Deferred Payment Agreement
(DPA)
A Deferred Payment Agreement is a legal arrangement with the local council that allows a person to delay paying care home fees by using the value of their home as security. The council pays the fees and recovers the debt, plus interest, when the property is eventually sold. The council must offer a DPA if the person meets the eligibility criteria under the Care Act 2014.
A Deferred Payment Agreement (DPA) allows a person entering a care home to defer paying their care costs if they own property (or another asset acceptable as security) and their other capital is below £23,250. Under the Care Act 2014, the council must offer a DPA to eligible individuals. The council effectively acts as a lender, paying the care home fees and registering a legal charge on the property. Interest accrues daily at a rate set by the government (currently around 4–5% per year). The debt, plus accrued interest and an administration fee, is repaid when the property is sold — usually on the person's death or earlier sale. A common pitfall is not exploring whether a DPA is available: many families sell property unnecessarily to pay care fees when a DPA would allow the asset to pass to the estate. Get independent financial advice from a specialist regulated by the FCA before deciding.