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Direct payments

If an assessment by a local council shows that care services should be provided, you or the person you are looking after, have a right to ask for a direct payment instead of having the service arranged by a local council

This cash payment allows you to organise care services yourself, enabling you to choose the services that are appropriate.  Some people use the money to buy care from an agency whilst others will directly employ their own staff, or pay members of their own family to do the care.

Personalisation and direct payments

One of the biggest shifts in care over recent years has been the rise of ‘personalisation’ – a new way to deliver support to disabled people, older people and carers.

Instead of directly providing services, such as home helps, local councils can now give cash directly to individuals to make their own care arrangements. The advantage of this is in giving people choice, flexibility and control. Some people will use the money to buy care from an agency whilst others will directly employ their own staff, even in some cases paying members of their own family to do the care. These cash awards are called "Direct Payments".

The decision to award a direct payment takes place after an assessment. This could be:

  • an assessment for the person you are looking after
  • an assessment for a disabled child under the Children Act
  • a carer’s assessment of your own needs (note: not available in Scotland)

If the outcome of the assessment is that services should be provided, you or the person you are looking after, have a right to ask for a direct payment instead of having the service arranged by the local council.

In most cases, the person receiving a direct payment has to have sufficient mental capacity to consent to it. However, they may still be able to have a direct payment even if they lack capacity, as long as they get help from someone else to manage the payment. In cases like this, as a carer, you may be asked to take on the administration of a direct payment.

Obligations of direct payments

If you receive a direct payment there will be various obligations. All users must keep records and submit accounts to the local council showing how the money was spent. In addition if you use the direct payment to pay for a care worker you will take on the legal role of an employer and all the responsibilities which go with that. In many areas help is available with these sorts of tasks.

If services arranged with the use of a direct payment run into difficulties, you cannot normally make a complaint to the local council in the way that you could if they had been arranged directly by them. However, in that situation you should expect some assistance and advice from the local council.

There are advantages and disadvantages to this way of sorting out care. You cannot be forced to accept a direct payment. If you would rather have services and not cash, then the local council must provide them.

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Frequently asked questions

What is a direct payment?

Direct payments are payments from the local council for people who have been assessed as needing help, and who would like to arrange and pay for their own care and support services. These payments are made directly to the disabled person (or to someone acting on their behalf), to arrange their own care package.

Who can get a direct payment?

Anyone who is assessed as needing care services has the right to request a direct payment instead of having those services provided by their local council. There are limited circumstances when direct payments are not awarded, however the majority of those already receiving, or those assessed as needing, services have a right to direct payments. These include:

  • older people who have been assessed as needing community care services
  • disabled people aged 16 and over, including those with short as well as long term needs
  • carers, in place of receiving carers’ services
  • families with disabled children
  • disabled parents
Are direct payments compulsory?

No. It is always the choice of the person receiving care (or the person acting on their behalf) whether to receive direct payments or continue getting services from the local council.

I am already receiving services from the local council – can I switch to direct payments?

Yes, you can ask the local council to change to direct payments.

As a carer, what involvement do I have with the direct payments for the person I look after?

It depends on the capacity of the person are looking after ie if they have sufficient understanding and memory to comprehend the consequences of managing the direct payment. If the person lacks mental capacity then you or another person who may be acting on their behalf, may be asked to manage the direct payment for them.

In some cases like this, the direct payment can be paid into a ‘user controlled trust’ (also known as an ‘Independent Living Trust’). The trust is used to manage money paid via direct payments but can include money from other sources. Trustees can include family members and/or professionals.

Children under 16 cannot receive direct payments in their own right but they can be paid to their parents who will manage them on their behalf. When a parent chooses direct payments the local council still has responsibility under the Children Act 1989 to assess and review the needs of the disabled child and family.

How much will the direct payments be?

The amount depends on the individual’s needs. Local councils should pay enough to cover the support that individuals have been assessed as needing, and users should not find themselves doing without those services because they cannot afford them.

However, a local council may only be willing to pay for the cheapest agency, which they deem as providing an ‘adequate service’, even though a more expensive agency better meets the needs of the disabled person. If those offered direct payments feel that the money offered is not enough, then they do not have to accept it.

What can direct payments be spent on?

