If a relative’s care is partly paid for by the council, you may have been asked about a “top-up” fee. It is one of the more confusing parts of paying for care, and families often agree to one without fully understanding what they are signing up for. This guide explains what top-up fees are, when they are and are not allowed, who can pay them, and the questions worth asking before you commit.
This is general information to help you feel more confident, not financial or legal advice. The rules below apply in England under the Care Act 2014 and follow guidance from Age UK, Independent Age and gov.uk. Wales is broadly similar, but if your relative is in Scotland or Northern Ireland, check your local rules.
What is a care home top-up fee?
When the council agrees to fund someone’s care, it works out a personal budget: the amount it believes is enough to meet that person’s assessed needs in a suitable home. Some care homes charge more than this figure. A top-up fee is simply the difference between the council’s funded rate and the actual weekly cost of a more expensive home that the family has chosen.
It is important to understand what a top-up is not. It is not a payment for better care than the person needs, and it is not something the council can ask for to cover a shortfall in its own budgets. A top-up only exists because someone has chosen a home that costs more than the rate the council has set as sufficient.
The council must offer at least one home within its rate
This is the part many families miss. Before a top-up can ever come into the picture, the council has a legal duty to make sure there is at least one suitable care home available that meets all of your relative’s assessed needs and costs no more than their personal budget. The statutory guidance says councils should, where possible, offer more than one.
So a top-up should always be a genuine choice. If you are being told there is no option within the council’s rate and a top-up is the only way forward, that may not be right. Ask the council to show you the affordable option it is required to provide. You are entitled to choose a pricier home and pay the difference, but you should never feel pushed into one because nothing else was offered.
Who can pay a top-up fee?
In most cases a top-up is what is called a “third-party” payment. That means it is paid by someone other than the resident, usually a family member, sometimes a friend or a charity. The resident generally cannot pay it themselves out of their own income.
The reason is simple. When the council carried out its financial assessment, it already took your relative’s income and savings into account and left them with a protected amount for personal spending. Asking them to pay a top-up on top of that would eat into money the law says they are allowed to keep.
The three exceptions where a resident can pay their own top-up
There are a few specific situations, often called “first-party” top-ups, where the resident is allowed to pay the difference themselves:
- The 12-week property disregard. When someone first moves into a care home, the value of their former home is ignored for the first 12 weeks. During this short window they may be able to top up themselves.
- A deferred payment agreement. This is an arrangement where the council effectively lends against the value of the person’s home, with the debt repaid later, usually when the property is sold. Because the money is coming from their own property rather than their protected income, a resident with a deferred payment agreement can pay their own top-up.
- Section 117 aftercare. If the care is provided as aftercare under section 117 of the Mental Health Act 1983, different rules apply and a first-party top-up may be possible.
The key difference is the source of the money. A first-party top-up draws on the resident’s own property or assets in these defined circumstances. A third-party top-up is paid by someone else and should never come out of the resident’s protected personal income.
The risks worth understanding before you agree
Agreeing to a top-up is a long-term commitment, and it is worth going in with your eyes open.
The biggest risk is that top-ups can rise. Care home fees tend to increase each year, but councils do not always raise their funded rate by the same amount. When that happens, the gap widens and so does the top-up. A figure that feels manageable today could be noticeably higher in a few years, so think about affordability over the likely length of the stay, not just the first year.
The second risk is what happens if the person paying can no longer afford it. Circumstances change, and a top-up that once felt comfortable might become a real strain. If payments stop, the council cannot simply move your relative to a cheaper home overnight. It has to carry out a fresh assessment of their needs and wellbeing first, and consider the impact a move would have on them. Even so, a move can be the eventual outcome, which is unsettling for everyone, so it is far better to be realistic about affordability from the start than to over-commit.
Always get the agreement in writing
This is the single most important thing to take away. A top-up must be set out in a written agreement, and the council has a duty to provide this. Crucially, the agreement is usually between the person paying and the council, not directly with the care home, so the council remains responsible for arranging the care.
The written agreement should spell out the amount, how often it is paid, and what happens when fees go up. The council must also give you enough information and advice to understand the terms before you sign. A verbal promise or a quiet arrangement directly with the home is exactly the kind of thing that causes problems later. Get it in writing, read it properly, and keep a copy.
Questions to ask before you agree to a top-up
Before you commit anything, it is worth asking the council and the care home these questions:
- Can you show me at least one suitable home available within my relative’s personal budget, with no top-up required?
- Exactly how much is the top-up, and what does it cover that the funded rate does not?
- How and when will the top-up be reviewed, and what happens if the home’s fees rise but the council’s rate does not?
- Is this a third-party top-up, and will the agreement be with the council rather than the home?
- What happens if I can no longer afford to pay? Will my relative have to move, and what process protects them?
- Can I have the full agreement in writing to read before I sign anything?
A reputable home and a fair council will answer all of these clearly. If anyone is vague or rushes you, treat that as a reason to slow down and seek advice. Independent Age and Age UK both run free advice lines, and your local council’s adult social care team can talk you through your options.
Compare local care homes free on CareFinder
Understanding fees is only part of the picture. It also helps to see what is actually available near you so you can compare homes side by side before any conversation about top-ups. You can browse and compare options in areas like care homes in Bristol, care homes in Leicester and care homes in Cardiff, all in one place.
Compare local care homes for free on CareFinder to find the right fit for your family, with no pressure and no cost.