Deferred payment agreements explained
A deferred payment agreement lets someone use the value of their home to pay for care later, without selling it straight away. Here’s how it works, and why it matters less if you choose care at home.
What is a deferred payment agreement?
A deferred payment agreement (DPA) is an arrangement with the council. The council pays some or all of someone’s care home fees, and the money is paid back later, usually when the home is sold or after the person has died.
The loan is secured against the property with a legal charge, so the family doesn’t have to sell the home in a hurry when someone moves into a care home.
Who can get one?
Councils can also offer DPAs in other circumstances at their discretion, so it’s worth asking.
Councils must offer a deferred payment agreement if someone:
- They have been assessed as needing care in a care home
- Their savings and other capital, not counting the home, are below £23,250
- Their home is not disregarded in the financial assessment, for example because a partner or a dependent relative still lives there
Interest and fees
Councils can charge interest on the amount deferred. The government sets a national maximum interest rate, which is reviewed every six months. Councils can also charge administration fees for setting up and running the agreement.
Ask your council for its current rate and fees in writing before you agree to anything, and consider taking independent legal or financial advice.
What this means if you choose care at home
Deferred payment agreements are designed for care home fees. When someone receives care in their own home, the value of that home is not counted in the council’s financial assessment, so the question of selling it doesn’t usually arise.
That is one reason some families choose live-in care: their loved one stays at home, and the house remains theirs. Care is usually paid for from income, savings, benefits and any council or NHS funding.
Some homeowners consider equity release to pay for care at home. It is a big decision with long-term costs, so always speak to an independent, regulated financial adviser first.
Official guidance
- Deferred payment agreements: Care Act statutory guidance, chapter 9 (GOV.UK)
- Paying for care (Age UK)
- Choosing a financial adviser (MoneyHelper)
Last checked 31 October 2026. This guide is general information for England, not financial or legal advice. Medicare People is not a financial adviser. Rules and rates change, so always check the official guidance or speak to an independent, regulated adviser.
Other ways to pay for care
Deferred payment agreements: your questions
What is a deferred payment agreement?
A deferred payment agreement is an arrangement with the council that lets someone pay care home fees now and repay the council later, usually from the sale of their home, either during their lifetime or after their death. It's secured with a legal charge on the property. It means nobody has to sell the home in a hurry to pay for a care home. Councils can charge interest and administration fees, so ask for full details before agreeing.
Who qualifies for a deferred payment agreement?
Councils must offer one to people who need care in a care home, have less than £23,250 in savings and capital not counting the home, and whose home is counted in the financial assessment, for example because no partner or qualifying relative still lives there. Councils can choose to offer deferred payments in other cases too. Your loved one's local council adult social care team can tell you whether they qualify and what the process involves.
Is there interest on a deferred payment agreement?
Yes. Councils can charge interest up to a national maximum rate, which is reviewed every six months, plus administration fees for setting up and running the agreement. The interest builds up over time and is repaid with the deferred fees. Ask your council for its current interest rate and charges, and consider independent financial advice before signing. We can't give financial advice, but we can explain how live-in care costs compare.
Can a deferred payment agreement pay for live-in care?
Usually not. Deferred payment agreements are designed for care home fees, where the value of the home is counted in the financial assessment. When care is provided at home, the home someone lives in is not counted, so the reason for deferring doesn't usually arise. Families paying for live-in care typically use income, savings, Attendance Allowance and, where eligible, council or NHS funding instead.
Will we have to sell the house to pay for live-in care?
Not because of the council's financial assessment. The home someone lives in isn't counted when they receive care at home, so live-in care can help avoid selling the family home. The cost of live-in care still has to be met from income, savings or other funding, so it's worth planning ahead. For many families, keeping the home is one of the main reasons they choose live-in care over a care home.
Is there a 12-week property disregard?
Yes. When someone moves permanently into a care home, the council ignores the value of their former home for the first 12 weeks of the financial assessment. This gives the family time to decide what to do with the property, including whether to apply for a deferred payment agreement. The disregard applies to care homes, not to care at home, where the home isn't counted at all.
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