Direct payments – arranging and paying for care

Money Advice Service

Paying for care services (for yourself or someone you’re caring for) with direct payments from your local council gives you independence, choice and control. But managing a care budget is also a responsibility.

What are direct payments?

If your local council (or your Health and Social Care Trust in Northern Ireland) agrees to fund some or all of your care services, you’ll be offered the choice of:

  • The council providing services directly to you
  • Receiving direct payments from the council, and arranging and paying for care services yourself

If you choose to accept direct payments from the council, you can always change your mind later on, and ask the council to provide services to you directly instead. You might do this if you were finding it difficult to manage the payments, for example.

Are direct payments means tested?

Yes – how much you get depends on your financial circumstances, and you might need to top them up with money of your own.

Getting a social care assessment

To receive direct payments, you first need to contact your local council or trust to ask them to assess your care needs.

How do direct payments work and what can you use them for?

Direct payments go straight into your bank, Post Office, building society or National Savings account, but you can’t just spend the money on anything.

The council has to be satisfied that the payments are going towards the care services agreed in your care plan.

A care plan is a written agreement between you and your health professional and/or social services to help you manage your health and wellbeing day to day.

The care plan is based on what you want, so you’re in control.

You can have a care plan review at least once a year. You can also ask for a review if you feel the care plan isn’t working or if other things in your life change.

Direct payments could be for you if:

  • you want to retain or take control of your own care and support services
  • you want more choice in selecting the products and services that meet your specific needs
  • you’re confident with money and paperwork or have people to support you with this
  • you’re happy to keep receipts and invoices and submit these to social services on time

Direct payments are probably not for you if:

  • you’re uncomfortable about being an employer – you might need to manage the people who care for you, although help to make these arrangements is available
  • you’re not confident about keeping careful records and safely filing important documents such as receipts, although help to make these arrangements is available
  • you spend frequent or long periods in hospital
  • you’re happy to let your local authority provide you with care services

How much will I get as a direct payment?

The direct payment must be enough to meet the needs that your local council has assessed you as having.

If you use your direct payment to pay for a care worker, there may be extra costs involved (for example, recruitment costs, employer pension contributions, income tax). The direct payment must be enough to meet these costs.

However, depending on your financial circumstances, you might have to contribute towards the cost of your care. This will be decided by a local authority means test or financial assessment.

How to apply for direct payments

If you already receive care services, ask your local council about direct payments.

If you’re applying for care services for the first time, your social worker should discuss the direct payments option with you when they assess your care needs.

If you live in England, Wales or Scotland apply for direct payments via the GOV.UK website.

Managing direct payments to pay for care

If you’ve opted to receive direct payments, the next step is to work out which providers and services you’d like to use.

There are rules set out by the local authority to make sure that everyone does this in a safe and fair way.

  • You must keep receipts to show how the budget is spent and show these to social services if they ask you to.
  • You must only spend the money on care and support services that meet the specific needs agreed in your care plan.
  • If you can’t account for everything you spend, or you use the money for things not in your care plan, you could be asked to reimburse your local authority.
  • You can’t use direct payments to pay for informal care from a spouse, partner or close relative who lives with you, unless they’re registered as a carer.
  • You can’t use direct payments to pay for permanent residential accommodation, but you might be able to use them to pay for occasional short periods in residential accommodation if your council agrees that is what you need.

The rules for direct payments vary around the country.

Speak to your social worker or contact your council to find out how regional variations affect you.

Get support to manage direct payments

Your local authority can provide support with managing your direct payments.

Alternatively, many local voluntary organisations and social enterprises provide tailored support with managing your direct payments and putting together your care plan. These organisations are independent from the local authority.

For example:

  • Disability Rights UK (formerly the National Centre for Independent Living) has a helpline, which offers advice about direct payments and employing a carer.

If you’re in Northern Ireland, you might also want to:

If you can’t manage your own direct payments

If you can’t manage your own finances, direct payments can be paid into a trust and managed by the trustees who could be family members, friends or professionals.

Read our article on setting up a trust.

