If you move into a retirement home and most of your money is spent in your home, your local authority can offer you a deferred payment contract. The most common situation in which you should consider a deferred payment contract is when your savings and other assets (excluding your home) are low, but the value of your home makes you cross the payment threshold for some or all of your own care home costs themselves. A deferral of payment means that you do not have to sell your home during your lifetime to pay the care costs. In accordance with the rules of the Care Act 2014, which apply only in England, your local authority must allow you to withhold a minimum of income each week if you enter into a deferred payment contract. Funding for basic care varies from country to country. Paying the home fees is complex and depends on many things that are unique to you. Only in England, if you have a deferred payment contract, must your local authority take into account the cost of receiving your home when deciding how much you must pay for your care costs. For more information on the impact of your income on payment deferrals, please refer to: In Northern Ireland, there is no formal system for deferral payment. But it might still be available – ask your local care and social care company. In Scotland, there is no interest charge as long as you have the deferred payment contract. Interest is only collected if the contract is terminated by the person or from 56 days after death. Interest should then be collected at a “reasonable rate” set by the local authority. If your partner, dependent child, parent over 60 or someone who is sick or disabled still lives in your home, that is not part of your estate.
So you don`t need to use the property that is attached to your home for care and you don`t need a deferred payment contract. From this you should deduct interest and fees for the deferred payment system, the maintenance and insurance costs of the home and the fees for each owner you use. You should ask your local authority about the impact of your income on your deferred payment contract. A deferral payment contract is an agreement with the local authority that allows people to use the value of their homes to pay the cost of care homes. A deferred payment system takes effect after being in a retirement home for 12 weeks or more. This is due to the fact that the local authority should help fund your care and ignore the value of your property for the first 12 weeks. Short-term stays in nursing homes are not covered by the system. A deferred payment contract works in the same way as a share release system from a commercial supplier. You can compare this to see what`s right for you. As a general rule, the municipality ensures that the money you owe in care costs is reimbursed by a legal charge of your property. The implementation of a deferral of payment should not last more than 12 weeks.
The value of your home is ignored for the first 12 weeks after moving into care. The agreement should therefore be ready for the time you start participating in the fees. Renting your property can give you extra income to pay your fees. But there are a few things to keep in mind before you do so: You should also keep in mind that after 18 months of renting your property, there would be a “paying asset” for capital gains tax purposes if you sell it later. The money you owe in the deferred payment contract, including interest and administrative costs, must be refunded when you sell your home. As a general rule, the municipality ensures that the money you owe in care costs is reimbursed by a legal charge of your property. This involves contacting the land registry in order to collect the tax. The tax is waived when the debt is repayed. Your municipality may (but should not) charge interest on deferred payments to cover the costs. You can choose to contribute