Care Home Top-Up Fees: What Are They and Do You Have to Pay?

Topic cluster: Care Home Costs & Funding | Reading time: 6 min

Top-up fees are one of the most misunderstood aspects of care home funding. Families are sometimes presented with them without a proper explanation, and some are asked to pay top-ups that are actually unlawful. This guide clarifies what top-up fees are, when they apply, who can legitimately pay them, and how to push back if something doesn't seem right.

What Is a Top-Up Fee?

When a local council funds care, they agree to pay up to a certain amount per week — the council's agreed rate. If your parent wants to live in a care home that charges more than this rate, the difference is a 'top-up fee'.

Example:

Council's agreed rate for your parent's care: £1,100/week
Chosen care home's weekly fee: £1,400/week
Top-up fee required: £300/week

The council must ensure at least one suitable care home is available within their agreed rate, without requiring any top-up. If all suitable homes exceed the council's rate, the council's rate itself may need to be reviewed.

Who Can Pay the Top-Up Fee?

Under the Care Act 2014 (England), top-up fees can only be paid by a third party — usually a family member, friend, or charity. Your parent cannot pay their own top-up from their personal care budget or personal allowance.

There is a limited exception: if your parent has been assessed as a partial self-funder (their assets are between the lower and upper threshold), they may be able to pay a top-up from savings in certain circumstances — but this is complex and should be confirmed with the council.

Are Top-Up Fees Legal?

Top-up fees are legal — but only when:

✅ There is a genuine care home available within the council's rate
✅ Your parent's choice to go to a more expensive home is freely made
✅ The top-up arrangement is clearly documented in a written agreement
✅ The third-party payer understands and agrees to the ongoing obligation

It is NOT legal for a care home to request a top-up fee from the resident themselves when they are fully council-funded. Any care home that demands this should be challenged — and the practice reported to the local authority.

What the Top-Up Agreement Should Include

A written top-up agreement should state:

The amount of the top-up fee
Who is paying it and in what form (direct to home or via the council)
What happens if the payer cannot continue (illness, financial hardship, death)
How and when the top-up can be reviewed
The notice period required to end the arrangement

Read this agreement carefully before signing. A top-up is an ongoing financial commitment that may increase over time as care home fees rise.

What If You Can No Longer Afford the Top-Up?

This is a real risk — care home fees typically increase annually, and financial circumstances change. If you can no longer pay the top-up:

Notify the care home and the local authority immediately
The council has a duty to find an alternative suitable placement within its agreed rate
Your parent cannot be asked to leave without a suitable alternative being arranged

The care home cannot simply ask your parent to leave because the top-up can no longer be paid. However, this is a distressing situation for everyone — try to plan ahead and have a clear plan for what happens if circumstances change.

Can the Care Home Charge a Top-Up Separately from the Council?

No. The care home must charge only one weekly fee to the council. Any top-up arrangement must be agreed through the council, not arranged separately between the care home and the family. If a care home asks you to pay a top-up directly to them, outside of a formal council-approved arrangement, this should be questioned.

NHS-Funded Care and Top-Ups

If your parent is fully funded through NHS Continuing Healthcare, they cannot be charged a top-up fee for their accommodation or care. The NHS covers the full cost of care for people who qualify for CHC. If a care home charges more than the NHS rate, the NHS may fund your parent in a different home.

Checking Your Parent Is in the Right Home

If your parent's care home is charging significantly above the council's rate, it is worth reviewing whether the council's rate itself is appropriate. If the council's rate is unrealistically low for the area, making it impossible to find a Good or Outstanding home without a top-up, you can challenge the council's rate.

Seek advice from Age UK or a specialist solicitor if you believe the council's rate is unreasonable.

Find care homes within your funding budget at homeformum.com