What are top-up fees in a care home?

What is a care home top-up fee?

When a local authority pays for a person’s care home fees, they have to work within a budget. This means that, unless you have very specialist needs, you will probably need to choose a less expensive care home.

If you have your heart set on a more expensive care home, it is possible for the local authority to agree to this if somebody pays a top-up fee.

A top-up fee is when somebody pays the difference between what the local authority is willing to pay and what the care home of your choice costs.

Top-up fees are voluntary. They should only be applied when the care home you want cannot reasonably be funded by the local authority, according to your means assessment and needs assessment.

Somebody might also volunteer to top up if you were previously paying yourself but now can’t afford to. In this case, the council will pay a certain amount, but a top-up fee may be required.

Most top-up fees are paid for by a third-party, usually a family member but sometimes a friend or charity.

How do I pay a third-party top-up fee?

If you would like to pay a top-up fee, you will first need to ensure you can afford it. This fee is continuous. If you find yourself unable to pay, they may have to move to a cheaper care home.

When you agree to pay the fee, you will pay it either to the care home or the local council. Once you agree the amount, you will be given a contract to sign. Upon entering this contract, you will be legally obliged to pay the top-up payment at the agreed amount at the agreed times. The contract will also cover what will happen if the care home’s fees increase or if the person’s needs change. Make sure you are happy with every clause before you sign.

Davina Charlton is a solicitor at Nelson’s Law. She explains: “Careful consideration needs to be given as to whether you can afford top-up fees for a relative.

“Care home fees often increase each year, not taking into account whether a local authority will also increase their funding by the same amount. This could lead to a situation where you would be paying even more to cover the difference in fees.

“You should also take into consideration your own financial circumstances and if they may change in the future resulting in you being unable to afford this top-up.”

Can I pay my own care home top-up fee?

Usually you cannot pay your own top-up fee. This is because to be eligible for council funding, you should not be able to afford to self-fund your care.

When you are assessed by the local authority to decide whether you are eligible for funding, you will have a financial means test to assess what you can afford. They will look at the results of this and your needs assessment, which determines your individual care needs, to decide the standard rate which you are eligible for.

The means test only considers your finances and assets. This includes your share (usually 50%) of any joint assets but it does not include your family’s finances.

There are, however, some circumstances where you can pay your own top-up fee. These include, but are not exclusive to:

You have entered a ‘property disregard period’

When you first move into a care home, if it is intended to be permanent, you can sometimes get the first twelve weeks at a lower price. During this period the council can’t include the value of your house or flat in your means assessment. This is usually used if you need to move urgently and the twelve weeks allow you to decide what to with your property (such as sell it or rent it out).

You will need to speak to the council about your eligibility for this.

You have a Deferred Payment Agreement

A Deferred Payment Agreement (DPA) is an agreement with your local authority. Under a DPA, the local authority will lend you a certain amount of money, depending on the value of your house. When you pass away and your house is sold, they will claim this money back from the sale.

Ms Charlton emphasises: “Administration costs do apply with these arrangements and eligibility criteria need to be met in order to qualify for them. Interest does still accrue until the local authority is paid.”

You can find out when care home top up fees are unlawful here.