Author and Publication
Author: Ben Slater, Registered Social Worker, Founder and Managing Director of Nellie Supports
Reviewed by: Kerry Slater, Director of Operations
Last reviewed: 20 July 2026
Citation
1. Department of Health and Social Care (2022) National Framework for NHS Continuing Healthcare and NHS-funded Nursing Care. Available at: https://www.gov.uk/government/publications/national-framework-for-nhs-continuing-healthcare-and-nhs-funded-nursing-care
2. Care Act 2014, c. 23. Available at: https://www.legislation.gov.uk/ukpga/2014/23/contents
3. Department of Health and Social Care. Care and support statutory guidance. Available at: https://www.gov.uk/government/publications/care-act-statutory-guidance
4. The Care and Support (Charging and Assessment of Resources) Regulations 2014, SI 2014/2672.
Copywright
Copyright © 2026 Nellie Supports Ltd. All rights reserved.
This article is made available for general information, education and professional reference. It may be downloaded, printed and shared for non-commercial purposes, provided that it is reproduced in full, is not altered in any way, and is properly cited as the work of Nellie Supports Ltd. This material must not be edited, adapted, sold, republished, incorporated into commercial products, or used for commercial training, assessment, report-writing or advisory services without prior written permission from Nellie Supports Ltd.
This article does not constitute legal advice, clinical advice or a substitute for a decision-specific professional assessment. Where legislation, government guidance, court forms or external professional materials are referred to, those materials remain subject to their own copyright, licensing and re-use terms.
Abstract
This guide explains deferred payment agreements and how they interact with NHS Continuing Healthcare. It covers what a deferred payment is, the circumstances in which a local authority must or may offer one, the interest and fees involved, what happens when the agreement ends, the effect of a later NHS Continuing Healthcare award, and why independent financial advice is essential.
Deferred payment agreements and NHS Continuing Healthcare
A deferred payment agreement lets a local authority pay care fees now and recover them later from the property. It avoids a forced sale, and it is a loan, which is the part families sometimes do not fully register at the outset.
What it is
An arrangement under which the local authority pays some or all of a person's care home fees, and the amount is repaid later, usually when the property is sold or from the estate. The debt is secured against the property. It converts an immediate cash problem into a future liability, which for many families is exactly what is needed.
When it is available
Local authorities must offer a deferred payment in certain circumstances, broadly where a person is in a care home, has a property that is not disregarded, and has other capital below the relevant threshold. They also have discretion to offer one more widely. Ask the local authority to confirm which basis applies in your case.
Interest and fees
Interest is charged on the deferred amount, and authorities may also charge administrative and legal fees for setting up and running the agreement. Rates are set nationally rather than locally in most respects, but the total cost over several years can be significant. Ask for a written illustration before signing anything.
What happens when it ends
The agreement typically ends when the person dies, when the property is sold, or when the person chooses to end it. At that point the deferred amount plus interest and fees becomes repayable. Where it is repaid from the estate, that reduces what beneficiaries receive, which is worth discussing openly with family beforehand.
The CHC question comes first
This is the practical point. If the person is eligible for NHS Continuing Healthcare, there is no financial assessment and no charge, so no deferred payment is needed. Entering into an agreement before the eligibility question has been considered can mean accruing a debt against the property unnecessarily.
If CHC is awarded later
Where a person is later found eligible, the charging position should be revisited from the date eligibility took effect. Amounts deferred in respect of a period covered by NHS funding should not remain payable. Raise this explicitly with both the local authority and the Integrated Care Board, since it will not necessarily be picked up automatically.
Key takeaway
A deferred payment is a loan secured against the property, with interest and fees. Establish the NHS Continuing Healthcare position before entering one, take independent financial advice, and revisit the position if eligibility is later established.
Add a Title
Add paragraph text. Click “Edit Text” to update the font, size and more. To change and reuse text themes, go to Site Styles.
Add a Title
Add paragraph text. Click “Edit Text” to update the font, size and more. To change and reuse text themes, go to Site Styles.
Frequently asked questions
Is a deferred payment a loan?
In effect yes. The local authority pays care fees and the amount, plus interest and fees, is repaid later, usually on sale of the property or from the estate. The debt is secured against the property.
Does interest get charged?
Yes, on the deferred amount, and authorities may also charge administrative and legal fees. Ask for a written illustration of the total cost over the likely period before signing.
Should we check CHC first?
Yes. If the person is eligible there is no financial assessment and no charge, so no deferred payment is needed. Entering one first can mean accruing a debt against the property unnecessarily.
Related NHS Continuing Healthcare pages
These links take you to the most relevant Nellie Supports service page and to the supporting guides that explain the surrounding process.
Speak to an independent CHC specialist
Nellie Supports prepares independent needs evidence for NHS Continuing Healthcare assessments, reviews and appeals across England and Wales. Our reports are written by registered social workers on a permanent employed team, with internal peer review before release. Call 0333 987 5118 or send an enquiry and we will talk through where you are in the process.