Direct payments are given to buy services (including equipment) that the disabled person has been assessed as needing. The local council will set out what the money can and cannot be used for. Some people use direct payments to employ careworkers for personal care, others prefer to get help with domestic work like cleaning and laundry.

Although direct payments are designed to support independent living, and cannot be used to pay for permanent residential accommodation, disabled people may be able to use the money to pay for short breaks ie respite care. Local councils may also agree to allow users to combine support, so that some needs can be met by the local council, and others can be met through direct payments.

How much money will we get to pay a care worker?

There is no set amount. The person you are looking after will need to be sure that they are receiving an amount that will fully cover their costs, including insurance and administration, and a criminal records bureau check.

Does receiving direct payments mean being an employer?

It depends. If the money is used to employ a care agency then that agency will have responsibility for all employment rules and procedures for the staff providing care. However, if direct payment users take on staff directly, then they will be classed as an employer.

What does being an employer entail?

If the disabled person (or someone acting on their behalf) employs staff directly, those receiving direct payments are bound by all the laws that cover employment and would be responsible for things like payroll, workplace insurance, health and safety and recruitment.

While there should be some support available from local councils for general direct payment administration, by accepting direct payments the user accepts responsibility for the arrangement and administration of their services. If employing staff directly this can include a considerable amount of employment administration, such as payroll and recruitment. You may be able to get help with this through Independent Living schemes like the National Centre for Independent Living or local Independent Living projects.

What happens if the care worker is ill or away on holiday?

You need to plan emergency back up services to ensure the person you are looking after will have the care they need if the care worker is away.

Are there restrictions on who you can employ?

Yes. The money cannot usually be used to employ a spouse, partner or a close relative who lives in the same household as the person receiving care, close relatives who live elsewhere are usually permitted. The council can waive these restrictions in some circumstances and direct payment users should discuss the employment of family or partners with their council.

What checks are there on how you spend the money?

If the disabled person (or someone acting on their behalf) receives direct payments, they will need to account for the money spent. The local council will tell them what records need to be kept. Information they may have to provide could include timesheets signed by the workers or receipts for services from agencies.

I’ve tried a direct payment but I’m not happy with it, what can I do?

Direct payments are voluntary, and so the disabled person (or someone acting on their behalf) can change their mind about them. If that happens they should contact the local council as quickly as possible to discuss the matter and ask for services to be provided directly.

Is it the same across the UK?

No. Although direct payments are available everywhere the rules differ slightly in Scotland and Northern Ireland from the rules in England and Wales. For a booklet covering Scotland call 0141 445 3070, email This email address is being protected from spambots. You need JavaScript enabled to view it. or visit the Self Directed Support in Scotland website.

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Becoming an employer

The person you look after will become an employer if they use a direct payment from the local council to pay a care worker. If you are receiving direct payments on behalf of the person you look after, you may find this information about employing someone helpful. The employment contract is between them/you and the employee and does not directly involve the local council.

Many families welcome the freedom and flexibility this offers in their choice of care worker. They can interview and select the person they would most like to provide their care. In some cases they can employ someone they already know – a family friend, neighbour, or even a relative.

However, there are also responsibilities that go with being an employer. These are a few examples of what you would need to do:

  • Check the references of the intended employee.
  • Set up a system for paying wages and produce a wage slip.
  • Deduct income tax and national insurance contributions and keep appropriate records.
  • Find out if the intended employee has had an up to date Criminal Records Bureau (CRB) check.
  • Ensure that the employee has the annual leave they are entitled to under ‘Working Time Regulations’.
  • Do a health and safety check to ensure that there are no potential dangers in the disabled person's home.
  • Assess whether the care the disabled person needs, such as lifting, could put the employee at risk.
  • Make sure that the employee has suitable insurance cover.
  • Make sure you/or the disabled person and the potential employee both have employer’s liability insurance and public liability insurance – these are sometimes included in a comprehensive household insurance policy. For further information see
  • Account to the Inland Revenue for the deduction of income tax and national insurance contributions.
  • If the employee becomes ill or pregnant you will be liable for the normal payments that employers have to make. You must ensure your direct payment has enough of a 'contingency' element to meet all your legal responsibilities.

This is not a definitive list and people considering becoming employers must ensure they seek advice on their full responsibilities.

While this may seem daunting, in many areas of the country there are organisations which will help you with recruiting and the paperwork involved, including a payroll service. They will ensure all legal requirements are met and give you advice and help with recruitment. Ask your local council about this or contact the National Centre for Independent Living.

