Can somebody just explain to me how a DPA works operationally, over its life time ?
Hi Greyone, I am going through the process at the moment with my LA. Other LA's may vary but I imagine the process is the same.
The LA value the property, it doesn't have to be exact, they take off 10% and £14250.
They will agree with you a weekly amount that they will pay towards CH fees minus the normal pensions/benefits. It could be the whole amount (it doesn't have to be), including top ups but it will be decided on each case depending on the value, the costs, life expectancy etc. They can also increase the Personal Expenses Allowance up to around £144/week if you wish This is for insurance/maintenance costs on the property. Part of the agreement is that the property is insured and maintained.
There are set up costs as legal documents with the land registry are amended to show the LA have a charge on it. This will show up to any anyone who wants to buy the house whilst the agreement is in place. You may also have to pay for a letter from the GP regarding capacity. All those other tests that have been done don't count.
Any other set up charges including any interest charges which is fixed for the duration will be clearly set out in the documents you sign. You may be lucky and find your LA like mine have yet to set any charges. This again is fixed and cannot change. The LA are not supposed to profit from the agreement.
The LA, if they haven't already, contract with the CH and pay the agreed amount. Obviously depending on what you opt for there may still be top ups to pay.
My LA send me a quarterly invoice/update showing how much they have paid/how much is owed.
Hopefully your Mother will have many more years left. As the amount reaches the agreed total the LA should be in touch to see what your plans are then.
The money becomes repayable on death or sale of the property. You can repay the money from any source, you do not have to sell the property. You can terminate the agreement at any time and pay off the debt.
The documentation is very "legal" so you may wish to consult a solicitor and if there is interest you may also want to speak to a financial advisor.
Hope that helps.