TOP-UP FEES – Unfair Care Home Practices Now Face Government Sanctions

TOP-UP FEES – Unfair Care Home Practices Now Face Government Sanctions

We have recently featured blogs and advice regarding top-up fees, “Are You Paying  Top-Up Fees Unnecessarily?”. Now, coincidentally, the competition watchdog – Competition and Markets Authority (CMA) – has just published new guidance on 16th November 2018 to ensure care homes understand and comply with their responsibilities under consumer law. The guidance, “Care homes: consumer law advice for providers”, gives greater protection for residents in care, and includes a helpful section dealing with payment of top-up fees.

The new Government backed consumer guidance is aimed at care homes, and seeks to improve standards of care, provide greater transparency about contracts and charges, and eradicate unscrupulous and unfair care home practices – ripping off and taking advantage of the elderly and vulnerable, going into or already in a care home.

Care Minister Caroline Dinenage said: “It is a scandal some of the most vulnerable people in our society are being taken for a ride by a minority of unscrupulous care home providers. Everyone living in a care home should be treated fairly and with respect.”

The guidance applies specifically to people over 65 in care homes and covers the whole of the UK, irrespective of whether residents pay their own fees from private funds or are state funded.

The CMA Guidance is 147 pages long and you can download the link here for more in-depth reading.

The effect of this guidance is that care homes will need to reconsider their contractual terms, policies and practices and make changes where necessary to ensure compliance.  Care homes that do not meet these standards may face criminal prosecution, and enforcement or legal action by the resident, the CMA or Local Authority Trading Standards Services, resulting in fines or the care home paying a refund.

Which? have provided a useful Checklist of questions and areas you should consider before choosing the right care home for your relative.

If you have a relative in care or about to go into care, we would recommend that you read the CMA guidance in detail.

A brief summary of the key areas of the new guidance that care homes should provide are set out in Paragraph 1.5 below, with our comments:

Upfront information – what information you should provide to prospective residents and their representatives, and when and how you should do so.”

Care homes should provide clear and accurate information in their publicity and promotional material to enable potential residents to make an informed choice before accepting a placement. Publicity must not be misleading. and Contractual terms and conditions should be made easily accessible and available to potential new residents, in a timely manner in advance, to enable the contractual terms to be considered.

“Treating residents fairly – what you should do to ensure that your contract terms and the way you treat residents are fair under Consumer Law.”

Choosing to go into a care home is an emotional time, and care homes should not seek to take advantage when families are most vulnerable. Contracts should be fully explained and be easy to get hold of and understand, and not be misleading or contain hidden traps for the unwary.

“Quality of service – how to comply with your obligation to perform your services to residents with reasonable care and skill.”

“Complaints Handling – what you should do to ensure that your complaints handling procedure is easy to find, easy to use and fair.”

Care homes should have an accessible and easy to follow complaints procedure if you are unhappy about any aspect of their service.

In short, care homes must be transparent about their contractual terms and charges, and the information they provide before making a placement offer – which brings us on to the topic of top-up fees.

Top-up fees are back on the agenda

Top-up fees is a contentious and often misunderstood issue, and has been the subject of our recent blogs. Care homes will never admit if their charges are unlawful. But now, the issue of unlawfully charged top-up fees has been bolstered with consumer law backing.

Local Authority funding

As a quick reminder, top-up fees usually relate to the cost of accommodation.

Pages 99 to 104 of the guidance, specifically mention top-up fee arrangements for Local Authority funded residents i.e. where the local authority (through Social Services) have a duty to meet the cost of your relative’s assessed needs. But, if you want to choose a more luxurious room with better amenities in the care home, then you may have to pay the extra cost (top-up) yourself, if it exceeds the Local Authority rate for that accommodation.

Breach can result in legal action and enforcement sanctions.

Any agreement regarding a top-up payment “must contain clear, accurate and unambiguous information about the arrangement.  Examples are given as to how much the top-up payment will be:

  • How and when the payment will be collected;
  • How often it will be reviewed;
  • The circumstances when the top-up payment might change;
  • Consequences of failing to make top-up payments;
  • What will happen to residents if they cannot afford to meet the top-up payment.

