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Personal Budgets and Direct Payments

Personal Budgets and Direct Payments

In England, most local authorities increasingly manage their care packages through the allocation of a Personal Budget. This system has been in place for the last few years, but with the implementation of the Care Act in April 2015, the Personal Budget became mandatory across England to all people who have been assessed as needing care services and who qualify for council funding.

Here we answer the most frequently asked questions about personal budgets in England.

What is a personal budget?
Personal budgets for social care are part of a government move in England to personalise social care. They allow people, where possible, to make choices about their own care.

If your loved one has been assessed as needing non-urgent help and support, he or she will be allocated a sum of money called a personal budget. Your loved one can then decide how the money is spent, which enables them to have greater choice and control over the services they need to use rather than taking a council’s ‘one size fits all’ prescription.

There are various ways your loved one can choose to take the personal budget:
– As a Direct Payment, paid into their account as a Direct Payment (see below)
– In an account managed by the council, which should be spent as your loved one wishes
– In an account held with a care service provider and managed by your loved one
– In a trust held on your loved one’s behalf by a family carer, friend or family member
– As a mix of the above

How much is a Personal Budget?
There is no fixed sum. The amount your loved one gets in their Personal Budget is calculated following their needs and financial assessments, and using the local council’s Resource Allocation System (RAS). The determined amount will be set out in their care plan.

Your loved one has the right to receive enough money for their needs to be met, but if they feel the amount is incorrect, they can challenge the local authority’s needs or financial assessment (see Challenging local authority and NHS assessments).

What are Direct Payments?
Direct Payment is the way in which your loved one can receive either all or part of their Personal Budget – or they might decide to leave the organisation of their care needs with the social services and not take the Direct Payment at all, as outlined above. The decision is theirs.

Most authorities make the Direct Payment every four weeks and straight into your loved one’s bank account.

Can my loved one opt in or out of Direct Payment?
If your loved one accepts Direct Payments, but then changes their mind, they can stop them at any time. Equally, they can switch to Direct Payments at any time instead of having the local authority arranging their services. If your loved one decides to move from local authority arrangements to organising their own, the local authority has a duty of care to ensure the current services remain in place until your loved one has organised their own.

Direct Payments outside England
In Northern Ireland, Direct Payments are widely available (see below), but personal budgets managed by the local authority are at an early stage of roll out and aren’t yet available in all areas.

In Scotland, the Social Care (Self-Directed Support) (Scotland) Act 2013 provides a range of new options about how individuals can choose to receive social care services in Scotland, for more information go to Self Directed Support Scotland.

In Wales, only Direct Payments (sometimes also known as self-directed support), described below, are available.

How can my loved one spend Direct Payments?
Direct Payments give individuals money so that they can arrange and buy their own care services. Your loved one can only spend the money on care that has been agreed in their needs assessment. They must also keep records to show exactly how the money has been spent. The local authority remains responsible for monitoring your loved one’s needs and checking that they are still being met.

Direct Payments can be used to:
– purchase most community services, such as personal care, provision of meals or attendance at a day centre
– paying for home help services eg if your loved one’s care plan said that they needed a home help or a gardener, they could use Direct Payments to employ a neighbour to help

Hiring your own helpers or carers
Be warned that if your loved one uses Direct Payments to pay someone like a carer, gardener or cleaner they legally become an employer. This could make them liable for PAYE tax and National Insurance. They might also have to think about things like wages and contracts. For more advice on hiring individuals, see Employing private individuals.

Direct Payments can’t be used to:
– pay anyone else living in the same household, unless that person is specifically employed as a live-in carer
– pay for permanent residential care

What are the benefits of Direct Payments?
Receiving Direct Payments gives your loved one more flexibility. They are able to choose who delivers the care services that they need, and when. This might be useful if they have a particular provider in mind – maybe one recommended by a friend – or if they are not happy with the choice of provider offered by the local authority.