Care Home Top-Up Fees

A care home top-up fee is the difference between what your council is willing to pay towards your care and what your chosen care home actually charges. If you would prefer a different, more expensive home, you may still be able to move there if someone pays the difference between the fees and the cost of your care¹.

The key rule is who pays. You cannot usually pay your own top-up fees; they are generally paid by a third party, such as a friend, relative or charity¹. The council also has to show you a cheaper alternative that would meet your needs is available before it can charge a top-up at all, and if there is no such home, the council has to increase the amount it is prepared to pay².

Top-ups are not a fixed national figure. They depend on the gap between the council's personal budget for your needs and the home's fee, and care home fees usually increase annually¹. That means a top-up agreed today can grow, and the contract should set out how any annual increase in costs will be shared.

What a care home top-up fee is

A top-up fee is a voluntary payment to cover a shortfall between the amount a council will pay for a care home and the fees the care home charges to self-funders. It is also known as a third-party top-up⁴. The payment exists because councils negotiate a rate for a place that meets your assessed needs, and some homes charge more than that rate.

The council's starting point is your personal budget: the amount it has decided your care should cost, based on an assessment of your needs and a financial assessment of what you can contribute. Where your choice of care home accommodation costs more than your local council is willing to pay, someone else can make up the difference between that figure and the home's fee⁵.

Two things follow from that. First, a top-up is not a charge for better care; it buys a more expensive home, or a place in a home the council would not fund at its usual rate. Second, because it is measured against a budget rather than a price list, the same home can carry a different top-up for different residents depending on what each person's assessment says.

Care home fees and at-home care service fees vary depending on a number of different factors, including the area, what services are included and whether you are eligible for financial help from the council⁶. That variation is why top-ups are set case by case rather than published as a national rate.

When a top-up fee can be charged

A top-up fee applies where someone has chosen a care home that is more expensive than the council says it needs to be². The council cannot ask for a top-up if the person is in a more expensive home out of necessity rather than preference⁵. A third-party top-up fee does not apply where the move into a more expensive home was out of need rather than preference⁵.

Before asking for a top-up, the council must be able to show that there is another care home within the cost of your care that can meet your needs, and that a place there is currently available¹. If there is not a cheaper care home available that can meet your care needs, the council will have to increase its contribution to cover the care home fee increase¹.

A request for someone to pay a top-up should come from the local authority and not directly from a care home⁴. If a home approaches you directly for extra money, that is not the route the guidance describes.

The council must show a cheaper home that meets your needs

This is the safeguard that decides most disputes. The council has to show you a cheaper alternative that would meet your needs is available before it can charge you top-up fees. If not, the council has to increase the amount it is prepared to pay².

The test is about needs, not about what is cheapest. The council must be satisfied the alternative home can meet all your care needs, and it must weigh the impact of a move on your health and wellbeing before proposing it¹. A home that is cheaper but cannot meet your assessed needs does not remove the council's duty to fund a place that can.

If your care needs change, it may mean that it will cost more to meet your needs. In this case, the council must consider increasing the amount it is prepared to pay¹. That matters because a top-up agreed at the start can become the wrong figure if someone's needs increase later.

Councils also have to keep their charges reasonable. The council must make sure the charges are "reasonable" in terms of the kind of service being provided and are not above the cost of providing the service, so it cannot make a profit from charges⁷. In Scotland, when the council offers you temporary accommodation, it must take into account what you can afford to pay for it⁸.

Who pays a top-up fee: family, friends or a charity, not usually the resident

You will not normally be able to pay your own top-up fee; it will normally have to be paid by a friend, relative, charity or similar². Top-up fees are generally paid by a third party, such as a friend, relative or charity¹. This could be a friend or family member, or sometimes a charity⁵. Someone else will pay the difference, for example a family member, friend or charity⁹.

There are exceptions. You can pay your own top-up fee if you have just moved permanently into a care home and are in the 12-week property disregard period¹. In England, you can also pay your own top-up if your accommodation is being provided under section 117 of the Mental Health Act 1983 as aftercare¹. If your care home place is provided as after-care under section 117 of the Mental Health Act 1983, self-funded top-up payments are allowed⁵.

If you have agreed to pay a top-up fee for someone else, you will be asked to sign a contract, usually with the council, which will then pay the care home¹. The contract for the top-up fee must explain important points, including how much the top-up payments will be, how often they will need to be paid, what might happen if you or your chosen third party can no longer afford the top-up, how any annual increase in costs will be shared in England and Wales, and what will happen if care needs change in Scotland¹.

How much a top-up can add up to

Top-ups are not capped by a national figure, because they are the gap between a personal budget and a home's fee. What the evidence shows is that the underlying costs are substantial and rising. In England, user charges for residential care can rise as high as £15,000 a year, depending on savings levels¹⁰. Care home fees often increase every year, but local councils do not always increase their funding by the same amount⁵. That divergence is what makes a top-up grow over time.

The contract is where the growth is dealt with. It must set out how any annual increase in costs will be shared in England and Wales¹. Without that clause, a payer has no agreed basis for what happens when the home raises its fees.

If the person paying the top-up fee can no longer afford to pay it, the council has to carry out a new care needs assessment before deciding what to do, and in the meantime the council would be responsible for covering the fees¹. The local council also has to say in writing how it will respond to these changes and what the responsibilities of the person making top-up payments are⁵. The local council has to do a new assessment of your health and wellbeing before deciding to move you if top-up payments stop⁵.

How the council's personal budget is worked out

The financial assessment that decides what you contribute is carried out by your local council⁹. It looks at your capital and income, and the outcome determines how much of the fee the council meets and how much falls to you.

In England, capital over £23,250 results in having to pay the full cost of care services³. The same £23,250 upper capital limit applies to council help with care costs in England¹¹. For care at home rather than a care home, if your capital is below £23,250, your local authority contributes to your costs; otherwise, you pay the full cost as a self-funder¹². If you are paying fees yourself and your capital reaches £23,250, the local council may assist with funding¹³.

The personal budget is the amount the council will pay for a placement that meets your assessed needs. A top-up is measured against that figure, not against the home's published price. That is why the care needs assessment matters as much as the financial one: if the assessment does not record all your needs, the budget can be set too low, and the top-up too high.

If you would prefer your local council to arrange care for you, it must do so, as long as you have eligible care needs, though there may be an arrangement fee¹³. For care at home funded by the local council, either fully or partially, the local council may start charging you or ask you to pay more¹⁴.

Challenging a top-up fee

There are recognised grounds for challenging a top-up request: you were not offered a suitable care home within the cost of your care; your care needs assessment did not record all your needs; or the council has refused to increase the cost of your care and you feel your care needs are not being met¹.

Those grounds map onto the duties set out above. If no cheaper home that meets your needs was available, the council should have increased its contribution rather than asking for a top-up¹. If the assessment missed needs, the budget it produced is wrong. If needs have since increased, the council must consider increasing what it is prepared to pay¹.

Where the rules differ across the UK, the practical effect is in the detail of the contract and the charging rules rather than the principle. The contract must cover how annual increases are shared in England and Wales, and what happens if care needs change in Scotland¹. Separate guidance covers paying for care in England, Scotland, Wales and Northern Ireland.

If you are working through the assessment that produces the budget, Care Needs Assessments and Financial Assessments sets out how the two assessments fit together, and Does Your Home Count Towards Care Home Fees? covers how property is treated. Where a top-up is being paid while a property is sold, Deferred Payment Agreements for Care Home Fees explains the alternative route, and The 12-Week Property Disregard covers the period in which you can pay your own top-up.