Consultation on proposals for a new Deferred Payment Scheme

Closed 26 Jan 2015

Opened 15 Dec 2014


We are currently consulting on proposed changes to the Deferred Payment Scheme.

1. What is a deferred payment?

The deferred payment scheme is designed to help people who are moving into permanent residential or nursing care who have capital to pay for their care which is tied up in their home and is not therefore immediately available.  A deferred payment is a type of loan where the person can put off paying the cost of their care home fees until a later date. The council will pay the care home fees in exchange for a legal charge on the person’s property.

2. Who can have a deferred payment?

The universal deferred payment rules state that if a person meets all three of the following criteria at the time of applying for a deferred payment, they must be offered a deferred payment agreement:

  1. the person is assessed as having eligible needs which the council decides should be met through a  care home placement;
  2. the person is assessed as having less than or equal to £23,250 in savings and other capital; and
  3. the property would not be disregarded for charging purposes

If the person meets the above criteria and is able to provide adequate security for the debt, usually in the form of a land registry charge on their property, the council must offer a deferred payment.

3. Permission to refuse a deferred payment agreement

The council may refuse a deferred payment agreement despite someone meeting the eligibility criteria where:

  1. the council is unable to secure a first legal charge on the person’s property;
  2. the person is seeking a top-up and the amount of the top-up does not seem sustainable for the duration of the placement given the amount of equity in the property and/or
  3. the person does not accept the terms and conditions of the agreement.

4. How much can be deferred?

The council may require a contribution from a person’s income, savings or other assets but must leave the person with up to £144 per week if the person wishes to retain this sum. All other costs, including top-ups and extra care costs can be deferred, subject to the level of equity in the property.

5. How much does a deferred payment cost?

From 1 April 2015, the council may charge interest on any amount deferred, where local authorities charge interest, the interest must not exceed the maximum amount specified in regulations. The national maximum interest rate will change every six months on 1st January and 1st of June each year. The first rate will be set on 1st January 2015. In addition to charging interest the council may charge reasonable legal and administrative costs of setting up, maintaining and terminating the deferred payment.

6. What is the consultation about?

The Care Act 2014 is a major new piece of legislation which comes into effect in April 2015. The Act changes the way that people will pay for their care and support needs, including introducing a new Universal Deferred Payment Scheme.

Under current laws local authorities have the discretion to offer a deferred payment scheme but do not have to do so. Under the Care Act 2014 all local authorities will be required to offer the new scheme to those people that are eligible. Deferred payment agreements are designed to help people fund their care without having to sell their home during their lifetime.

Surrey County Council has been using its’ discretionary powers to operate a deferred payment scheme since 2002 and will offer the Universal Deferred Payment Scheme from April 2015. This consultation is seeking views on some of the new discretionary arrangements that the council can make.

7. Who will be affected by the changes?

Anyone, who in the future needs, to move into residential or nursing care who has capital tied up in their home may be eligible for the scheme and could be affected by these proposals.


If you would like this information in easy read, large print, Braille, on tape or in another language, or would like to speak to someone about the questionnaire, please contact us on:

  • Telephone: 0300 200 1005
  • Minicom: 0208 541 9698
  • SMS: 07527 18286.


For further information on our current charging policy and how we charge for community care services, please visit our website




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