A third-party top-up fee is the difference between the amount a council is willing to pay a care home and the chosen care home’s fee to self-funding residents.
On this page we tell you about:
1. When third-party top-up fees can be paid
2. Being aware of annual care home fee increases
3. The contract for third-party top-up payments
4. Instances when the local authority may increase the personal budget, so avoiding the necessity of paying a top up
When can third-party top-up fees be paid?
Residents usually can’t pay their own top-up fees (they shouldn’t be able to afford this if they have qualified for local authority funding), so it is a relative, friend or charitable organisation who might pay.
There is no legal requirement for friends, family members or anybody else to agree to pay a third-party top-up and therefore the decision to meet this cost is a voluntary one.
Help us improve care
Have you had experience of a care home behaving in an unfair, unclear or misleading way? Have you found that a care home has had unexpected charges or fees, or unclear contract terms? Which? wants to hear about your experiences. Share your story using our tool..
The only instances where a resident can pay their own top-up fee is if they have entered into a 12-week property disregard or a deferred payment agreement (Northern Ireland excepted).
Instances when paying a top-up fee could be considered are if your relative:
- would prefer to live in a care home that costs more than the council is prepared to pay or for genuine extras, such as living in a larger than standard room or with a better view
- wants to live in a more expensive area to be closer to family or friends and this wasn’t identified in the needs assessment
- was self-funding but is now eligible for local authority funding and wants to stay in the same home, which isn’t contracted to the council, or the council believes your relative's needs could be met in a lower cost care home.
The third party will need to demonstrate they are able to pay the difference between the local authority’s standard rate and the care home’s actual fees.
Be aware of annual care home fee increases
If you are considering topping up your relative’s funding, it is important to be aware that when the care home increases its fees (usually annually), the local authority may not increase its standard rate by the same amount. This means the third-party top-up could become disproportionately more expensive.
If you find that you (or whoever is paying the top-up fee) can no longer afford it, either due to a change in your financial circumstances or because of an unexpectedly high fee rise at a care home, you should tell the local authority. They should have set out in writing in the initial contract (see below) how they would respond to a change in the funding of the top up and what your responsibilities are in terms of letting them know of any change in circumstances.
Before deciding what to do, the council will have to carry out a new needs assessment. As a part of this, the impact of moving your relative to a new home - if this were necessary - would be taken into consideration. Until the decision is made, the local authority would be responsible for paying all the fees.
The contract for third-party top-up payments
Whoever is paying the top-up fee will need to sign a written agreement with the local authority.
It might be the case that a care home suggests the top-up is paid to them, but the government suggests the contract rests with the council, who will invoice the third party for their contribution to the overall fee.
The written agreement with the local authority should include:
- notification of how much the top-up payment will be
- how often the payment will be reviewed - this should be annually
- how the costs will be shared if the care home puts up its fees in the future
- what might happen if the person paying the top-up fees can no longer afford the top-up.
A care home can’t ask for a third-party top-up fee. They should go first to the council. If this happens to you, ask why they are doing this and then talk to the local authority. It is the duty of the council to reassess a person’s needs and if the cost of care is going to increase, then the council should pay unless they can argue that the needs can be met elsewhere.
Instances when the local authority may consider increasing the personal budget
There are a few circumstances when the council may increase the amount it is prepared to pay, so that a third-party top-up won’t need to be paid.
These circumstances relate to your relative’s assessed needs, so it’s important to be aware of these when the needs assessment is being made. Some exceptions are if:
- your relative needs to move to a more expensive area, to be nearer to his or her family
- your relative has particular care needs that can only be accommodated in more expensive care homes. Examples of this are specific cultural or religious needs or hearing or visual impairment
- the council can only offer one home in the area that meets your relative’s needs and that home charges more than the personal budget that has been awarded to your relative
- your relative was a self-funder but has become local authority funded but cannot be moved due to psychological needs, such as anxiety or depression, as well as physical frailty and issues around wellbeing.
- Paying for care: our overview of the different ways that a care home can be paid for.
- If your relative owns their own home: here we explain about the 12-week property disregard and the deferred payment agreement.
- Care home fees: find out the difference in fees for both residential and nursing care across the UK.
Page last reviewed: February 2017
Next review due: July 2018