How do third party top-ups for care home funding work?

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If you move into a care home that costs more than the local authority will pay, and you’re getting help from the local authority with your care fees, you may have to pay a top-up. Except, the rules say that the person who’s getting care can’t pay the top-up.  Instead, someone else (a third party) has to pay it. Find out more.

Third party top-ups explained
If your parent or other relative has to move into a care home, and they qualify for local authority means tested funding, the local authority will normally have a rate that they will pay care homes. This means that if the care home you want your parent/relative to move into costs more, a third party top-up may be needed.

Third party top-ups
These payments have to come from someone other than the person receiving care. They can come from a charity or from a relative, but the person who’s in a care home isn’t allowed to use their savings.

SAVVY TIP: The only exception to this is in the first 12 weeks of care, when the person who’s in a care home is able to make a top-up contribution from their own savings.

Do you have to pay?
There are situations where you may not have to pay a third party top-up, even if the care home you want to move your relative to charges more than the local authority rate. There are two ways you can challenge a local authority that asks for a third party top-up.

1. At the assessment stage. If you ever need care, you can get an assessment from social services of your needs and you’ll be given a financial assessment (so they can work out if you’re entitled to any local authority help). Lisa Morgan of law firm Hugh James says that if you’re entitled to means-tested help, you can challenge at the assessment stage. “A council does have the discretion to pay a care home more than the ceiling. It’s not a limit that’s set in stone.”

SAVVY TIP: Lisa Morgan also says that you may be able to argue against having to pay a top up if your relative is in a care home that they’d previously paid for. “If your relative was paying their own care home fees and they’ve used up their savings so they now qualify for means-tested care, you can challenge the local authority on the basis that it would be detrimental to your relative’s health to move them to a cheaper home.”

– If your relative’s needs could only be met in a more expensive home. Janet Davies, from care fees planning network Symponia says this normally applies in specific circumstances. “If, for example, your relative has Asperger’s syndrome and dementia, you would be able to argue that they need specialist care, which the local authority should have to pay for.”

Paying third party top-ups
If you have a relative who needs to have top-up fees paid, there are several sources that could provide financial assistance. But if they can’t help, you (or another relative) may have to pay if you don’t want your relative to move to a cheaper home.

– Charities. There are a number of occupational charities (especially related to the armed forces), which may be able to help with funding. They are definitely worth approaching and it may also be worth asking relevant health charities

Proving you can pay the top-up
If you’re planning to pay top-up frees, you will have to show you have the means to pay as the local authority will want to know that you can afford it.

SAVVY TIP: If you pay top-ups for a relative, you’ll have to sign an agreement to say that you’re happy to pay it, says Janet Davies of Symponia.

Funding options
If you are worried about committing to paying a top-up when you don’t know how long your relative will live for, there are two options.
You could consider using an ‘immediate care plan’.

– Here, you pay an insurance company a lump sum. They pay the top-up amount for as long as your relative is alive and in a care home.

– Premium levels are based on the life expectancy of your relative. It all sounds a bit grim, but the insurance company will work out how long it expects your relative to live based on health information.

– The application process will take some weeks. If you want to apply for a policy to pay a relative’s top-up fee, the insurance company will want detailed information about their health from their GP. Janet Davies says that some GP practices are much speedier than others at supplying this information

SAVVY TIP: The other option is to negotiate with the care home. The care home isn’t obliged to negotiate with you, but it may be willing to do so, especially if it has spaces and/or cheaper rooms available.

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