Rates Deferment Scheme for Pensioners Introduced

A new method of payment which allows pensioners who own and occupy their own homes to defer payment of their rates bills has been introduced.

Pensioners who successfully apply to the scheme can put off paying their rates until their after their death, until the property is sold or transferred or until the agreement between the pensioner and Land & Property Services (LPS) to pay in this way comes to an end. The scheme will commence on 1 April 2010.

The debt built up by defering payment will be secured against the property and any outstanding rates will have to be paid back with interest.

The eligibility criteria for the scheme means that applicants must:

• be aged 60 or over  on 1 April 2010. This will increase in line with changes to pensionable age
• own their own home and occupy it as their sole or main residence
• have enough equity in their home - at least 40 per cent.
• have a capital value on their property of £50,000 or more

Anyone who is interested in using the scheme should fill in an application form and return it to Land and Property Services. The application form will be made available once the scheme is launched on 1st April.

Once your application form has been received and reviewed you will receive an estimate of what postponing your rates will cost in the long term.

If you are happy with that estimate and decide to proceed you will be required to produce evidence to LPS showing ownership of the home, its value and what, if any, mortgage remains outstanding on it. You will have to do this at your own cost, which could be several hundred pounds, as you will need a solicitor to carry out this work. 

Whilst Citizens Advice welcomes all initiatives which aim to assist pensioners we feel that anyone thinking about using this option of payment should only do so after very careful consideration. They should be aware that it is likely that a substantial debt will be created and that this debt will need to be paid . As the sums involved can be very large, this will mean that their family may have to sell their home in order to settle the outstanding amount.

More information about the scheme can be found in a leaflet produced by Land and Property Service, This leaflet can be downloaded at: