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When a Deferred Loan may be appropriate

Residential Care Loans assist older people who can't get Residential Care Subsidy to pay for the cost of their care. This is because they still own their home and have limited other assets. Generally, the Loan is repayable within 12 months after the borrower's death. However, in some situations this may not be appropriate, so a Deferred Loan could be an option.

Who can get a Deferred Loan

All of the following criteria need to be met by the person living in the former home for a Deferred Loan to be offered. The person living in the former home must have:

• been living in the former home on a continuous full-time basis for at least 5 years immediately before the borrower went into long-term residential care 
• continued to live in the home while the borrower was in residential care and remained living there after the borrower's death 
• inherited the home or an interest in it, taken it by survivorship or been left a life interest in the home by the borrower and have a legal right to live there 
• no ability to repay or refinance the residential care loan.

In addition to the above criteria, one of the following criteria must also be met by the person living in the home. They need to:

• have given up employment or the opportunity for employment to care for their parent, delaying the parent's entry into residential care
• have bought the property together with the borrower who is/was a member of their family 
• be mentally or physically impaired.

If the application is approved, a new agreement will be entered into with the applicant. The Loan will then become repayable when the property is sold, the applicant moves out, or 12 months after the applicant's death - whichever is the earliest.

How to apply

An application for a Deferred Loan needs to be made at the time the loan becomes repayable, ie within 12 months of the death of the borrower.