Direct Payments explained

What a Direct Payment is

A Direct Payment is money paid to you by your local authority so that you can arrange the care and support that has been agreed in your care and support plan, instead of the council arranging it for you.

The sequence matters, because it is where most confusion starts. A Direct Payment is not the beginning of the process. It comes after an assessment, after a decision that you have eligible needs, and after a decision about what will be funded to meet them. Only then does the question of how the support is arranged come up — and a Direct Payment is one of the answers.

Three things follow from that, and they are worth stating plainly:

• It is not extra income. It is public money for agreed support, and it must be used for that.
• It is not a fixed national amount. It reflects what your council has assessed and agreed for your situation.
• It does not change what has been agreed. It changes who does the arranging, and how much say you have.

What you get in exchange for taking on the arranging is control: over who supports you, often when and how, and with far more continuity than a rota usually allows.

Who decides, and how

Your local authority decides. Where NHS funding is involved, the relevant NHS body decides, and the equivalent mechanism is usually a Personal Health Budget.

The usual sequence is:

1. A request for an assessment. You, a relative, a GP, a hospital discharge team or another professional can ask the council to assess your needs.
2. A needs assessment. A social worker or assessor talks to you about what you can manage, what you struggle with, and how it affects your daily life. This is a conversation about difficulty, not about diagnosis.
3. An eligibility decision. The council decides whether your needs meet the national eligibility criteria.
4. A financial assessment. Adult social care is usually means-tested, so the council looks at your income and capital and decides whether you must contribute towards the cost of your support.
5. A care and support plan and a personal budget. What the funded support is intended to achieve, and the amount allocated to meet it.
6. A decision about how it is arranged. Council-arranged services, a Direct Payment, or a mix of the two.

Timescales vary between authorities and depend on how busy the team is and how complex your situation is. Anyone who quotes you a fixed timescale for that process, including us, is guessing.

Oakline has no role in any of those decisions. We are not a local authority, an NHS body or an Integrated Care Board. We cannot decide eligibility, obtain funding for you, influence the amount you are awarded, speed up a decision or appeal on your behalf as an advocate. What we can do is explain the process, help you think through what to describe at an assessment, and take on the practical work once a decision has been made.

If you disagree with a decision, the council has a formal complaints and review process, and independent advocacy services exist for exactly this situation. Ask the council what its process is and whether you are entitled to advocacy support.

What it can be spent on

Only on support that meets the needs set out in your agreed plan, and in line with any conditions attached to your payment. Within that, the range is usually wider than people expect.

Commonly, a Direct Payment is used to:

• Employ one or more Personal Assistants directly — the most common use, and the one that offers the most control.
• Buy support from a care provider or agency of your choosing rather than one the council picked.
• Cover the costs that come with employing someone, such as employer's National Insurance, pension contributions, employer's liability insurance, payroll support and sometimes training.
• Pay for support that achieves the agreed outcome differently — for example support to get to a class or a group rather than support at home — where the council has agreed it meets the need.

It cannot be used for things outside the agreed plan, for anything the conditions of your payment exclude, or for debts, gambling, alcohol, tobacco or household costs that are not part of your support. Councils also normally place conditions on paying close relatives who live in the same household — see our separate guide.

If you are unsure whether something is allowed, ask your council before you commit to it. That question costs nothing in advance and can be expensive afterwards.

What you become responsible for

This is the part that is rarely spelled out clearly at the point the Direct Payment is offered, and it is the reason most people find us.

If you use a Direct Payment to employ a Personal Assistant, you — or the person you are acting for — become an employer. Not a customer of an agency. An employer, with the duties that come with it:

Paying correctly and on time

At least the legal minimum wage for the person's age, with PAYE income tax and National Insurance operated properly and reported to HMRC.

A written statement of employment particulars

Employees are entitled to written terms from day one — hours, pay, duties, notice, holiday.

