Understanding direct payments
If you, or the person you are looking after, have been assessed as needing social services support from your local council or trust, you may be offered a direct payment instead of receiving the support arranged by the local council or trust. We look at what direct payments are and how they work.
What are direct payments?
Generally, direct payments for carers are a one-off payment given to support the carer to have some time to look after their own wellbeing. For example, the payment could be used to go to the gym, or pay for driving lessons or a break away. These are sometimes called a carer direct payment or carer budget payment.
Direct payments for the person being looked after are more commonly ongoing payments used to employ a care worker or personal assistant to help with their day-to-day needs or for a period of respite care. These payments are instead of having those services provided directly by the council or trust.
For both types of direct payment, an assessment needs to be carried out first and agreement reached on what can be funded.
Following a financial assessment, you may have to pay a contribution towards your personal budget. This will depend on your income and savings.
You can then ask your local council or trust to:
- manage your personal budget for you, in line with your wishes
- pay the money to another organisation to manage for you
- give you the money as direct payments to spend on meeting your needs.
You can also choose a combination of these options.
With direct payments you can choose and purchase the services you need, as agreed in your care plan or support plan for carers. If you care for your child who has a disability, you can receive direct payments to pay for the services or support your child needs.
Note that in Scotland, carers can’t get direct payments. However, the person you care for may be eligible for them, so the information on this page may still be useful.
Before agreeing to you receiving direct payments, the local council or trust must be sure they’re right for you and that you (or someone appointed on your behalf) can manage them.
Think carefully about choosing direct payments. They can give you more freedom and choice, but also come with more responsibility.
Talk to your local council or trust about what direct payments can and can’t be used for, how you intend to spend them, when payments will start, and anything else you need to know about how the arrangement will work.
Before requesting a direct payment (or being offered one), you would first need to have an assessment from the local council or trust. The assessment and the process will differ depending on if you are the carer or the person who receives care.
Many carers' centres now carry out carers' assessments on behalf of the council or trust, or you could be sent a form to complete, setting out your needs as a carer. It’s worth getting in touch with your local carers' centre for more information.
The assessments for the people you care for are usually carried out directly by the local council or trust. See our country-specific factsheets for detailed information on assessments where you live.
If you, or the person you are looking after, are assessed as needing support, then the local council or trust will work out how much it would cost to provide such support (generally called a personal budget). This is then broken down into any amount you or the person you are looking after might have to pay (if anything) and any amount the local council/trust has to pay.
You can then choose to ask the local council or trust for a direct payment or you can ask them to arrange the support themselves. A direct payment is the amount of money that the local council or trust has to pay to meet your needs or those of the person you are looking after. It is provided to enable you or them to purchase necessary services to help with your support needs and/or their care needs (as assessed by the local council/trust).
Sometimes, it is possible for the person you are looking after to pay you or another family member or friend to meet their needs. See 'Can a family member be employed to help?' below for further information.
Although most people will be given a direct payment if they ask for one, there are some categories of people who cannot get a direct payment, for example those under various orders or treatments for drug or alcohol dependence.
If the person being assessed does not have mental capacity, or does have mental capacity but would be unable to manage a direct payment, someone can be appointed to manage the direct payment on their behalf.
Note: If you or the person you are looking after already receive support from the local council or trust but would like to receive a direct payment instead, you can ask them to make this change.
Note: Direct payments are not compulsory and if you would rather the local council/trust arrange the support, they should do so. It is also possible to have a combination of support from the local council/trust and direct payments. Often carers are offered a one-off carer's direct payment instead of having the option of directly supplied services.
The direct payment must be enough to meet your needs. Carers are not asked for a contribution towards their carer's direct payment.
If the person you are looking after uses the direct payment to employ a care worker, there might be additional costs involved (ie recruitment costs, auto-enrolment pension costs, National Insurance and Income Tax cost). If so, the direct payment amount must be sufficient to cover these costs in addition to the wage paid to the care worker.
Example: You are a carer and your local council assessed you as needing ‘help with the cost of driving lessons to help you continue in your caring role’. You could ask for a direct payment to meet this need, using the direct payment to pay for a driving instructor.
