Direct payments – arranging and paying for care

Yes – the total care package that your local authority funds is means tested. This applies to services provided by the local authority as well as services paid for by direct payments.

So, how much you get in direct payments depends on your financial circumstances, and you might need to top them up with your own money.

To receive direct payments, you first need to ask your local authority (or Health and Social Care Trust in Northern Ireland) to assess your care needs.

After the assessment, you’ll get a care plan. This is a written agreement setting out what needs you have, which your local authority will meet.

Direct payments go straight into your bank, Post Office, building society or National Savings & Investments (NS&I) account. But be aware that you can’t spend the money on anything you want.

The local authority has to be satisfied that the payments are going towards the care services agreed in your care plan. You can't use direct payments to buy services that are already provided by your local authority. They might offer a list of suggested approved providers, but you’re free to use other providers and other types of service if they better meet your care needs.

The local authority will monitor the way you use the payments, for example through an annual review. Remember to keep receipts to show how you’ve spent the payments.

Your local authority will tell you what information you’ll need to provide. This will include, for example, timesheets signed by carers, receipts for equipment or invoices from home care agencies. They’ll also tell you how and when to provide this information.

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 authority. Find out more about how to choose a bank account.

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 pay the money back.

You can’t normally 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. However they might agree it where the local authority is satisfied that it is necessary to meet needs. In England you might be able to pay them to manage your direct payments.

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 local authority agrees that’s what you need.

The precise rules for direct payments vary around the country. Speak to your social worker or contact your local authority to find out which rules apply to you.

• You want to keep 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 you have people to support you with this - you’re allowed to nominate someone else to manage your payments for you if you need it.
• You’re happy to keep receipts and invoices and submit these to social services on time.

If you can’t manage your own direct payments or nominate someone else, another person can ask to become an authorised person. This can be a friend or family member. They will then manage your direct payments on your behalf.

• You’re uncomfortable about being an employer. This might apply if you pay someone to care for you (although help with the duties of being an employer is available).
• You’re not confident about keeping careful records and safely filing. important documents such as receipts (although help with this is available)
• You spend frequent or long periods of time in hospital.
• You’re happy to let your local authority provide you with care services.
  

The direct payments must be enough to meet the care needs that your local authority has assessed you as having.

If you use the money to pay for a care worker, there might be extra costs involved with being their employer. For example, recruitment costs, employer pension and National Insurance contributions and their Income Tax. The direct payments must be enough to meet these costs as well.

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

If you already receive care services, ask your local authority 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 at GOV.UKOpens in a new window

If you live in Northern Ireland, find out more about direct payments at nidirectOpens in a new windowOpens in a new window

Your local authority (or your Health and Social Care Trust if you live in Northern Ireland) can help you manage 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 your local authority.

If you’re in Northern Ireland, you can download the Department of Health, Social Services and Public Safety information booklet on direct paymentsOpens in a new window

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 National Insurance, Income 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.

• Think about using a home care agency. Some agencies will handle all the employer obligations for you; others will be the employer rather than you. You pay fees to the agency. Home care agencies will also deal with the paperwork involved in recruiting a carer, including references and criminal checks.
• Look for local firms who offer payroll services. They’ll handle tax and National Insurance contributions for a fee.

For more information:

• for UK-wide advice, see the Acas website
• in Scotland, go to the Care Information Scotland websiteOpens in a new window
• in Northern Ireland, see the nidirect websiteOpens in a new window
• in Wales, go to Dewis Cymru – just type in ‘direct payments’ and your postcode.

The organisations that monitor the quality of care services also have online directories you can use to search for carers and home care agencies:

• in England, contact the Care Quality CommissionOpens in a new window
• in Scotland, contact the Care Inspectorate
• in Wales, contact the Care InspectorateOpens in a new window
• in Northern Ireland, contact the Regulation and Quality Improvement AuthorityOpens in a new window.

There are various ways to find carers in your area, for example:

• ask your social services department about local carers and home care agencies
• if you live in England, Scotland or Wales, the Elderly Accommodation Counsel (EAC) has an online directory (Opens in a new window) to help you search for services including care and dementia care, home help and much more
• use the Carers Direct (Opens in a new window) online search tool or speak to a helpline adviser on 020 3904 4520 to find local carers in England and Wales.
• if you live in Northern Ireland, visit homecare.co.ukOpens in a new window

Direct payments aren’t just for paying for carers. You can also use them to buy equipment that helps you live more independently. Ask social services about local providers and preferred suppliers, so you can shop around for the best deal.

If you no longer want to manage direct payments yourself, your local authority has a legal duty to arrange services instead.

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