Regulation 5 Deferred amount and equity limitI1

England and Wales

(1)

Subject to paragraph (3), the deferred amount is the sum which is specified or determined in accordance with paragraph (2).

(2)

The sum is—

(a)

The lower of—

(i)

100% of the amount due from the adult under section 14 or, as the case may be, section 30(2) for the provision of care and support in a care home or supported living accommodation, less any amount which the local authority requires the adult to contribute under regulation 6;

(ii)

such lesser part of the amount due under section 14, or as the case may be, section 30(2) as the adult requests, less any amount which the local authority requires the adult to contribute under regulation 6;

(iii)

the amount deferred in accordance with sub-paragraphs (i) or (ii), less any amount which, during the time the agreement is in force and in accordance with the terms and conditions of the agreement, the authority does not agree to defer payment of until the specified time; or

(b)

100% of the loan made for the purpose of assisting the adult to obtain care and support in a care home or, as the case may be, supported living accommodation.

(3)

But—

(a)

the deferred amount and any interest and administration costs which have been treated in the same way as the deferred amount must not exceed the equity limit and the authority must not agree to defer payment of an amount if to do so would exceed the equity limit; unless

(b)

at the relevant time, the deferred amount and any interest and administration costs which have been treated in the same way as the deferred amount exceeds the equity limit, in which case the local authority must defer payment of those amounts if paragraph (4) applies.

(4)

This paragraph applies if the equity limit was not exceeded at the time when payment of an amount due to the authority under section 14 or 30(2) was last deferred or an instalment under the loan agreement was last advanced to the adult.

(5)

The equity limit is 90% of the value of the asset (that is, its current market or surrender value at the relevant time) which the local authority obtains as security for the deferred amount and any interest and administration costs which are to be treated in the same way as the deferred amount, less £14,250 and the amount of any encumbrance secured on it which ranks in priority to the authority’s charge.

(6)

For the purposes of paragraphs (3) and (5), the relevant time is the time that—

(a)

an amount under section 14 or 30(2) is due to the authority; or

(b)

the local authority is due to advance an instalment of the loan to the adult under the loan agreement.

(7)

Any interest and administration costs may continue to be treated in the same way as the deferred amount even after the equity limit is reached.

Annotations

Commencement

I1: Reg. 5 in force at 1.4.2015 in accordance with reg. 1(1)