22 May 2017

Care costs repayment scheme built on 'shaky foundations'

3 min read

Steve Webb
Royal London



Plans to make greater use of ‘deferred payments’ to claw back social care costs from the value of a family home could fail unless the existing ‘deferred payments’ system is improved.

This is the conclusion of an analysis of 140 replies to Freedom of Information requests sent by Royal London to English local authorities.

Under existing rules, people living in residential care can (in certain circumstances) ask a local authority to meet their care home bills and in return the council will recover the money plus interest from the later sale of a family home. However, FOI replies indicate that the effectiveness of the scheme varies hugely from area to area.

Despite access to a Deferred Payment Agreement being a legal right, ten local authorities told Royal London that they had not entered into a single arrangement since the scheme was introduced in April 2015. By contrast, some local authorities had entered into several hundred agreements with local residents. London local authorities were particularly reluctant to use the scheme with eight London boroughs reporting zero agreements and a further twelve in single figures. One London Borough said that they had ‘received no requests’ to set up such arrangements, suggesting that no efforts were being made to alert residents to their legal right to defer payments.

The local authorities that reported having entered into no Deferred Payments were:

Westminster, Tower Hamlets, Hackney, Kensington & Chelsea, Haringey, Lewisham, Lambeth, Ealing, Blackburn with Darwen and Luton.

The councils who had entered into the most agreements were Southampton City Council with 331, Essex County Council (208) and Middlesborough Council (165).

Commenting on the figures, Steve Webb, Director of Policy at Royal London said:

It is clear that there is already a lottery as to whether people facing significant care costs can exercise their legal right to defer their payments under the existing system. Some local authorities clearly promote the scheme and alert residents to their legal rights whilst others appear not to be doing so. If far more people are going to face deferred charges in future because of the inclusion of the value of family homes in the means-test for social care, the Government will need to investigate very quickly why the present system is not working properly. Otherwise there is a danger of building a new system on very shaky foundations.


Notes to editors

FOI requests were sent to 150 English local authorities with responsibilities for social services in March 2017.   Approximately 140 replies have been received to date.

For further information please contact:

Royal London Press Office

About Royal London:

Royal London is the largest mutual life, pensions and investment company in the UK, with funds under management of £117 billion, 8.8 million policies in force and 3,745 employees. Figures quoted are as at 30 June 2018.