Example: The person you’re looking after is assessed as needing ‘a care worker for an hour a day’. They could ask for a direct payment to meet this need, and use it to employ someone of their choice (if the local council or trust agree that this person is suitable).
Direct payments will usually be paid into your bank account every four weeks.
If the person you’re looking after receives direct payments, they may want to employ someone they know to meet their care and support needs. However, it’s important to know you can’t normally use direct payments to employ a close family member. The rules around this are different depending on where you live. To find out more, contact your local council or trust.
You will have various responsibilities if you receive a direct payment.
You should keep a record of the money you’ve spent so you can show the local council or trust, so keep receipts and copies of all related payments. Most will ask for evidence every three months. The local council or trust should explain what the monitoring process is.
The person you’re looking after may want to use their direct payments to pay for a care worker. Depending on how they hire one, they may have responsibilities as an employer. See ‘Employing a care worker’ below.
If the person you are looking after does want to employ a care worker and wants to know how to find local care workers, they could ask their council or trust if they hold any information on individual care workers, or they could place a job advert on a reputable website like Universal Jobmatch.
If the person you are looking after employs a care worker directly (even if this is a family member or friend), then they will be taking on the responsibilities of an employer.
This can seem daunting. However, in most areas there are organisations that can help with these responsibilities. You can ask your local council/ trust as well as your local carers’ centre about the organisations in your area.
Some examples of employment responsibilities:
- Check the references of the intended employee and find out if they have had an up to date Disclosure and Barring Service (DBS) check.
- Make sure the intended employee has the right to work in the UK.
- Set up a system for paying wages, deducting tax and National Insurance and keeping records for the Inland Revenue.
- Make sure that the employee has the annual leave they are entitled to under ‘Working Time Regulations’, any maternity/paternity/sick pay they are entitled to and ensure you comply with auto enrolment duties - the Pensions Regulator has more information.
- Do a check to ensure that there are no potential health and safety risks to the employee because of the care they will be providing, as well as removing any potential dangers in your home that could put them at risk.
- Make sure that you have suitable insurance cover (ie employer’s liability insurance and public liability insurance).
This is not a definitive list and if the person you are looking after is considering becoming an employer, they should seek advice on their full responsibilities.
These websites also provide helpful information about employing care workers:
- Being the Boss is a peer support website run by disabled people who aim to share knowledge, support and information around employing personal assistants.
- ACAS provides advice and information on what to consider when employing others, as well as information on job applications and hiring.
- England only – Skills for Care has an information hub which offers guidance and tips about employing your own personal assistants, as well as offering details of local support services.
- Wales only – Dewis Cymru provides advice and information on direct payments and on employing personal assistants. Social Care Wales has also produced a useful resource covering good practice called Direct payments: a guide.
- Scotland only – The Scottish Personal Assistant Employers Network (SPAEN) is a membership organisation that supports people with disabilities and/or long-term conditions or impairments to use a direct payment to employ personal assistants. They offer a range of supports and services to enable people to engage their own staff.
- Scotland only – Self-Directed Support Scotland is a one one-stop-shop for information about self-directed support (including direct payments) for people who use social care services. It provides information about direct payments and links to local support organisations that can help you decide about employing care workers and to set up and manage your direct payment.
- Northern Ireland only – The Centre for Independent Living provides advice and information on getting direct payments, using personal budgets and employing carers and personal assistants.
If they prefer not to have the responsibility of being an employer, the person you’re looking after can use an agency to find a care worker.
There are different ways to find care agencies. Your local council or trust could provide a list. Or contact the care regulator in your nation for an online directory of registered care services:
- in England, contact the Care Quality Commission
- in Wales, contact the Care and Social Services Inspectorate Wales
- in Scotland, contact the Care Inspectorate
- in Northern Ireland, contact the Regulation and Quality Improvement Authority.
Direct payments aren’t counted as income for any benefits you receive, and so would not affect any of your benefits.
However, if the person you’re looking after pays you with their direct payments, then this would count as earnings. This might affect any benefits you receive.
The process of requesting assessments will differ depending on where you live so download our country specific factsheets about assessments to find out more.