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Understanding Direct Payments

If you have been assessed to need care and support services from your local authority, direct payments are on way you can recieve your personal budget. They give you the ability to arrange and pay for your own care directly, rather than recieving services from your local trust.

What are the benefits of direct payments?

Direct payments are a popular option for many people. Some of the main benefits this option offers includes:

  • Greater independence
  • More control over the exact type of care you recieve for your individual needs
  • You have more flexibility than you may recieve from care arranged by your local authority

Who can get direct payments?

If you are already recieving care services from your local authority, you will be entitled to ask them to switch to direct payments instead.

If you do not currently recieve any social services, you will need to request for your care needs to be assessed. Direct payments will typically be available to you if:

  • You have been assessed to need services under Health and Personal Social Services legislation
  • You are aged 16 or over and have a disability
  • You are an older person (care needs will still need to be assessed)
  • You are a carer aged 16 or over

If the person requesting direct payments does not have mental capacity, or does have mental capacity but would not be able to handle recieving direct payments, a third party can be nominated to recieve the direct payments provided the local authority agrees that person will be acting on the person who requires care’s best interests.

What Can I Use Direct Payments for?

You can use your direct payments to:

    – Employ someone to provide additional help with your carer’s role. Many people employ a Personal Assistant (PA) or several care staff with their direct payments.
    – Buy services from a care organisation

In the case of people who require care, this means hiring care and support services to assist you in your day to day needs. This could mean hiring care from an agency, or directly hiring a personal assistant.

If you are a carer, you may have been deemed eligible for direct payments to assist you in your role as a carer. For example, your local authority may agree that you would benefit from driving lessons in order to fulfill your role as a carer, and in this case you could use the direct payments for the lessons.

What Can Direct Payments Not Be Used For?

There are specific things you may not use your direct payments for, and it is important that you follow these regulations to ensure your payments are not jeopardized. You cannot use your direct payments to pay for services from:

    – A spouse
    – Close relatives, including parents, children, siblings, or their in-laws.
    – Anyone living in the household

You are also not allowed to use direct payments to pay for support services provided by your local authority, or to pay for long-term residential care, for example in a care home.

How Much Are Direct Payments For Carers?

The number of direct payments you receive is entirely decided by the Trust’s assessment of your needs and the level of support you require. If you already receive services from your local Trust, make an inquiry about direct payments with them.

Hiring a Personal Assistant With Direct Payments

If you choose to hire a personal assistant to provide your care, there are some things you should know.

Hiring a personal assistant with your direct payments gives you the role of an employer, and with that come some responsibilities you need to be aware of.


First, as an employer, you are legally required to have Employers’ Liability Insurance. This covers you in the case of your employee (i.e. anyone you have hired to provide you with care with your direct payments) being injured or having their property damaged and holding you responsible.

We offer Direct Payments Carer Insurance specifically for these circumstances, with three different levels of cover to suit different needs. Other benefits our cover options include are emergency dental cover, motor theft, employee negligence, redundancy cover, travel, medical expenses & much more.

Visit our quote page to find out more and get a quote for your direct payments carer insurance.

Contract Of Employment

You are also legally required to create a contract of employment when hiring someone to assist you with your care needs with direct payments. The contract must specify:

  • The job role
  • Start date
  • Rate of pay and how they are to be paid
  • Working hours
  • Agreed holiday
  • Sick pay
  • Notice requirements
  • Termination terms and conditions

Paying your employee

As an employer, you are also responsible for paying your employee and organising their:

  • Tax contributions and National Insurance
  • Pension contributions

If these tasks seem to overwhelming, however, you can choose to use a support provider or payroll services to take on these responsibilities. You should note, however, that using an additional service does come with additional charges from your direct payments.

Do direct payments affect any other benefits I may be recieving?

If you recieve direct payments as a carer or as someone who needs to purcahse care services to meet your needs, these payments are not counted as a means of income and therefore do not affect your other benefits.

If the person you care for pays you with their direct payments, however, then this is classed as earnings and could affect other benefits that you recieve.

Useful Links & Organisations

HM Revenue & Customs 

Website: | Telephone 0300 200 3200 

HMRC has a useful helpline providing support for anyone considering becoming an employer (classes as anyone with one or more employees).

Citizens Advice

Website: | Telephone 0344 411 1444 (England)

A network of advice centres available nationwide to provide confidential and independent advice.

Care Quality Commission

Website: | Telephone 03000 616 161 

The CQC is the independent regulator of adult social care and health services in England.