Care Home Top-Up Fees Explained

What is a care home top-up fee?

A top-up is an extra amount paid on top of the council's contribution so that someone can live in a home that costs more than the council would ordinarily fund. It only comes into play once the local authority is meeting some or all of the care costs. The council pays up to the level of the person's assessed personal budget, and the top-up covers the gap to the chosen home's fee.

Who can pay a care home top-up?

Usually a third party pays it, such as a relative, friend or sometimes a charity, rather than the person receiving care. The person in the home is generally not allowed to fund their own top-up from the capital that has been disregarded in the means test, though there are limited exceptions. The council must be satisfied the payer can keep the payments going for as long as they are needed.

Who pays	What it covers
Local authority	Up to the assessed personal budget for meeting eligible care needs
The person in care	Their assessed contribution from income and capital, after any allowances
Third party (top-up)	The gap between the council's contribution and a more expensive chosen home

Who pays

What it covers

Local authority

Up to the assessed personal budget for meeting eligible care needs

The person in care

Their assessed contribution from income and capital, after any allowances

Third party (top-up)

The gap between the council's contribution and a more expensive chosen home

The person's own means-tested contribution is worked out under the charging rules, where the upper capital limit is £23,250 and the lower capital limit is £14,250 (gov.uk, local authority circular, as at July 2026, subject to change).

When do top-up fees arise?

Top-ups only become relevant once a council is funding a care placement, which follows the financial assessment. Where someone's capital is above the upper capital limit of £23,250 they are generally treated as a self-funder and arrange care directly, so a formal top-up does not usually apply. Below that limit the council contributes, and a top-up may be needed if the family prefers a home that costs more than the council will pay (gov.uk, as at July 2026, subject to change).

Between the upper and lower capital limits, the person also pays a means-tested contribution from their own capital, assessed as a tariff income of £1 per week for every £250 of capital in that band (gov.uk, as at July 2026, subject to change). A top-up sits on top of that, and is a separate payment made by someone else.

For how capital and income are assessed, see our note on the means test.

The council must offer a home with no top-up

A top-up should be a genuine choice, not a requirement forced on a family. Where a council is meeting someone's eligible needs, it must be able to offer at least one suitable placement that meets those needs at the person's personal budget, with no top-up payable. A top-up is only for choosing a more expensive alternative, and it should never be the only way to meet assessed needs. If no suitable option is available at the budget, that is generally a matter for the council, not the family.

A worked example (illustration only). Suppose a council assesses that a suitable care home place can be met for a set weekly personal budget, and the family prefers a home that charges more per week. The council should still offer at least one home that meets the assessed needs with no top-up. If the family choose the dearer home, a relative might agree a third-party top-up to cover the weekly difference. The person's own contribution is worked out separately under the charging rules, using the upper capital limit of £23,250 and the lower limit of £14,250 (gov.uk, as at July 2026, subject to change). Real figures and availability vary by area, so this is general information rather than a calculation for any real placement.

The risks of agreeing to a top-up

A top-up is an open-ended commitment, and home fees tend to rise over time. If the third party can no longer keep up the payments, the shortfall does not simply disappear. The council may look to move the person to a home it can fund at the personal budget, which can be unsettling, or arrears may build up. Because of this, many people ask for the written agreement, the review points and the consequences of stopping to be spelled out before they sign. Where the person owns a home, some families also look at whether deferred payment agreements could ease the immediate cost instead.

Rising fees. Homes usually review prices, so a top-up may grow year on year.

Sustainability. The council must be satisfied the payer can maintain it, and a break can mean a move.

Written terms. The agreement should set out the amount, reviews and what happens if payments stop.

Giving assets away to reduce care costs

It can be tempting to give away savings or a home in the hope of falling below the capital limits, but councils can look behind such gifts. Where a council decides someone has deliberately deprived themselves of assets to reduce a care charge, it can assess them as though they still held the money, a rule known as deliberate deprivation of assets. Deliberately giving assets away to sidestep care fees can be challenged, so this is not a reliable route. Sensible estate planning guide work focuses on limiting the impact of care fees within the rules, and it can be worth discussing with a qualified professional before acting.

Top-up fees in Scotland and Northern Ireland

This guide describes England. The framework differs across the UK. Scotland operates its own charging system, including free personal and nursing care contributions set by the Scottish Government, so the way top-ups and capital limits work is not the same. Northern Ireland and Wales each set their own charging rules and thresholds too. If a placement or a family spans more than one nation, it can be worth checking the local rules and taking advice in the relevant area.

Frequently asked questions

Who is allowed to pay a care home top-up fee?

A top-up is usually paid by a third party, such as a relative, friend or charity, rather than the person receiving council-funded care. In most cases the person in the home cannot fund their own top-up from disregarded capital, though limited exceptions exist. The council must be satisfied the payer can sustain the payments for as long as they are needed.

Can the council make me pay a top-up?

Generally no. Where a council is meeting someone's assessed needs, it must be able to offer at least one suitable home at the person's personal budget with no top-up payable. A top-up should only apply where a family chooses a more expensive home. If you are told a top-up is unavoidable, it can be worth asking the council to confirm the no top-up option in writing.

What happens if we can no longer pay the top-up?

If a third party stops paying, the shortfall does not vanish. The council may review the arrangement and, where needed, look to move the person to a home it can fund at the personal budget, or arrears may build. Because a break can be disruptive, many families ask for the review points and the consequences of stopping to be set out clearly before agreeing.

Do top-up fees apply if I am a self-funder?

Not in the same way. Where capital is above the upper capital limit of £23,250, a person is generally treated as a self-funder and arranges care directly, so a formal council top-up does not usually arise (gov.uk, as at July 2026, subject to change). Top-ups mainly feature once the council is contributing to the fees.

Can I give money away to get below the capital limit?

Deliberately giving away savings or property to reduce a care charge can be treated as deliberate deprivation of assets, and the council can assess you as though you still had the money. Deliberately giving assets away to avoid care fees can be challenged, so it is not a reliable route. Planning to limit the impact of care fees is better discussed with a qualified professional.

Is NHS care means-tested like a top-up?

No. Where someone qualifies for NHS Continuing Healthcare, their care is arranged and funded by the NHS and is not means-tested, so capital limits and top-ups do not apply (nhs.uk, as at July 2026, subject to change). Eligibility depends on assessed health needs rather than income or savings, and it is worth exploring where needs are complex.

About Fairchild Oldfield

The Fairchild Oldfield team brings together estate planning, tax, independent financial advice and client care, working with families across England and Wales.

Fairchild Oldfield are estate planning specialists and will writers, not a firm of solicitors. This article is general information based on practical experience, not legal, tax or financial advice.

Important: This article is general information only and is not legal, tax or financial advice. Reading it does not create a professional relationship. It is based on the law of England and Wales, and other UK jurisdictions may differ. Figures and rules are current as at July 2026 and are subject to change. Before acting, many people choose to seek advice from a suitably qualified professional, such as a solicitor, a STEP practitioner, an accountant, or an FCA-authorised financial adviser, who can consider your individual circumstances.