Top-up fees are the difference someone chooses to pay for a loved-one’s stay in a care home over and above the amount the council has agreed to pay.
The Local Government and Social Care Ombudsman says councils have a duty under the care act to administer top-up fees, with the LGO saying it provides “the best security for vulnerable people” if any problems occurred with payment.
However, Lincolnshire County Council was using care homes to carry out the function.
The authority argued this was allowed, and that it would cost too much to administer the fees directly.
However, the Care Act does not recommend using agents to carry out the function.
It says direct payments must only be carried out with the consent of the people involved and the care home.
The Ombudsman warned that leaving top-up fee contracts to be agreed directly between people and care providers leaves people vulnerable to the risk of fee increases and devolves the responsibility to collect unpaid fees to the care provider sector.
Dudley Council was also told off by the ombudsman for similar actions.
Michael King, Local Government and Social Care Ombudsman, said: “The reasons both councils have given for departing from the Guidance – the financial cost of doing things properly – is irrelevant.
“At the heart of the matter, we have two councils absolving themselves of their responsibilities to offer the public its basic protections set out in law.
“We also issued guidance to councils back in 2015 on administering these fees, and were quite clear that leaving the administration of top-up fees to care homes was wrong.”
Both councils have been told to review their procedures.
Glen Garrod, executive director for adult care and community wellbeing at Lincolnshire County Council, said the authority had made “great strides” over the last year in developing its systems and processes to improve its customers’ experiences around financial assessments.
“We continue to implement a programme of improvements and, as part of an already planned review, over the next four months we will consider the position of third party top-up fees in accordance with the Ombudsman’s recommendations,” he said.