Paid holiday and statutory sick pay

Accrued, calculated and paid properly. Cover during that leave is a planning problem rather than an optional extra.

Workplace pension duties

Employers have automatic enrolment duties, and they apply to individual employers of Personal Assistants as well as to businesses.

Insurance

Employer's liability insurance is normally required, and specialist policies exist for exactly this situation.

Health, safety and training

A safe working environment, appropriate training for the tasks you are asking someone to do, and safe systems for things like moving and handling or medication.

Records

Timesheets, payslips, contracts, right-to-work checks, DBS records, training records, and spending records for your council's review.

Employment law

Fair process around discipline, grievance, sickness and dismissal. Getting this wrong is where individual employers are most exposed.

None of this is a reason to avoid a Direct Payment. Thousands of people manage these arrangements well, and the control they get in return is worth it. But it is a reason to be honest that a Direct Payment is not only funding — it is a job, and it is reasonable to want help with it.

Managed accounts and third parties

Not everyone wants to hold the money or handle the administration. There are usually several ways a Direct Payment can be arranged, and it is worth asking your council which are available:

• You hold the payment directly, usually in a separate bank account used only for this.
• A nominated or authorised person holds it — often a relative, where the person receiving support wants that or lacks capacity to manage it themselves.
• A managed account service holds the funds, makes payments on your instruction and keeps the financial records, while you keep the decisions about who supports you.
• A mixed arrangement — a Direct Payment for part of your support and council-arranged services for the rest.

Choosing a managed account does not mean giving up control of your care. It means separating the decisions from the bookkeeping, which for a lot of people is exactly the right split.

Reviews and record keeping

Direct Payments are reviewed. Expect your council to look at whether the arrangement is meeting the agreed needs and whether the money has been used for what it was intended for. Some authorities ask for regular statements; others audit periodically.

Keep, from the start:

• Bank statements for the account the payment goes into
• Timesheets and payslips for anyone you employ
• Invoices and receipts for any services or agreed purchases
• Employment paperwork — contracts, right-to-work checks, DBS records, training
• Records of your own contribution, if you have been assessed to pay one

Good records turn a review into a short administrative conversation. Poor records turn it into weeks of reconstructing a year from memory, and in the worst cases into a question about whether money must be repaid. This is the least glamorous part of the whole arrangement and the part most worth getting right on day one.

Common misunderstandings

"A Direct Payment means I get more money."

No. The amount reflects the support the council has agreed to fund. Choosing a Direct Payment changes who arranges it, not how much is available.

"Somebody can get me a Direct Payment."

No. No organisation can obtain one for you or influence the decision. Be cautious of anyone who implies otherwise.

"If I employ a PA, the agency is the employer."

Not in a Direct Payment arrangement. If you employ someone directly, you are the employer — even if another organisation runs your payroll and helps with the paperwork.

"I can pay my daughter to look after me."

Sometimes, but it is not automatic and conditions often apply, particularly where the relative lives with you. Ask before arranging anything.

"It is too late — I have already made a mess of it."

Very rarely true. Late payroll, missing records and unsigned contracts are all fixable. They get harder, not impossible.

Where Oakline fits

We sit on the practical side of the line, after the decisions have been made by other people.

We can explain how the process works and what the terminology means; recruit, advertise for and check Personal Assistants so you can choose from people who have already been verified; prepare employment documentation; run payroll including PAYE, National Insurance, statutory pay and pension duties; coordinate training; and keep the records your council will want to see.

We cannot decide your eligibility, obtain your funding, tell you what you will be awarded, influence or appeal a decision, or provide regulated personal care. Oakline is not registered with the Care Quality Commission and is not a financial, tax or legal adviser.

If that split is what you need, tell us about your situation and we will tell you honestly whether we can help.

General information, not advice.This guide describes how Direct Payments normally work. Rules differ between local authorities and change over time. Check the current position with your council, or take advice from a suitably qualified adviser, before acting on anything here.