What is a Deferred Payment Agreement? A Deferred Payment Agreement (DPA) is offered by local authorities as a way of avoiding a person being forced to sell their home to pay for their care fees. If a DPA is agreed, the local authority will pay a person’s care fees direct to the care home. The care fees are repayable to the local authority, but the date of repayment is deferred. The local authority will apply to enter a charge on the title to the person’s property to secure repayment of the fees. A DPA can be terminated when one of three events occurs – repayment of the sum owed in full at any time or on the sale of the property in question, or following repayment from the service user’s estate following their death. Risks of a Deferred Payment Agreement The DPA is agreed by both parties signing a contact (a legal document) setting out the terms of the agreement. Signing the DPA imposes contractual obligations on the person signing the agreement – this is usually the service user (the person receiving the care), or someone acting on their behalf such as an attorney or deputy for property and financial affairs. There can be significant consequences if the person signing the agreement does not fulfil their obligations – this is called a breach of contract. If a breach of contract occurs, the local authority can choose to stop deferring payments for the service user’s care. This would effectively leave the service user without funding for their care fees and would likely put the continuity of their placement at risk. It is highly recommended to seek independent legal advice prior to signing a DPA to ensure that you are fully aware of your obligations and responsibilities. This is even more crucial if you are signing the agreement as an attorney or deputy for the service user as failure to act in compliance with the terms of the contract could lead to a safeguarding referral being made to the Office of the Public Guardian (OPG) about your conduct. Prior to entering into a DPA, a deputy should also ensure that they the relevant authority from the Court of Protection to agree to a charge being entered on the title to the service user’s property, as otherwise they risk acting in breach of the terms of their deputyship order. The suitability of a DPA depends on an individual’s personal circumstances and it is important to explore any other appropriate options for funding of a person’s care fees. How can Morr & Co help? We will review the DPA and provide you with a letter of advice explaining the meaning of each clause, highlighting your responsibilities and the consequences of non-compliance, and the factors to consider before the agreement is signed. The person signing the DPA will also be required to sign a document facilitating the local authority to apply to enter a charge on the title. This is an important document as the person signing is required to give the local authority a level of assurance about the title history of the property (this is a particular risk if the person giving the assurance is an attorney or deputy who may not have any personal knowledge about the property). We will review this document, explaining the effect of the pertinent sections and noting any suggested amendments required to protect your position. If you would like advice regarding a DPA or would like any further information on the content of this article, please do not hesitate to contact our Court of Protection team on 0333 038 9100 or email info@morrlaw.com and a member of our expert team will get back to you. Disclaimer Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position. Authored by Alice Watkins Associate Solicitor Message Tags Insights On this page Contact our team today to find out more Contact us
