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Families in Essex owe councils more than £11 million in care home bills – to be paid back by selling their loved ones’ properties.
The number of Deferred Payment Agreements, or DPAs, that are outstanding have nearly tripled in Essex. A DPA is an arrangement where the local authority pays care fees and the individual can delay repaying until they sell their home or when they pass away.
The Government has vowed to announce a plan for social care and had promised in its 2019 manifesto that no-body needing care should be forced to sell their home to pay for it. Currently, people have to fund their own care if they have over £23,250 worth of assets – unless they qualify for medical care.
The figures do not cover everyone who has sold their home to cover care costs. A 2001 Department of Health survey showed 30 per cent of self-funders had sold their home before entering residential care. DPAs cover cases where people have delayed repayment of costs and the sale of the home.
The number of DPAs outstanding has nearly tripled in the area controlled by Essex County Council (ECC) from around 95 at the same date in 2019 to 265 in March 2020.
The amount owed has dropped slightly from £11.9 million to £11.1 million. This may be because all of the DPAs are loan-style, with the customer paying the care provider for their care and the LA loaning them the cost of care in instalments.
Around 80 new DPAs were agreed in Essex – used as a bridging loan to pay care home costs while the home was sold.
A spokesperson for ECC said: “Essex has a well-established Deferred Payment Agreement (DPA) scheme, which it operates across the county for all those eligible.
“With such a scheme, we expect to see fluctuations in the numbers of DPAs from time to time, and the size of the debt associated with them. The scheme operates in line with the relevant statutory provisions and all debt is secured and regularly monitored to ensure sustainability and repayment.”
Caroline Abrahams, charity director at Age UK said DPAs are only available if the person’s capital – excluding the value of their home – has run down to £23,250.
Before that people will have to pay for care from other assets such as savings.
She said: “If older people have to exhaust their savings before they are eligible for a deferred payment they may well feel reality is failing to live up to rhetoric.
“For many years we have been highlighting the unfairness in expecting individuals to save for their own care and even sell their homes to pay for it.
“We need a national, Government backed scheme instead that we all contribute to throughout our lives and that means decent care will be there for us if we need it in old age.
“Until the Government fulfils the Prime Minister’s promise, too many older people are doomed to go on suffering and seeing their hard-earned savings dwindle away to nothing. This is no way to treat an older population which helped to build the country we see today, some of whom put their lives on their line by fighting for it too.
“The Prime Minister quite rightly promised everyone ‘decency and security’ in old age and we think he is honour bound to follow through.”
Across England, 6,575 DPAs were outstanding at the end of March 2020, with a value of £231.4 million, compared to 6,380 DPAs worth £213.4 million at the end of March 2019.
There were 3,415 new DPAs agreed across England in 2019/20, up from 3,300 new DPAs in 2018/19. In 2019/20, £79.5 million was recovered from 3,145 DPAs that ended during the year.
A report by charity Independent Age in 2019 found a “postcode lottery” for people applying for the scheme – some areas accepted all applications, while some had accepted none.
Morgan Vine, head of policy and influencing at Independent Age, said: “Through our helpline service, we continue to hear of people not being informed of the deferred payments option when being assessed as needing residential care and then thinking their property needs to be sold.
“We have heard of instances where people were not given the deferred payments agreement paperwork once it is in place, as well as being put off by the interest and administration charges.
“To prevent people dealing with the disruption of selling their home to pay for care within their lifetime, Independent Age believes deferred payment agreements need to be administered properly and consistently and this can only be achieved by local authorities receiving adequate funding from the national Government.”
She said reform of how social care is paid for is needed to reduce the ‘unacceptable burden’ that falls on so many older people and their families.
She added that proposals are needed to clarify and simplify what people are entitled to, improve access so care needs are met, support essential family carers, and pay professional carers more while developing a clear workforce strategy.
The Department of Health and Social Care said it is committed to providing the opportunity for people to take up DPAs and where necessary, it considers what can be done to raise awareness and understanding of the deferred payment scheme.
A spokesperson said: “We recognise how difficult the pandemic has been for people living in care homes, and we continue to do all we can to support those affected and their families.
“A deferred payment agreement can provide additional flexibility for when and how someone pays for their care and support.”