Why do care homes charge a top up?

Care home fees often increase year-on-year, but local councils don’t always increase their funding by the same amount to reflect these changes. This means that you could find yourself paying more each year to cover the difference in fees.

What is a first-party top up?

Sometimes known as a resident top-up, there are specific circumstances where you can pay a top-up from your own money for your preferred accommodation. This is known as a first-party top-up. In this case, you’d still be responsible for paying an assessed charge from your capital and income during those 12 weeks.

What does a third-party top up mean?

A third-party top-up allows you to live in your preferred care home. This comes into play if that care home charges more than your local authority is prepared to pay.

Care Home Top Up Fees: Do You Have to Pay?

This article was reviewed by Sara Chapin, Director of Finance at Lottie, on 16th December 2024, to ensure accurate and trustworthy information for care seekers. Sara Chapin has been a Certified Public Accountant with the National Association of State Boards of Accountancy since 2017. Next review due December 2025.

If you or somebody you’re close to is entering a care home, it makes sense to work out how much this is going to cost. In some cases, the amount of money the council is willing to contribute, together with your own payments, won’t be enough to pay for care. In this case, you or your loved one may need a care home top-up fee.

Here, we’ve outlined what top up fees are, how to pay them and what other help is available.

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What Are Care Home Top Up Fees?

A third-party fee (often called a care home top up fee) is when another person – rather than the council or yourself – pays the remaining balance of your care home balance. This is usually a relative, friend or charitable organisation.

A care home top-up fee is usually applied when the residential care home or nursing home you want to move to costs more than your personal budget (this is the amount the council is prepared to pay).

Do You Need to Pay Top Up Fees?

Care home top up fees should only be chargeable if an individual is receiving a genuine upgrade in care. Even then, they’re still voluntary.

An example of a circumstance that could merit a top up fee is if you want additional facilities, such as a bigger room or one with a sea view.

Or, it could be that you can no longer afford your own care home fees and have now become reliant on the council’s funding. And they in turn believe another less expensive home can accommodate you just as well.

Are Care Home Top Up Fees Legal?

Whether you will have a top-up fee to pay is your decision. They are legal, but there’s no legal requirement for a third party to meet this cost. Top up fees aren’t legal if the funding you’re receiving is from the NHS under Continuing Healthcare.

We’re here to help you find the right care home for you or your loved one. You can request a free list of care homes from our care experts, who will then share homes matching your budget, location and type of care needed. You can also search for a care home through our easy-to-use directory.

How Top Up Fees Work: Rules and Legal Advice

An individual who agrees to pay a top up fee for a relative or friend should be aware that this will be expected on an ongoing basis. It involves signing a legally binding contract with the care home to verify this.

If in the event the third party’s circumstances change and he or she can no longer afford to pay the top up fee then both the local council and care home should be informed that this is the case.

The local authority may then attempt to negotiate with the care home to allow your relative to remain there. It could be they are moved to a smaller room, for instance. In the event this isn’t possible, it could be another less expensive care home is suggested (the impact on your relative should be assessed and taken into account before this happens). In the meantime, the council should pay the top up fees.

In fact, a top up fee should always be agreed with the local authority rather than the care home. That’s because the council is always legally responsible for the full costs of an individual’s care.

Who Pays Top Up Fees?

A care home top-up fee is often paid by a family member or close friend. If needed, top-up fees can also be paid by multiple people. Some charitable organisations will help with top-up fees as well.

However, nobody is legally required to make up the difference in your care costs through a top-up fee. Instead, they’re paid voluntarily.

Financial Support for Top Up Fees

In some instances, a charity may pay an individual’s top up fees in a care home. A website such as Turn2us may have details of which particular charities are involved in this type of provision.

Property Disregard Period

The property disregard period lasts for the first 12 weeks after someone permanently moves into a care home. If they aren’t paying for their own care and are looking for help from the council, the value of their home can’t be included in their assessment during this time.

It may be that the council will agree to pay for your care during these 12 weeks, although you may also be asked to make a financial contribution.

The reason for this property disregard ‘break period’ is to give you time to either sell your home or consider setting up a deferred payment agreement.

However, if there’s still someone living in the house - such as a spouse or close relative aged over 60 - the property won’t be included in the council’s assessment.

Deferred Payment Agreements

This is when an individual ‘defers’ payment of their care home fees. Here, they allow the council to sell their home – but only after they pass away. The council can then reclaim the cost of the care they have already paid for.

Deferred payment is an option open to everyone who, following a council assessment, is told they must go into a home. To qualify in England, you must have savings of less than £23,250 (excluding your home).

The council can refuse a deferred payment request if an individual’s home isn’t worth much money or the council believes it may be problematic to try and reclaim the debt.

Dealing with Increasing Fees

It’s common for care homes to increase their fees on an annual basis. However, that’s not to say the council will increase their payments in line with this.

If there isn’t another care home in the vicinity that’s right for an individual, the council will have to increase its payments.

Help if You Can No Longer Afford to Pay For Care

If the person paying for the care home accommodation can do so no longer, they’ll have to inform the council. Council staff will then carry out another assessment to determine how their care needs can be best met.