Interest added by council onto deferred payment after death.

Chewyboy

My mother in law died on the 17th May 2020 in a nursing home. The council were paying for her care on the deferred payment scheme. On the 25th June my wife received the final bill which was dated 23rd June, the bill was for around £10000 which was roughly what we expected. Now here's the rub... the council is charging us interest on the bill from the 17th May (the date she died) until the date the bill is paid! That means we have to pay interest for the time it took the council to send a bill out to us. In what line of business (other than council business) would this kind of behaviour be deemed acceptable?
I would be interested to read other views on this.

sammyjammy

I don't think its entirely unreasonable, I am sorry for the death of your MIL but its business.

unholyangel

A deferred payment scheme is designed so that the council pay the care home fees upfront, place a charge on the property and are repaid when the house is sold. Normally this is beneficial even when interest is charged because the house would gain more in value than the interest charged. It would also be an agreement your mother (or someone with PoA) would have made, so were they made aware of the interest charges at the time they agreed? When did your mothers house sell? 

The issue you'll probably have is that it's up to the local authority if they charge interest - assuming you're not in scotland where there are some rules as to when they can charge it. 

Fwiw, even on 10k, you're probably only talking about £22 in interest.

NinjaTune

This all sounds familiar - I know you have a 1 post count, but have you posted about being charged interest on this debt by the council before?  Mentioning how much per day was being charged in interest?

Anyway, that aside, I assume you paid the bill the day it was received in order to avoid further charges.  You could complain to the council about the delay in contacting you and ask them to write off/refund part of the interest charges.  Doubt you'll have much success though if I'm honest.

Chewyboy

No I haven’t posted before.
We do not have a problem with the interest as we knew all about that when we signed the contract. What I find unacceptable is paying interest for the period between my MIL dying and receiving the bill (38 days later). Anyway as Unholyangel says the interest is minimal and yes we have paid the bill straight away to avoid more. 
I send invoices out every day and I don’t think my customers would accept me charging them interest for the period between finishing the job and them paying the bill.
Anyway that’s life.
Thanks for your responses.

Brynsam

Chewyboy said:

My mother in law died on the 17th May 2020 in a nursing home. The council were paying for her care on the deferred payment scheme. On the 25th June my wife received the final bill which was dated 23rd June, the bill was for around £10000 which was roughly what we expected. Now here's the rub... the council is charging us interest on the bill from the 17th May (the date she died) until the date the bill is paid! That means we have to pay interest for the time it took the council to send a bill out to us. In what line of business (other than council business) would this kind of behaviour be deemed acceptable?
I would be interested to read other views on this.

The council took just over a month to send out a bill, which would be perfectly reasonable under normal circumstances; but current circumstances are anything but normal. What did you expect: that the bill would be sent out next day? 

sheramber

If they had sent the bill out earlier would you be complaining they were insensitive?

Dox

Chewyboy said:

No I haven’t posted before.
We do not have a problem with the interest as we knew all about that when we signed the contract. What I find unacceptable is paying interest for the period between my MIL dying and receiving the bill (38 days later). Anyway as Unholyangel says the interest is minimal and yes we have paid the bill straight away to avoid more. 
I send invoices out every day and I don’t think my customers would accept me charging them interest for the period between finishing the job and them paying the bill.

Of course your customers wouldn't accept being charged interest - that isn't part of the terms of their contract with you.

You seem to be upset that the council didn't spring into action instantly, but think for a minute of the hurdles they would probably have to jump through, all compounded by Covid-19 issues:

• they would need to be advised of your MIL's death 
• they would need to check with the home whether any fees were still due, or if there had been any overpayment, and wait for clarification of that. Care homes are also under a bit of pressure right now, so the reply could well have taken several weeks
• the council would need to work out exactly what was owed at the time the bill was issued 
• somebody needed to physically issue the bill

Are you starting to grasp why your reaction is perhaps a bit unreasonable?

Dox

inspectorperez said:

Despite what previous posters have to say on the question of interest, this seems to me that it is a clear case of undue enrichment on behalf of the council!

The fact that there is no period of grace commencing on the date of death is staggering, and I would have expected a period of at least 30 days before interest started to run.

I would certainly request explicit detail supporting the interest claim before you oblige by full settlement in terms of what the contract stipulates. Councils are not obliged to charge interest under deferred payment schemes.

Councils may not be 'required' to charge interest, but if the agreement entered into confirms interest will be charged, then expect to pay it. 

It is not remotely surprising, let alone 'staggering' that there is no 'period of grace commencing on the date of death' (unless you're in Scotland, which of course differs from England or Wales). Care home fees are often not settled until the deceased's former home is sold, which can be many months, so why would there be a period of grace? The council has still effectively 'lent' the money, and councils have duties to taxpayers - which include enforcing agreements.

Chewyboy

Thanks for your responses, I said I was interested to see other views on the matter and they were interesting. I defer to your collective wisdom and consider the matter closed.
Thanks again.

Owain_Moneysaver

Personally I would expect 28 days to pay from the date of invoice. 
Business may be business, but I think it's in bad taste.