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These issues have taxed much greater minds than mine, but this is my understanding of the position.
DLA mobility component is not affected if you move into a care home irrespective of whether you are self-funding, retrospectively self- funding, or funded by social services. Note that potentially the position is different if you are 100% funded in a nursing home by the PCT. Essentially because in these circumstances you may be treated as a hospital in-patient.
If you are a self-funder or a retrospective self-funder i.e on deferred payments, you remain entitled to DLA care component/AA - see CA/2604/1998 and CA/2937/1997, which clarified that retrospective self-funders were entitled. These confirmed the decision in a Northern Ireland Court of Appeal case, sorry I can't remember the exact reference, but one of the claimants was called 'Creighton'.
Prior to Octbober 2003 you were not entitled to DLA care component/AA if you were a retrospecive self-funder and were entitled to IS/IBJSA/HB. This regulation was abolished in October 2003. DWP guidance says they will need to see a copy of the agreement you have made with social services to repay the costs of your care home.
There is a comprehensive discussion of these issues in Chapter 17 of the Paying for Care Handbook.
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