Will Essex Council £10 million care debt impact on Harlow residents?

Politics / Fri 2nd Nov 2018 at 06:17pm

A £10.1 million debt incurred by Essex County Council (ECC) to help people keep properties worth as much as £3 million while paying for care home bills is the country’s largest.

Families in Essex have racked up a £13 million care bill that will have to be paid back by selling their loved ones’ properties.

Of that total, ECC has a debt pile of £10.1 million incurred from deferred payment agreements introduced in 2015 to enable people to use the value of their homes to help pay for care home costs.

In it ECC help to pay the care home bills and the individual can delay repaying until they sell their home or die.

In Essex there were 105 deferred payment agreements (DPA) as of March 31, 2018.

However the debt is growing. As of June 25, ECC had 322 deferred payments.

The year before, in March 2017, there were 295 DPAs.

Last year, around 25 DPAs ended, with ECC recovering about £2.3m for care home bills from property that had to be sold, an average of £92,000 per DPA.

With care home fees costing up to £1,000 a week, many families are seeing the value of their inheritance plummet as the potential bill to repay the council grows rapidly.

This most expensive property the council took as security against care home fees in 2017/2018 was worth £3m.

Councillor Stephen Robinson said: “We have to have a complete review of the way social care is funded.

“Local government is in crisis and the Conservative government refuses to recognise the depth of the crisis and they are not taking action at a national level, which they could be doing.

“And they are trying to palm off responsibilities to local councils while at the same time removing grants to local councils.

“Local authorities are caught in this awful situation. They are not allowed to raise council tax but grants are going down.”

Figures suggest that some of these people are asset rich but cash poor.

This is another function of our housing crisis – there are lot of older people who would like to downsize but they do not feel there is appropriate accommodation for them to move into.

The Government gave everyone the right to defer paying care home fees from April 2015.

It intended for people to be able to defer their care fees for their lifetime and pay from their estate, providing more time for decisions and choice and peace of mind over how people use their home – for example, so that a relative or tenant can live there.

People have to fund their own care if they have over £23,250 worth of assets, unless they qualify for medical care.

Under a DPA, you cannot usually use more than 90 per cent of the value of your home to pay for fees (to allow for costs involved in selling the property), although local authorities may set a limit between 70 per cent and 80 per cent.

Councils can charge a set-up fee for the arrangement, and also charge interest on the loan, set at a national rate.

Across England, 6,335 DPAs were outstanding at the end of March 2018, with a value of £193m, compared to 6,440 DPAs worth £176m at the end of March 2017.

A spokesman for Essex County Council said: “Essex has a well-established 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.”

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