later on. You can also pay the debt back from another source if you want to. However, you do not have to sell your home if you do not want to. You may, for example, decide to keep your home for the rest of your life and repay out of your estate, or you may want to rent it to generate income. If you do this you will be expected to use the rental income to increase the amount you pay each week, thus reducing the weekly payments made by the council and therefore minimizing the eventual deferred payment debt.

In most cases the property is not taken into account for the initial 12 weeks of entering permanent residential / nursing care / extra care in a registered care home or extra care facility

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