What are third party top-ups for care?

When you are trying to choose a care home for mum or dad and everything is going a bit too fast, the last thing you need to do is have a conversation about third party top-ups when you have no idea what they are. As I always like to make sure you have the information in your memory bank for when it is needed here is an explanation!

When someone needs to move into a care home they will either fully fund the cost of their care from their savings or the local authority will help to fund that care. Care homes set their monthly fees according to what it costs to provide care for an individual. The local authority does not always agree to pay these fees however. When an individual moves needs care which is funded by the local authority the local authority will agree to cover the cost but only up to a certain amount. This is called the “indicative rate.” Any care home will tell you that the indicative rate set by the local authority is not a real reflection of the cost of care for someone in a care home so there is often a negotiation process which takes place to determine the amount that care will cost.

Now here’s the thing: some care homes often cost more than the indicative rate. It may be they have a sea view, extra support, or simply better biscuits at tea time. If your chosen home charges more than what the council is willing to pay, someone has to cover the difference.

That’s the top-up; the extra cost that bridges the gap between what the council pays and what the care home charges.

Who can pay it?

Here’s where it gets a little complicated:

• You can’t pay your own top-up if your care is funded by the council. That’s the rule.

• The top-up must be paid by someone else, usually a family member, a friend, or sometimes a charity. That’s why it’s called a “third-party” top-up.

• And it’s not a one-off payment. It’s a regular commitment, often weekly or monthly, and it can last for years. It may not always stay the same amount if the care home increases its fees for example. Would you want to agree to pay a mortgage that had no end date and no cap on how much it would cost? You don't want to agree to pay a third-party top-up either!

• You can ask the local authority to refer their financial assessment back to panel to see if they will increase the amount they are prepared to fund.

• You can argue that a particular home meets the specific needs of the individual requiring care and that no other home can do this. You might be successful with this argument and receive the funding the care home requires to meet its fees.

A real life example

Let’s say Margaret’s mum, Jean, is going into care. The council agrees to pay £700 a week, but the home they love charges £850. That extra £150 has to be paid by someone else; in this case, Margaret. She’s now signed a third-party top-up agreement with the council and takes on the responsibility.

If she ever misses a payment, Jean might have to move to a different home that fits the council’s budget. Imagine the stress that could cause for both of them.

Important things to know before you say yes to a third party top-up

If you’re thinking of agreeing to a top-up, here are some pointers:

1. It’s a legal agreement – You’ll usually sign a contract with the council. Read it. Ask questions. Don’t feel rushed.

2. It can go up – Care home fees may increase over time. Make sure you know whether your top-up will rise too and by how much.

3. It’s a long-term commitment – It’s important to consider whether you can afford the top-up not just now, but in a year, or even five.

4. Talk to the Council – They should offer at least one care home that doesn’t require a top-up. If they don’t, challenge it.

5. Life happens – If your circumstances change and you can’t continue paying, let the council know straight away. There may be options, but early conversations are always better.

   
   

My advice?

Top-ups can be the right choice, for the right reasons and the right families. Sometimes, peace of mind or comfort for a loved one is absolutely worth it.

But I’ve also seen people feel pressured, confused, or stretched too thin by top-up commitments they didn’t fully understand. That’s why conversations matter. A little advice at the right time can prevent big headaches later. You would take advice before signing mortgage documents or a legally binding contract. Do the same with top-up agreements. That's what we are here for!