The End for the Deferred Payments Scheme?
Is the Deferred Payments Scheme to cease with care providers being asked to pick up the cost of funding those whose property has not yet sold? Rumours about the activities of a local authority in the east of England suggest this may be the case.
We understand that an authority in eastern England has been telephoning care homes stating that the deferred scheme will no longer be offered and asking if they will be prepared to defer their fees until the property is sold.
Clever
The DPS costs councils a lot of money. Although this is a loan and the money is returned, it is interest free and ties up limited resources.
This is a clever arrangement by the authority concerned. They have a legal obligation to consider people for the DPS but would have no reason to do this if care homes did not ask for payment during the period the DPS would otherwise apply.
Risk
Before agreeing to such an arrangement care providers need to think carefully about the risks involved. They could effectively find themselves as unsecured lenders with debts of tens of thousands of pounds. What happens if the property has not sold after 18 months or if the person in care dies and the family refuse to sell the property? Are care providers able to charge interest to at least offset the overdraft costs they are likely to incur and can they charge extra to cover bad debt and legal costs?
Other Solutions
The DPS is ideal when offered because it is relatively low cost to set up and interest free, providing the loan is repaid promptly after the property sale or death. In cases where the DPS is not available we have access to funds that can be lent against a property. These are subject to the property being acceptable and on the market as well as the usual financial checks. Please ask for details.
Request our literature for your care home here
Your experience
We are keen to establish whether the incident above is a one-off or whether other care providers have had similar experiences and with which authorities. Please enter your experiences or comments below.
Posted in The carefeesadvice Blog
3 responses to 'The End for the Deferred Payments Scheme?'
Raju kanabar
Added 09-Jan-2012 09:00
DPS is a double edged sword, as homes do loose out when councils get involved. We have private residents who would be paying higher fees than funded residents, if they run out of money and DPS is awarded, the council invariably reduces the fees to thier rates, our argument has always been that there is a contract with the home and the council must pay the private rate.
In many cases they have refused to do that even if they get all the money back, and obviously the family would be delighted.
If DPS is removed, we always got a solicitors undertaking to pay the fees from the residents or the estate when the property is sold with an interest rate agreed in advance. Of course there is a risk to the operator but it protects the fees .
dolly
Added 16-Apr-2012 08:38
I live in east sussex area. it would have been nice to have even been offered a deffered payment sheme in the first place, in this area if you have a property you have to sell straight away so you can pay your own fees, that makes you self funding, there fore you pay for every thing, nice scam
J Lloyd
Added 06-Jan-2012 10:30
I’m based in Essex and had a call from my council asking if my home would do this. I don’t see how we can - we still have to pay the staff, council tax, heating etc.
They told me that most homes had agreed. Is this true?