Lancashire Country Council is to spend an extra £1.7million in payments averaging 6.3 per cent per resident.
The increased payments will be made to 340 Care Quality Registered establishments across the County Council’s 12 boroughs.
The rise will be backdated till April 1 and sees a minimum increase of 4.54 per cent for standard nursing care to £587.66 a week.
Nursing dementia placements will see the fee paid to providers rise by 16.04 per cent to £673.04 weekly.
Residential weekly rates will increase by 8.53 per cent to £416.72 for standard care, 8.58 per cent to £470.15 for higher care and 9.52 per cent to £504.35 for dementia care.
Cllr Martin said: “We are responding to representations from the care home providers’ national body.
“It is essential we pay enough to keep care homes viable and to ensure the highest standards for residents and their families.
“It is not as much as they asked for but is the most we could afford.
“Despite the cuts the county council is facing for the government, the care of Lancashire’s elderly residents is our top priority.”
Blackburn with Darwen council resources boss Andy Kay said: “We keep the fees we pay to nursing and residential homes for the care of elderly people under careful review.
“It is important that they remain viable and provide a high standard for residents.”