Home · Compare options · CHIP vs Deferred Payment Agreement
Compare optionsCHIP vs the Deferred Payment Agreement.
A Deferred Payment Agreement (DPA) is the council-administered route that defers care fees against the family home. The Plan is a privately-run alternative. Both keep the home; this page sets out the structural differences.
The council-administered deferment, in plain language.
A Deferred Payment Agreement is offered by your local authority under the Care Act 2014. The council pays your parent’s residential care fees; the family agrees the fees can be recovered from the home when it’s eventually sold (typically after the family member’s death). Interest accrues on the deferred amount.
DPAs are underused. Take-up varies hugely by local authority. They’re administered by the council’s adult-social-care team, not by an independent service. Your family is responsible for maintaining the home during the deferment period.
The two routes, side by sideWhat each route actually does.
The Care and Home Inheritance Plan
Administered by
My Lifetime Care, a charity-owned UK private company.
Property arrangement
A long lease is granted on the home. The home is professionally let to tenants if your parent moves to residential care. We manage the tenancy, maintenance, and insurance.
What accrues against the home
Nothing. The Plan is not a loan; no interest accrues.
What the family inherits
The home, preserved.
Independent legal advice
Mandatory at both ends. Your solicitor reviews everything; we contribute to reasonable fees.
Deferred Payment Agreement (DPA)
Administered by
Your local authority’s adult social care team. Availability and process vary by council.
Property arrangement
The home is usually left empty during the deferment period. Some councils permit letting; many don’t. The family is responsible for maintenance, insurance, and council tax.
What accrues against the home
The deferred care fees plus interest at the rate set by the council (linked to government gilts). The balance grows over time and is repaid when the home is sold.
What the family inherits
The home, minus the accumulated deferred-fees-plus-interest balance. The home is usually sold to settle the DPA after the resident’s death.
Independent legal advice
Advisable but not formally mandatory. The council provides the agreement; you can take it to a solicitor at your own cost.
Both are legitimate; the right answer depends on the family.
DPAs work for some families very well. They’re free at the point of entry and administered by the state. The question is whether the structural differences from CHIP matter for your situation.
A DPA is often the right route when…
- The family is comfortable with the council’s administration and timetable
- Care needs are short or capped (a few years rather than many)
- The family can manage an empty property (maintenance, insurance, council tax)
- The family is comfortable with the home being sold to settle the DPA at the end
- The local council has a smooth DPA process and recommended pathway
The Plan is often a better fit when…
- Care needs are likely to span many years (dementia, complex needs)
- The family doesn’t want the home to sit empty or to manage a tenancy on their own
- The family wants the home to pass intact rather than be sold to settle deferred fees
- The local council’s DPA process is slow or restrictive
- The family wants the structural legal protections of an independent-solicitor-reviewed Plan
Three differences worth understanding.
DPA leaves it empty. The Plan lets it.
Most DPAs leave the home empty during the deferment period (some councils now permit letting; many still don’t). Empty homes deteriorate, attract council tax, and require ongoing family attention. The Plan’s structure assumes the home is let and we manage that.
DPA accrues it. The Plan doesn’t.
The DPA balance grows with interest at the council’s set rate. Over a long care journey the interest can be significant. The Plan is not a loan and nothing accrues; the home’s rental income and growth offset the care costs directly.
Settle-then-inherit vs preserve.
A DPA ends with the home being sold to repay the deferred fees plus interest. The Plan ends with the home passing to the family intact. The end-state of the asset is the structural difference.
This page is a structural comparison and does not constitute financial advice. CHIP is not an FCA-regulated product. DPAs are administered by local authorities under the Care Act 2014; specific terms vary by council.
A ten-minute call clarifies which route fits.
If your family is weighing this decision, the fastest way to get clarity is to talk it through with someone who can describe both routes in your specific circumstances.
Other ways to fund care, compared.
CHIP vs selling the home
The most common route. The Plan’s alternative: same care fees paid, home stays in the family.
CompareCHIP vs equity release
Both keep the family in the home. Different on debt, interest, and time horizon.
Read moreHow the Plan works
The four-step explainer. What happens at each stage, what protects your family.