Care home top up fees: When are they unlawful?

Paying for residential care in the UK is costly, with self-funders paying on average £1,266 a week, which is why those who can get local authority funding are paying top-up fees to get the care home of their choice. The amount you pay will depend on your income level and where you live in the UK. Care homes tend to be more expensive in London and South East England.

If you need nursing care that will again bump the price up to around £1,528 per week on average. Dementia care is also more expensive.

Financial help from your local authority

Your local authority will carry out a financial assessment to see if you are eligible for any help with your care. If you live in England and have less than £23,250 in assets and capital, your local authority will step in and help you.

In Wales the threshold for getting help with residential care is £50,000.

In Scotland, everyone’s personal care is paid for and you only pay for the care home accommodation if you have £35,000 and over in assets and capital.

What are third party top up fees?

If your local authority is paying for your residential care, they will assign an amount of money for your care after carrying out a financial assessment.

This means some care homes may be too expensive for you and out of your reach.

However if you really want to go a specific care home that is more money than your local authority is prepared to pay, you can still go to that care home. But only if a family member or friend pays a ‘top up fee’ to make up the difference.

Families paying ‘secret subsidy’ by topping up care home fees

It is important that top up fees are purely voluntary and affordable for the person paying them.

Charities have warned that top up fees have become a ‘secret subsidy’ as councils are struggling with funding. So some councils are limiting the amount of money they spend on residential care and not giving families enough information about top up fees.

The local authority is responsible for making sure the full cost of the residential care is paid for so it must check with the third party person to ensure they are able to pay the top up and are voluntarily offering to do so.

The local authority cannot request for a top up fee to be paid. They must also offer alternative residential care that comes within the council budget.

Law on top up fees

 Lisa Morgan, partner and head of the nursing care recovery fee team at Hugh James Solicitors, says: “The law on top-up fees states that before the council can request this be paid by third parties, it must have provided clear and accurate information regarding alternative, affordable placements to these friends or relatives.

“The parties must be able to decide about paying the fee after being fully and transparently informed. The third party and therefore able to carefully consider the implications and decide from a position of being fully informed.”

If a care home resident’s financial situation changes

If the care home resident runs out of money and is forced to turn to their local authority to get help with paying for their care, Ms Morgan says “legally the council must offer authentic alternative care home options (cheaper ones that fall within the local authority rate) before turning to family or friends to request supplementary payment”.

Back in 2015, the Local Government and Social Care Ombudsman issued guidance on top up fees. This confirmed that an affordable placement, and one that is within the base rate the authority will pay, must be offered prior to any request for top-up fees being made.

“The authority needs to prove that, in the case of a top-up fee being needed to meet a person’s care needs, then at least two things have happened first: at least one other affordable accommodation has been offered; and the information given to third parties has been comprehensive, clear and accurate,” says Ms Morgan.

The Ombudsman has investigated complaints against Derbyshire County Council and Birmingham City Council. It found they “failed to provide a single appropriate and affordable alternative care home”.

Derbyshire County Council had to waive the top up fee for the placement, payable back to the date of admission. Birmingham City Council was forced to refund 11 years of top-up fees.

Illegal top up fees

Ms Morgan adds: “So, when councils fail to respect the law in relation to the provision of affordable care homes, it can be a very costly mistake.

“It is very stressful for many families to have to worry about how they’re going to find hundreds of pounds a week above and beyond their normal expenses. It becomes criminal when the councils that are supposed to be funding this cost are deliberately failing to meet their legally binding obligations.”

You can find out more about care home top up fees by reading our article.