Direct payments - arranging and paying for care

Paying for care services (for yourself or someone else) with direct payments from your local authority gives you independence, choice and control. But it’s also a responsibility..

What are direct payments?

Top tip

It’s your choice to receive direct payments or not. Around one in six people over 65 receiving care opt for direct payments.

If your local authority (or your Health and Social Care Trust if you live in Northern Ireland) agrees to fund some or all your care services, they’ll offer you the choice of:

  • your local authority providing services directly to you
  • receiving direct payments from your local authority, which you use to arrange and pay for care services yourself; or
  • a ‘mixed package’, with some services provided directly and others that you buy out of your direct payments.

Even if you accept direct payments from your local authority, you can change your mind later on, and ask them to provide services to you instead. You might do this if you’re finding it difficult to manage the payments, for example.

Are direct payments means tested?

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.

Find out more in our Local authority funding for care costs – do you qualify? guide.

Getting a social care assessment

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.

See our How a local authority care needs assessment works guide to find our more.

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 be aware that you can’t spend the money on just anything.

The local authority has to be satisfied that the payments are going towards the care services agreed in your care plan. They may offer a list of suggested approved providers, but you’re free to use other providers and other types of service if they 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.

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 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, in England you may 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 is 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.

Direct payments could be for you if:

  • 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 too.
  • 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.

Direct payments are probably not for you if:

  • You’re uncomfortable about being an employer. This may 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.

How much will I get as a direct payment?

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

If you use the money to pay for a care worker, there may 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.

How to apply for direct payments

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 via the GOV.UK website.

If you live in Northern Ireland, find out more about direct payments on the nidirect website.

Get support to manage direct payments

Your local authority 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.

For example, Disability Rights UK offer advice about direct payments and employing a carer. Visit the Disability Rights UK website or call their helpline on 0330 995 0404.

If you’re in Northern Ireland, you can download the Department of Health, Social Services and Public Safety information booklet on direct payments.

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 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:

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

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

  • Ask your social services department about local carers and home care agencies.
  • Which? Care Services Directory is an online search tool that can help you find home care agencies.
  • Use the Carers Direct online search tool or speak to a helpline adviser on 0203 904 4520 to find local carers in England and Wales.

Find out more in our Employing someone to help with your careopens in new window guide.

Comparing products and services

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.

Our guide on shopping around for disability aids and equipment {:target=”_blank”}is useful too.

What to do if your circumstances change

Top tip

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

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

Or, 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 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.

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