Housing market slump hits residential care funding

The government should consider forcing councils to offer interest- free loans to people unable to sell their homes to pay for care.

That was the message from Pauline Thompson, Age Concern’s policy adviser on social care, who told Community Care that the charity was receiving calls from increasing numbers of people who were being refused access to deferred- payment schemes.

Interest free loans

Under the Health and Social Care Act 2001, councils can offer interest-free loans to fund people in residential care whose ownership of a house makes them ineligible for state funding but who are unable to sell their homes to fund their care. The loans are recovered on the sale of the property.

However, Thompson said the recession in the housing market meant councils were receiving more requests and were having to ration access to deferred payments to protect their budgets, forcing care home residents to run down their savings.

“There needs to be consideration of whether it should be made mandatory,” she said. “But there would have to be funding for councils to go with it.”


Chris Ardill, advice line manager at the Relatives and Residents Association, said the charity had not yet seen any evidence of increased difficulties for residents in obtaining a deferred payment but he was concerned that this may happen because of the downturn.

A Local Government Association spokesperson said it did not have any figures on access to schemes, but added: “It’s one of those demands on councils that are increasing because of the recession.”

Following a question from Thompson on the issue at a Local Government Association conference on adult care last week, care services minister Phil Hope said he “would like to see more councils responding positively” to deferred payment requests. He later said any long-term reforms would have to await the forthcoming green paper on the future funding of adult care.

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