Direct Payments

A Direct Payment is when an individual or their main carer is given a cash payment instead of receiving the services identified as necessary and accounted for by the relevant authority.  This payment will be used by the individual to organise and pay for their own care.

Direct Payments are cash payments given to service users in place of receiving community care services they have been assessed as needing. They are intended to give users greater choice in their care. The payment must be sufficient to enable the person to purchase services to meet their assessed needs, and must be spent on services that meet the person’s needs. 

The person receiving the payment needs to either employ people to provide support or ask a service to organise this for them. Many councils have commissioned support organisations to help service users handle the responsibilities to do with employing people.

Personal Budgets are an allocation of funding given to or identified for people after an assessment which should be sufficient to meet their assessed needs.

Users can either take their Personal Budget as a Direct Payment, or – while still choosing how their support needs are met and by whom – leave councils with the responsibility to commission the services. Or they can take have some combination of the two.
As a result, Personal Budgets can provide a potentially good option for people.

To meet an individual’s healthcare needs, the NHS may provide them with a Personal Health Budget, which is the total of their various healthcare costs. This may also be taken as a Direct Payment (this is still being rolled out and should be available nationwide by autumn 2014).

A Direct Payment is not counted as income, meaning that it does not affect a person’s welfare payments, and is not liable for tax. 

Why have they been introduced?

The initiative was created to give people more information on and control over how their needs were being met, as part of a process called Self-Directed Support, which was itself part of the wider approach of Personalisation.

What options are there?

The individual is encouraged to take as much or as little control over their various budgets as they wish to.
Some people prefer to receive a combination of services and cash, allowing their council/the NHS to organise and provide certain forms of care, whilst they themselves identify and pay for the rest via a Direct Payment.

Some people prefer to receive their entire budget via a Direct Payment, and assume full responsibility for organising all of their own care. Support would be provided to do so, and the individual would take control over the purchasing of any required services.

Some people prefer to appoint a third-party to take control of their budget. In this case, a Direct Payment may be made to a main carer or to a ‘user-controlled trust’, and they would take over the process from the authorities.

Of course, Direct Payments are an option, not a requirement.  Should the individual be happy with the services offered by the relevant authority, they may choose to not go down the Direct Payment route.

How can support be provided through a Direct Payment?

There are three choices:

  • Employ a Personal Assistant directly
  • Use a Personal Assistant who is self employed
  • Use an agency or organisation to supply a Personal Assistant


What can the money in a Direct Payment be used for?

  • Budgets are based on preliminary analyses of the cost of the various needs of the individual, and are built from a preliminary ‘care’ or ‘support’ plan. The money in a Direct Payment may only be used for services outlined as necessary within these plans.
  • The Direct Payment of a Personal Budget may only be used to fulfil social care needs, whereas the Direct Payment of a Personal Health budget may only be used to fulfil healthcare needs.
  • It may not be used for things which would be considered wrong for the government to fund. These generally include alcohol, tobacco, gambling, debt repayment, and anything which is illegal.
  • It is not usually permitted to employ a close family member, defined as a spouse/partner or someone with whom the individual lives.