Care Home Top-Up Fees UK (2026): What They Are, Who Can Pay, and What Happens If Payments Stop

Care home top-up fees (also called 'additional fees' or 'third-party top-ups') are payments made to bridge the gap between the rate the local authority will pay for a care home place and the actual cost of the specific care home the resident or their family prefers: (1) THE BASIC POSITION: when a person qualifies for local authority funding of their care (because their capital is below £23,250), the council pays a 'usual cost' — a rate representing what it would pay for a care home that meets the person's assessed needs. This is set by each individual council. The person is entitled to choice of accommodation: if they (or their family) prefer a more expensive home, a 'top-up' can be paid to cover the difference; (2) LEGAL FRAMEWORK: Care Act 2014 s.30 — the right to choice of accommodation; Care and Support (Choice of Accommodation) Regulations 2014 — the rules for when top-ups apply; DHSC Care and Support Statutory Guidance Chapter 8 — detailed guidance. The council MUST make a genuine choice available: at least one home within the council's usual cost that meets the person's assessed care needs must be offered. If the council only offers homes that require a top-up, this is unlawful; (3) WHEN TOP-UPS ARISE: top-ups arise when: (a) the person prefers a home that charges more than the council's usual cost; (b) the person wants a specific location, standard of facilities, or size of room not available within the usual cost; (c) private rooms vs shared rooms — if the person or family want a private room and the standard rate covers only shared; (4) TOP-UP MUST BE A GENUINE CHOICE — NOT THE ONLY OPTION: the council must always be able to provide at least one home at the standard rate without a top-up. If the council cannot identify any suitable home at the standard rate in the required area, it must increase the personal budget to the cost of a suitable home — the top-up mechanism should not be used to address a shortfall in council funding of care generally; (5) AMOUNT: the top-up is the difference between the care home's weekly fee and the council's usual cost for that type of care. Example: Council usual cost = £800/week; care home fee = £1,100/week; top-up = £300/week = £1,560/year for the third party to fund.

The rules on who can pay top-up fees are strictly prescribed in the Care Act 2014 regulations — and there is a frequently misunderstood rule about the resident paying their own top-up: (1) WHO CAN PAY: a third party — typically a family member (adult child, sibling, spouse/partner who is not the financially assessed resident), a friend, a charity, or other individual. The third party must: (a) Genuinely be able to afford the top-up; (b) Enter into a written top-up agreement with the council; (c) Continue the payments for the foreseeable duration of the placement; (2) CAN THE RESIDENT PAY THEIR OWN TOP-UP FROM THEIR OWN SAVINGS? GENERALLY NO. The Care and Support (Choice of Accommodation) Regulations 2014 and the CASS Guidance are clear: a local authority-funded resident should NOT normally use their own capital or income (above the assessed contribution) to pay a top-up. The reason: if the person has resources above the minimum level, those should be declared in the financial assessment (means test) — using them for top-ups would be circumventing the means test; (3) THE LIMITED EXCEPTION — PREVIOUSLY SELF-FUNDING RESIDENTS: if a person was previously self-funding at a particular care home and transitions to local authority funding, they may voluntarily use their own resources to remain in that home via a top-up. This is a narrow exception and must be: (a) Entirely voluntary — not required by the council; (b) Not funded from the Personal Expenses Allowance (PEA — £30.15/week); (c) Formally documented in a top-up agreement; (4) TOP-UP FROM A DEFERRED PAYMENT AGREEMENT (DPA): where the resident has a Deferred Payment Agreement securing care costs against the property, the DPA can include the top-up element if agreed. This is one legitimate route for self-funding of top-ups; (5) PRACTICAL RISK: many families agree to pay top-ups without fully understanding the long-term commitment. Inflation, care fee increases, and the family member's own financial changes over years can make a top-up agreement unsustainable. The council cannot force the family to continue paying — but the care home can serve a notice to quit if fees are unpaid.

A top-up agreement is a formal written contract between the local authority, the third-party payer, and (often) the care home. Here is what it must contain and what happens if it breaks down: (1) WHAT THE AGREEMENT MUST INCLUDE: (a) The names of all parties: the local authority; the third-party payer; the care home (as the payment recipient); the resident; (b) The top-up amount per week (and whether it covers any specific room or service); (c) How and when payments are made (directly to the care home; to the council; frequency); (d) What happens if the top-up amount increases — how and when the third party is notified of fee increases; (e) What happens if the third party cannot continue paying; (f) The consequences for the resident's placement if payments stop; (2) FEE INCREASES: care homes typically review fees annually (or more frequently). The care home may raise the fee; the council's usual cost may or may not increase proportionally. If the gap widens, the top-up increases. The third party should ensure the agreement specifies: the notice period for fee increases; any cap or limit on increases; the right to reassess and terminate the agreement; (3) IF TOP-UP PAYMENTS STOP: (a) The care home notifies the council; (b) The council will attempt to resolve the shortfall; (c) The council CANNOT simply evict the resident — it has a duty to arrange suitable alternative accommodation within the standard rate if the current placement becomes unaffordable; (d) The resident may need to move to a less expensive home if the family can no longer pay and no alternative arrangement is made; (e) The care home may issue a notice to quit based on the contract terms (usually 28-30 days notice for a residential placement); (4) THE COUNCIL'S DUTY ON FAILURE: the council must find the resident a suitable alternative placement at the standard rate. Moving a vulnerable elderly or disabled person between care homes carries significant health risks — families must raise concerns urgently and in writing if a forced move is threatened; (5) CMA GUIDANCE: the Competition and Markets Authority (CMA) published guidance on consumer rights in care homes (2018). Care homes must be transparent about: all charges including top-ups; fee increase policies; notice periods; terms for ending a placement. Residents and families can challenge unfair terms under Consumer Rights Act 2015.

