Care Home Top-Up Fees: The Rules, the Risks, and Who Pays

The Care Act 2014 framework gives council-funded residents a right of choice over where they receive care. If they choose a home within the council's standard rate, no top-up arises. If they choose a more expensive home, a third party must pay the difference — the "top-up".

The council's standard rate (sometimes called the "usual cost") is the amount the council assesses as sufficient to meet the assessed needs in a suitable home in its area. Resident's rights:

• The council must identify at least one home at the standard rate that meets the resident's assessed needs. If no such home is available, the standard rate must be raised — the resident cannot be forced to top up because the rate is unrealistic.
• The resident can choose any home that meets the needs. If they choose a more expensive home, the difference is the top-up — payable by a third party.
• The resident's personal preference (location near family, cultural fit, particular facilities) is relevant to whether the council's offered home is "suitable".

Top-ups must be transparent. The Choice of Accommodation Regulations 2014 require a written agreement specifying the home, the rate, the payer, and the consequences if payment stops.

The top-up payer is usually a family member or friend. The Regulations require they:

• Be able and willing to pay for the duration of the placement (or until reviewed).
• Sign a written agreement with the council.
• Pay either to the council (which pays the home) or directly to the home.

The resident's own money CANNOT be used to top up below the threshold. Specifically:

• The resident's capital below £23,250 is protected.
• The resident's income below the Personal Expenses Allowance (£30.65/week 2025-26) is protected.
• The resident cannot be made to "give back" Attendance Allowance, PIP, or other benefits to top up the placement.

There is one exception: the resident can top up using their own funds if their capital is above the threshold (i.e. they are part-self-funder) and they agree. This is rare in council-funded placements.

The Choice of Accommodation Regulations 2014 require a written agreement covering:

• The amount of the top-up and how often it is paid.
• Who pays.
• Frequency of review and how reviews work.
• What happens if the top-up payer can no longer pay.
• Notice required from either side.
• The mechanism for resolving disputes.

Critically: the agreement must address what happens when the home raises its fees. If the home increases its fees and the council does not increase its rate proportionately, the top-up amount rises automatically — the third party absorbs the increase. This is a significant risk and a frequent source of disputes; couples taking on top-up commitments often underestimate how quickly the top-up can grow.

Many councils' template agreements default to "top-up rises with home fees" — push back and propose a cap, or require renegotiation if the gap exceeds a percentage.

Five recurring issues:

• The council's standard rate is unrealistic — no home actually accepts at that rate in the area. Top-ups become forced rather than voluntary. Challenge via council complaint, then LGSCO, requesting evidence of homes at the standard rate.
• The home raises fees and the top-up grows — third party pays more than agreed. Check the agreement; renegotiate if possible; LGSCO if the council refuses.
• The top-up payer can no longer pay — the council must consider alternatives (raising standard rate, finding cheaper home, accepting reduced top-up). Forcing a move is a last resort and requires re-assessment.
• The resident's pension is being used — this can happen accidentally where the home invoices the resident directly. Check the financial arrangement; the council should be paying the standard rate.
• The home demands top-up where none is in the agreement — the home cannot bill the resident or family above what is contractually agreed. Refuse and escalate to the council and CQC.

If you believe the top-up arrangement is unfair:

1. Request the council's standard rate evidence. Ask for a list of homes accepting at the standard rate that meet the assessed needs.
2. Request a copy of the written agreement. If there is no written agreement, the top-up is potentially unenforceable.
3. Complain in writing to the council. The first stage of the statutory complaints procedure.
4. Escalate to the Local Government and Social Care Ombudsman. The LGSCO has upheld many top-up complaints, particularly where the council's standard rate was demonstrably below market.
5. Take legal advice on judicial review if the council's decision is unreasonable. Time limit 3 months.

The LGSCO has produced specific guidance on top-up fees and routinely awards compensation where councils have set unrealistic rates. Settlement is often achievable at the council complaint stage once the LGSCO route is mentioned.