It is also possible to employ personal assistants through private agencies rather than advertise directly, although the costs will usually be higher. The agency may have taken to steps to check references, obtain a CRB check or ensure that the personal assistant has insurance cover, but you will need to confirm this with the particular agency you use.

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Employing a family member

If a person is getting a direct payment to pay for care they may decide to employ someone they already know, such as a family member or friend. There are rules around who you can and cannot employ using a direct payment.

The basic rule is that:

  • you cannot normally use the direct payment to pay a family member who is living with the person who needs care

If the family member is not living with the person it is possible.

In Scotland the rules are stricter and you cannot normally use a direct payment to pay any relative regardless of where they live.

The key phrase here is 'normally'. In exceptional circumstances it may be possible for the direct payment to be used to pay a relative who lives with them. In these cases you must give clear and specific reasons why only that family member can carry out the care. Religious reasons, language difficulties or specific health problems may be some of the reasons why ‘exceptional circumstances’ apply.

There will also be regional variations – some local councils have a relaxed approach to the rules around exceptional circumstances, others interpret them more strictly.

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Getting a direct payment as a carer

You as a carer can also get direct payments instead of receiving services directly from the local council.

Social workers are encouraged to be imaginative in thinking about the ways direct payments might be used and carers have been awarded them to pay for:

  • taxi fares
  • mobile phones
  • computers
  • gym club membership
  • leisure classes
  • training courses
  • counselling
  • driving lessons
  • help with housework or gardening
How do I get a direct payment as a carer?

The starting point is to get a carer’s assessment. See our webpage on carer's assessments for further information.

The assessment will look at how caring affects your life, including for example, physical, mental and emotional needs, and whether you are able or willing to carry on caring.

You should be told the outcome of the assessment and, if you are offered services, you should have the option of choosing between services arranged directly for you or receiving a direct payment to purchase your own services.

Is a financial assessment carried out?

The local council has the power to make a charge whenever services are provided, either directly or by direct payments.

  • As a carer the rule is that only your own resources are relevant when it comes to assessing your own direct payments, not the resources of the person for whom you are looking after.
  • Any paid earnings you have will not be taken into account. The guidelines explain that they should be disregarded in order to ensure that carers, who wish to do so, are able to work.
  • If you have a partner your share of joint savings will be taken into account as well as any resources to which you have a legal entitlement. Your partner’s paid earnings should be disregarded.
  • The guidance also explains how income from benefits should be treated. Local councils can include Carer’s Allowance in the charging assessment but are not obliged to do so.
  • When calculating your resources the guidance says that councils should take account of certain costs you may have incurred because you are caring for somebody. These include the cost of privately purchasing care where you need a short break or where the care is needed to enable you to maintain employment or fulfil your obligations as a parent. Other costs that can be taken into account include adaptations to your home (where the disabled person comes to live with you), additional transport or other costs such as extra laundry and cleaning.
I have been refused a direct payment – what can I do about it?

Despite government guidance about the important role direct payments can play in improving the quality of life of carers, some local authority staff are still slow to implement them or fail to use them in innovative ways. Some carers have been told that ‘we only give direct payments so you can pay care workers’ or ‘you can’t have one for a mobile telephone, yoga class etc’.

If this is your experience, we have the following suggestions:

  • Explain again to your local council just how important the direct payment would be for you. The art class or help with taxi fares may be vital to you to prevent your health deteriorating or your morale falling. It could be a very cost effective way for the local council to help you carry on looking after the person you care for.
  • It is usually best to put this in writing and if you need any help with this, contact your local carers' organisation, advocacy service or Carers UK's Adviceline on 0808 808 7777 to be signposted to local help.
  • If you cannot resolve the matter within a reasonable period of time you may want to make a formal complaint, using the local council statutory complaints process.
  • If that is unsuccessful it may be possible to appeal further to the Local Government Ombudsman.
Tips for negotiating a direct payment
  • Look at your local council’s website, or ask for printed information about the services they provide. and see what it has to say about direct payments for carers.
  • Find out if you can from others what direct payments they have been awarded – your local carers centre would be a useful starting place.
If I receive a direct payment will it affect my social security benefits?

No, the direct payment will be disregarded and will not affect any social security benefit you receive.

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