Each situation depends on its own facts, but here are some examples under the new CMA guidance of potential breaches of consumer law. A breach can occur if the care home:

  • Asks a resident to pay a large upfront non-refundable sign on fee (in whole or in part) prior to becoming a resident.
  • Fails to agree any top-up fees should in advance and in writing with the Local Authority and the paying party.
  • Fails to contact the Local Authority to request additional fees to cover any shortfall in a resident‘s assessed needs.
  • Fails to tell a resident about the option of covering the shortfall through an arrangement with the Local Authority, but simply tries to impose payment upon them instead.
  • Insists on a resident making up any shortfall as a ‘condition’ of moving into the care home.
  • Asks for a top-up payment without the knowledge and agreement of the Local Authority.
  • Increases its annual fees, but not in accordance with the resident’s contract with their Local Authority.
  • Fails to give fair and transparent information so that the resident knows how any future fee increases will be calculated.
  • Continues to charge fees for an unreasonable period after death ie more than 3 days (or a ‘backstop’ period of up to 10 days to clear possessions).

NHS Continuing Healthcare Funding – Pages 104 to 107 of the guidance deal with residents in receipt of NHS Continuing Healthcare Funding (CHC).

As we have previously explained in our blog, “Are You Paying Top-Up Fees Unnecessarily?” residents who are in receipt of NHS CHC should not be asked to make top-up payments towards the cost of their clinically assessed healthcare needs. These clinical needs should be met in full by the Clinical Commissioning Group, and it is unlawful for a care home to charge top-up any fees relating directly to these healthcare needs.

However, payment for personal luxuries or ‘wants’, often referred to as ‘lifestyle’ or ‘hotel style’ choices – such as a larger room with a better view or an en-suite bathroom, chiropody, beauty salon/spa treatments etc. which are not part of the individual’s clinically assessed healthcare plan, but are taken as a matter of personal choice – should be paid for privately.

Under this new guidance, it will be considered a breach of consumer law if a care home inappropriately charges top-up fees.

The guidance says that a care home should not require or pressure an individual who has CHC funding into purchasing additional services as a condition of moving into or staying in the care home. Some more examples of infringements are given in paragraph 4.134 below:

“4.134 Where you seek to make such charges, this is likely to infringe consumer law, for example, by:

(a) Asking a resident or their relative for a one-off payment to cover some of your business or care costs.  

(b) Demanding a regular top-up to the weekly fee to cover a claimed ‘shortfall’ in the CHC funding (either as a condition of moving into the home or as a condition of staying in the home). 

(c) Asking a resident to sign an agreement (or to be invoiced) for the provision of additional private services, when these are not in fact provided and the true purpose of the payment is to cover a claimed ‘shortfall’ in the CHC funding.”


Although the National Framework for NHS Continuing Healthcare and NHS-funded Nursing Care has been in existence for some years, it is encouraging to see that the Government has now intervened and taken steps to bolster residents’ rights by providing consumer guidance to care home providers through the Competition and Markets Authority. The various breaches or infringements of consumer law can give rise to legal action.

But, the guidance relating to top-up fees – particularly with regards to NHS CHC funded residents, does not really say anything different than NHS National Framework, but it does give some legal bite to make care homes act and think more responsibly and transparently towards its elderly and vulnerable residents. Consider legal advice if you have been wrongly charged top-up fees.

For further reading


  1. Marc Cherry 1 year ago

    Hi my mother passed away on Sunday 7th April in her nursing home she had spent two of 7 days in hospital so had 5 days of care in home & was quite glibly told by the owner I would have to the full £3875 care for the month. Daylight robbery five days care for price of 30!

  2. Diane 2 years ago

    I just want to thank Care to be Different for bringing to my attention the new Government guidance to care homes on Consumer Law and contractual transparency. I have just spent the past year battling my father’s nursing home over funded nursing payments which they were adamant they were entitled to keep and not reflect in my father’s care home charges. I have involved the social care ombudsman and he has found in my favour. Without this knowledge from Care to be Different I would not have had the ammunition to fir at the care home or conviction to involve the ombudsman.

    I have wanted to ensure that the care home changes its practice which so far they have been reluctant to do and now the government has had to step in describing the situation as scandalous. This 149 page document describes the many practices that culminate in the deception of the elderly and vulnerable and their relatives who are facing an uphill battle in fighting to get their rights acknowledged.

    Please could everyone in this situation check the government info and their contracts with their nursing homes and protect your relatives rights, many of whom are suffering dementia and not able to recognise what is happening.

    Also could Angela please let me know if the ombudsman has now found in my favour can I still go further with the CQC and Trading Standards to pursue my case further in order the care home to change its practice. As I have mentioned they have been reluctant to do anything to change as far as I can see and I am doing this for others not just my family. Diane

  3. Mark Marsay 2 years ago

    does it deal with local authorites who stand between the care home and self funders, where the LA charges the self funder (after putting them in care against their wishes) and then pays the care home?

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