Using direct payments to employ a carer

If you use your direct payments to employ a carer, you’ll take on certain responsibilities as an employer.

That means you’ll have to think about tax, National Minimum Wage, sickness and holiday pay, pension, and liability insurance.

If that sounds a bit daunting, there are people and organisations that can help:

  • Look at local firms who offer payroll services. They’ll handle tax and National Insurance contributions for a fee.
  • Think about using a home care agency rather than employing someone yourself. They’ll deal with all the paperwork, including references and criminal checks, and invoice you directly.
  • Speak to a Carers Direct helpline adviser on 0300 123 1053 if you would like help with finding local support.

Ask your social services department about local home care agencies and check them out with the relevant regulator:

Comparing products and services

Even if you’ve decided to purchase care and support products and services yourself, you can still ask social services for help and advice. They’ll be able to tell you about local providers and preferred suppliers, so you can shop around for the best deal.

Keeping records of what you spend your direct payments on

If you receive direct payments you’ll need to keep track of the money you spend.

Your council will tell you what information you’ll be expected to provide (such as timesheets signed by carers, receipts for equipment or invoices from home care agencies), as well as how and when to submit this information to them.

You might want to set up a bank account specifically to receive your direct payments and pay for care. If you do this, it’s easy to keep track of your spending and you can then submit the full bank statement to your local council.

What to do if your circumstances change

Top tip

Don’t delay in telling your council or trust about a change in circumstances – it could mean you get more money.

If your needs change, contact your council as soon as possible so that they can reassess the level of payments you need – you might be entitled to more money.

Alternatively, if you don’t need to spend the full amount because your condition improves temporarily, or you go into hospital, they might need to reduce your payments.

If you don’t want to continue with direct payments

If you decide you don’t want to manage direct payments yourself any more, your council has a legal duty to arrange services instead.

Similarly, if the council decides you can’t manage with direct payments, they might decide to provide services directly if there isn’t anybody close to you who can take over managing the payments.

This article is provided by the Money Advice Service.

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Some important information about Rest Less Money

We want you to understand the positives, but also the limitations of using our site. We operate in a journalistic manner and therefore all information, guidance or suggestions provided are intended to be general in nature, and you should not rely on any of the information on the site in connection with the making of any financial decision.

When we set out to build Rest Less Money, we wanted to be a trusted place where you could find helpful information about financial matters affecting the over 50s. As a free to use resource, we try hard to provide the best information we can, but we cannot guarantee that we won’t occasionally make mistakes. So please note that you use the information on our site at your own risk, and we can’t accept liability if things go wrong.

Key things to remember when using Rest Less Money:

We do not offer financial advice – As a journalistic site, it’s important to know that we do not provide financial advice. You should always do your own research before choosing any financial product so that you can be certain it is right for you and your specific circumstances. If you are in any doubt, please seek professional financial advice from a regulated financial advisor.

No Liability – please note that you use the information on Rest Less Money at your own risk and we can’t accept liability for how you choose to use the information given on our site. We will often provide links to content or products and services available on other third-party websites. These are provided purely for your convenience and we cannot be held responsible for any content, or any of the products and services offered on any website that we link to.

 

Accuracy of Information – We try to make sure that all the information provided on Rest Less Money is correct at the time of publishing as we want it to be the most helpful resource possible. Sadly, we are not perfect however, and so we can make no guarantees as to the completeness, accuracy, adequacy or suitability of the information available on the site.
Whilst we work hard to try and provide accurate information, deals and prices can change, so whilst they may be correct at the time of writing, providers may subsequently decide to alter them later – so always double check first.

A final note on the Rest Less Community Forums – always remember that anyone can post their opinion on the Rest Less Community Forums, so it can be very different from our own opinion and may not be factual or well researched. Always be wary of any content posted on the forums and be sure to do your own research and due diligence on anything suggested. 

We hope you find Rest Less Money a useful resource and we would welcome your feedback at [email protected] on how to make it even better. For more information on any of the above you can read our full terms and conditions.

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