The legal position is clear: the council must fund at least one suitable care home at the standard rate without any top-up requirement. But in practice, this obligation is frequently tested and misapplied: (1) THE LEGAL DUTY — CHOICE OF ACCOMMODATION: Care Act 2014 s.30 and the Choice of Accommodation Regulations 2014 impose a positive duty on local authorities to: (a) Arrange care in the person's preferred accommodation if suitable homes that meet assessed needs are available; (b) ALWAYS offer at least one option at the standard rate (without a top-up) that genuinely meets the person's assessed care needs; (c) Not make top-ups a structural requirement of accessing care; (2) WHAT 'SUITABLE' MEANS: a suitable home is one that: meets the person's assessed care needs; is available (has a vacancy); is in an area that is reasonably accessible (especially for family carers); complies with relevant care quality standards (CQC registration). The council cannot point to a home 100 miles away as the 'standard rate option'; (3) WHEN THE COUNCIL'S USUAL COST IS TOO LOW: if the council's usual cost is below what any local care home charges (meaning there genuinely is no home at the standard rate), the council must increase the personal budget to the cost of an available suitable home — not impose a top-up on the family. Councils that structurally under-fund the personal budget to force families into top-up agreements are acting unlawfully; (4) HOW TO CHALLENGE AN UNLAWFUL POSITION: (a) Put the challenge in writing — ask the council to identify the specific care home(s) available at the standard rate in the required area that meet assessed needs; (b) If none are identified, write formally requesting an upward revision of the personal budget under the Choice of Accommodation Regulations; (c) If refused, make a formal complaint to the council; escalate to the Local Government and Social Care Ombudsman (LGSCO); (d) The LGSCO has upheld many complaints where councils have failed to provide a genuine standard-rate option; (5) CQC RATINGS: a council cannot insist on a standard-rate home that has a 'Requires Improvement' or 'Inadequate' CQC rating if the person's assessed needs require a higher standard. Challenge any placement in a poorly-rated home.

Top-up fee commitments can affect family finances significantly over several years — and the interaction with estate planning and inheritance should be considered: (1) IMPACT ON FAMILY FINANCES: a top-up of £300/week = £15,600/year. Over 5 years = £78,000 in third-party payments. Families agreeing to top-ups should model the long-term financial commitment carefully. If the paying family member has a mortgage, pension contributions, or their own retirement savings, the top-up commitment competes with those; (2) TOP-UP PAYER PRE-DECEASES THE RESIDENT: if the top-up payer (e.g. an adult child) dies before the resident (parent), the top-up agreement ends. The resident's placement may be at risk if no alternative payer can be found. This is an often-overlooked risk. Options: (a) Arrange life assurance on the third-party payer to fund a top-up continuation; (b) Have multiple family members as joint top-up payers; (c) Include a provision in the top-up agreement for who takes over on the payer's death; (3) THE RESIDENT'S OWN ESTATE: if the resident's estate eventually contains significant assets (e.g. a house that was disregarded during the care period), those assets will be subject to care fees recovery if the council provided funded care. This does not directly affect the top-up — the top-up is on top of the funded element — but the family should understand that both the funded care costs AND any top-up amounts are distinct; (4) INHERITANCE FROM THE RESIDENT: if the resident dies with assets (e.g. savings above the care fees paid), those pass under the will or intestacy to beneficiaries. A carefully drafted will ensures those residual assets pass correctly; (5) DEED OF VARIATION OPTION: if a family member inherits from another estate (e.g. a sibling) and that inheritance could be redirected to fund the resident's top-up, a deed of variation within 2 years of death can redirect the inheritance — with IHT benefits; (6) ESTATE PLANNING WHILE RECEIVING FUNDED CARE: a funded resident can still make a valid will (subject to testamentary capacity — Banks v Goodfellow [1870]). Update the will to reflect: who receives any residual estate after care costs; whether any trust structure is appropriate; who the executor is (often an adult child already managing financial affairs as LPA attorney).