Councils lay claim to 7,000 family homes to claw back care bills
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Thousands of families are being forced to hand over their estates to councils to pay off care home fees, The Telegraph can reveal.
Cash-strapped local authorities across the country are in line to claim back £343m from care home residents' home sales after they die, NHS data shows.
It comes after Labour scrapped a planned cap on care costs by the Conservatives as part of their pledge to ensure nobody would have to sell their house to pay for care.
Across England last year there were 6,815 outstanding Deferred Payment Agreements (DPAs), which allow homeowners to pay for care by borrowing from the council and using their home as a security.
After they pass away, the council will reclaim the debt either from the house sale or from other assets in their estate.
Some 3,205 families agreed new DPAs last year, up 35pc from the year before.
The loan lets homeowners delay the sale of their house to pay for care. But there are downsides as the cost of care will eat into the family inheritance.
Some local authorities also charge interest as part of the agreement, with the rate capped at 4.25pc as of January 1 this year.
The total debt tied up in DPAs has soared from £237m since 2020, a rise of more than 40pc.
Essex County Council was pursuing the largest amount of debt of any local authority at almost £16m, followed by Lancashire County Council which is set to reclaim nearly £14m from care home residents.
In 2023-24, councils successfully clawed back £90m from 2,295 families – an average debt of almost £40,000.
Mike Padgham, of care provider Saint Cecilia's Care Group, said: 'Councils are cash-strapped and doing everything they can to avoid paying for care. So they are trying to encourage people to go to them and use a deferred payment agreement rather than go to a private provider.'
However, these agreements are increasingly causing disputes between councils and families.
In a recent case, Essex County Council was ordered to pay back over £11,000 in care fees to the family of an elderly man with dementia after the Local Government and Social Care Ombudsman found it had failed to carry out a financial assessment after his funds decreased. This resulted in the care home resident overpaying at a higher self-funding rate for longer.
Mr Padgham said the risk of disputes would 'only increase' as more families find themselves paying for care.
He said: 'We're still in the situation where people are selling their homes to pay for catastrophic care costs.'
Jane Townson, of the membership body the Homecare Association, said: 'DPAs can provide vital financial flexibility for those entering residential care. Families frequently report delays, inconsistent eligibility criteria, and a lack of transparency about costs and repayment terms. These challenges can create unnecessary stress for people at a difficult time in their lives.
'It is crucial that councils administer DPAs fairly, promptly, and with full regard for the needs of individuals requiring care.'
In England, someone in need of care will not be eligible for state funding if they have more than £23,250 in capital. Arranging a DPA with the local council is one way of covering the fees.
The Government has launched an independent commission into reforming adult care amid soaring costs. However, a final report is not due until 2028. Campaigners have criticised successive governments for failing to adequately fund the crumbling sector.
Some have warned that care providers are at risk of collapse due to the Government's National Insurance raid piling on extra staff costs.
A spokesman for the Local Government Association said DPAs helped families manage costs without needing to sell their homes immediately and that councils were committed to 'offering this option sensitively and in discussion with individuals and their families'.
They continued: 'While councils are keen to support people, they also have a responsibility to ensure public funds are managed effectively and that costs can be recouped and DPAs are a valuable tool in balancing these needs.'
Essex County Council was contacted for comment.
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