What are third-party top-ups?

When could you be asked to contribute towards a relative or friend's care home fees?

Mother and daughter hugging
When could you be asked to contribute towards a relative or friend's care home fees?

If your care home fees are part-funded by the council, but you want to be in a care home which costs more than the one your local council has found for you, you should still be able to move there.

Council social service departments have a duty to allow an older person to choose which care home they would like to live in.

The key is to have someone who is willing to pay the difference between what the care home charges and the council agrees to pay.

This could be a friend, relative, or charitable organisation (such as the armed forces).

If this is the case, they can pay the shortfall through what is known as a ‘third party top-up’.

Can you avoid the cost of care?

Local councils and the standard rate

If you move into a care home and qualify for means-tested funding, the local council will normally have a ‘standard rate’ (also known as the ‘usual cost’) that they will pay.

The council should be able to tell you which homes advertised on its list or website will offer a placement at its ‘standard rate’.

If the care home you want to move into costs more, a third party top-up may be needed.

That said, a local council should not set the standard rate so low that it routinely has to ask for a top-up towards the cost of care home fees. Councils should pay a realistic amount to provide you with a suitable placement to meet your care needs.

You cannot pay a top-up yourself

As the person receiving care you cannot pay a top-up yourself. The only exception is if you have entered into a 12-week property disregard period or a deferred payments agreement with the council.

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Councils must show proof

If the local council says the care home you want to go to costs too much, it will have to demonstrate that there is another care home in the area that can meet your needs. It will also need to show that the home it has found accepts the council’s standard rate – and that a place is currently available.

Only then do you need to arrange a top-up to go into your chosen home.

An example

Let’s say, for example, your local council has a standard rate of £405 a week, and that there are two care homes, both which have a space – and both of which are able to meet your assessed needs.

Let’s also says that the first home is pretty basic and costs £405 a week, and the second one is more luxurious and costs £485 a week.

If you choose the second home, your local council would be within its rights to ask for a third party top-up fee to cover the additional £80 a week.

If, however, the only care home available to meet your needs was the second care home, the council would need to increase its standard rate to £485. They would not be able to ask for a top-up.

Download our FREE care funding factsheet here.

Third parties should not feel pressured

As a friend or relative of someone who has a shortfall, you should not feel pressured into paying a top-up fee.

Before agreeing to do so, you should ensure the council is paying a reasonable ‘standard rate’.

Then, once you agree to pay a third party top-up, the council or care home will ask you to sign an agreement.

Proving you can pay the top-up

If you are planning on paying top-up fees for a relative, you will need to show the local authority that you have the means to pay the fee – and that you can afford it.

The council will need to check that the third party contribution will still be possible when the fees go up – usually on an annual basis – as they will not share the increase.

Being able to afford higher fees is important as if you are unable to keep up the payments, the person may have to move to a cheaper care home.

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Esther Shaw / 24 September 2015
The opinions expressed are those of the author and are not held by Saga unless specifically stated. The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.

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