What is a care home top-up fee?
In some cases a local authority may agree to pay for a care home, but they’re not prepared to cover the full cost of your preferred home. A care home top-up fee is an extra payment that makes up the difference between what the council will pay and the full cost of your chosen care home.
This is also known as a third-party top-up fee, as it is usually paid by a relative, friend or another third party.
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’s a relative, friend or charitable organisation who might pay.
There is no legal requirement for family members, friends or anybody else to agree to pay a third-party top-up fee and therefore the decision to meet this cost is a voluntary one.
The only instances where a resident can pay their own top-up fee is if they have entered into a deferred payment agreement (Northern Ireland excepted).
Instances when paying a top-up fee could be considered are if you:
- 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
- want to live in a more expensive area to be closer to family or friends and this wasn’t identified in the needs assessment
- are self-funding but are now eligible for local authority funding and want to stay in the same home, which isn’t contracted to the local authority, or the local authority believes your 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 amount the local authority is prepared to pay and the care home’s actual fees.
Be aware of annual care home fee increases
If you’re considering topping up someone’s funding, it’s 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 top-up fee 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 local authority will have to carry out a new needs assessment. As a part of this, the impact of moving your loved one to a new home – if this is necessary – is taken into consideration. Until the decision is made, the local authority is responsible for paying all the fees.
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 local authority, 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 local authority. If this happens to you, ask why they are doing this and then talk to the local authority. It’s 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.
Government funding might be available to help pay for a care home. We explain the means test and other rules.
Care home fees vary across the UK. It also depends on the type of care home you are looking for and your care needs.
A needs assessment is key to getting the support you need. You have a right to this assessment and it's free of charge.