Understanding Care Home Top-Up Fees

Understanding the financial landscape of care homes can be challenging, especially when it comes to understanding the various fees involved. 

One aspect that often causes confusion is the concept of care home top-up fees. 

This guide aims to clarify what top-up fees are, when they apply, and how to manage them effectively.

What are Care Home Top-Up Fees?

Care home top-up fees, also known as third-party contributions, are additional costs that cover the difference between what a local authority is willing to pay for care and the actual cost of the care home chosen by the resident. 

These fees are typically paid by a third party, such as a family member or friend, but in some cases, they can be covered by the resident themselves under specific circumstances.

Why Do Top-Up Fees Exist?

Local authorities set a standard rate they are willing to pay for care home services, based on assessed care needs. However, many care homes charge rates above this standard amount due to factors like location, facilities, and the quality of care provided. 

When a resident or their family chooses a more expensive care home, the difference between the local authority rate and the care home fee must be covered by top-up fees.

When Do Top-Up Fees Apply?

Top-up fees are applicable in the following scenarios:

  1. Choosing a More Expensive Care Home: If you select a care home that charges more than the local authority’s standard rate, top-up fees will cover the difference.
  2. Upgrading Room Options: If you opt for a larger or more luxurious room within a care home, the additional cost may be covered by top-up fees.
  3. Enhanced Facilities and Services: Some care homes offer premium services or facilities that are not included in the basic rate covered by the local authority. Top-up fees may be required to access these enhanced options.

Who Can Pay Top-Up Fees?

Third Parties

Typically, top-up fees are paid by a third party, such as a family member, friend, or even a charitable organisation. The individual or entity paying the top-up fee must agree to the arrangement and have the financial means to sustain the payments for the duration of the resident’s stay in the care home.


In some cases, residents themselves can pay top-up fees, but this is generally only permissible if they have a Deferred Payment Agreement (DPA) with the local authority. A DPA allows residents to use the value of their home to fund care home fees, deferring the payment until the home is sold.

How Are Top-Up Fees Arranged?

The arrangement of top-up fees involves several key steps:

1. Assessment of Care Needs

The local authority will first assess the individual’s care needs to determine the appropriate level of care and the standard rate they are willing to pay.

2. Choosing a Care Home

Once the care needs are assessed, the family or resident can choose a care home. If the chosen care home’s fees exceed the local authority’s standard rate, top-up fees will be required.

3. Financial Agreement

A formal financial agreement must be established, outlining the details of the top-up fees. This agreement will specify:

  • The amount of the top-up fee
  • Who will be responsible for paying the fee
  • The frequency of payments (typically monthly)
  • Any conditions or terms related to the payment of the fees

4. Regular Reviews

Top-up fee arrangements should be reviewed regularly to ensure that the third party can continue to afford the payments and that the care home costs remain consistent with the agreed terms.

Managing Top-Up Fees: Practical Tips

1. Assess Financial Capacity

Before committing to top-up fees, it’s crucial to assess the financial capacity of the third party responsible for the payments. Ensure they have a stable and sufficient income to cover the additional costs over the long term.

2. Explore All Options

Consider all available care home options within the local authority’s standard rate. While top-up fees can provide access to higher-quality facilities, it’s essential to balance quality with affordability.

3. Negotiate with Care Homes

Some care homes may be willing to negotiate their fees or offer discounts, especially if they have available capacity. Don’t hesitate to discuss pricing options with the care home management.

4. Seek Professional Advice

Consult with financial advisors, social workers, or care home placement specialists to understand all available funding options and the implications of committing to top-up fees.

5. Review Agreements Regularly

Ensure that the top-up fee agreement is reviewed periodically. Circumstances can change, and it’s important to reassess the arrangement to ensure it remains manageable and fair.

Care home top-up fees can be a necessary component of securing the best possible care for your loved one, but it’s crucial to understand how they work and manage them effectively.

By assessing financial capacity, exploring all options, and seeking professional advice, you can make informed decisions that ensure the well-being and comfort of your loved one without undue financial stress.

If you have any further questions or need assistance with care home funding, our expert team at Ashberry Care Homes is here to help. Contact us today for more information and support in navigating care home financial arrangements.