What is a direct payment — and could it give you more choice and control over your care?

What exactly is a direct payment?

When your local council agrees to contribute to the cost of your social care, it has two ways to deliver that support. It can arrange a care agency on your behalf — or it can pay the agreed budget directly to you and let you organise the care yourself. The second option is called a direct payment.

In practice, most councils load the money onto a prepaid card each month. You use that card to pay your chosen care provider or personal assistant. The council may ask to see statements occasionally to confirm the money is being spent on your agreed care plan, but day-to-day you are in charge.

Direct payments have been a legal right in England since 1997 — yet Age UK estimates that many hundreds of thousands of eligible people are not using them, often simply because nobody told them the option was available.

Who is entitled to a direct payment?

Almost anyone who has been assessed as eligible for council-funded care and support can ask for a direct payment. That includes:

• People who need help with washing, dressing, meals, or moving around the home
• People with a long-term illness, disability, or cognitive difficulty such as dementia
• Unpaid carers who have been assessed as needing support in their own right
• People leaving hospital who need a care package to return home safely

The council can only refuse a direct payment in very limited circumstances — for example, if you lack the mental capacity to manage it and there is no suitable person to manage it on your behalf. Simply being older, or not having experience of managing money, is not a valid reason for refusal. If you are turned down, you can challenge the decision.

How much money will you receive — and what are the financial thresholds?

Before setting any direct payment, your council carries out two assessments: a needs assessment (free, and available to anyone who asks) and a financial assessment to work out what you contribute. The amount you pay depends on your savings and income.

• Savings above £23,250: you are generally expected to fund the full cost of your care yourself, at least until your assets fall below this figure
• Savings below £14,250: the council covers the full eligible cost — you pay nothing towards it
• Between £14,250 and £23,250: you contribute a calculated proportion, and the council covers the rest

One important point many people miss: if you are receiving care at home (not moving into a care home), your property is generally not counted in the financial assessment. That means many people who assume they have too many assets are actually entitled to council support — it is always worth asking for the assessment to find out where you stand.

Once the council sets a budget, that budget must be enough to actually purchase the care in your agreed plan. If the rate does not cover what local agencies charge, you have the right to challenge it and ask for a review.

What can you spend your direct payment on?

You can use a direct payment to buy any support that meets the needs set out in your agreed care plan. In practice, the most common uses are:

• Your choice of home care agency — rather than whoever the council has a contract with, you can choose a CQC-registered agency you trust, with carers who visit at times that suit you
• A personal assistant — you can employ someone directly as your carer, which gives you the closest possible continuity and relationship
• Respite care — short-term support so that an unpaid family carer can rest, or so you can try a day centre or a short residential stay

You generally cannot use a direct payment to pay a close family member who lives with you, or for anything unrelated to your agreed care needs. But within those limits, the flexibility is genuine: if your needs change month to month, the budget can flex with your plan too.

How do you apply for a direct payment?

The process starts with a needs assessment — and you are entitled to ask your local council for one at any time, whether or not you have had care help before. Contact your council’s adult social care team directly, or ask your GP or a hospital discharge team to make a referral on your behalf.

Once your needs are assessed and you are found eligible, simply tell the council you want a direct payment rather than a managed care package. They will draw up a support plan and agree a budget with you. Most councils can also help you find a suitable care provider or personal assistant if you want that support.

If you find the paperwork daunting, free help is available. Local organisations such as Age UK, Disability Rights UK, and local carers’ charities regularly help people set up and manage direct payments. Your council is also legally required to offer you an “appropriate person” who can manage the payment on your behalf if you prefer not to deal with it yourself.

Is there much admin involved — and is it worth the effort?

For most people on a direct payment, the ongoing administration is modest. You will typically be asked to:

• Keep receipts and statements for the prepaid card
• Respond to an occasional audit from the council — usually once a year
• Notify the council if your care needs change significantly

If you employ a personal assistant directly, there are more responsibilities — you become their employer, which means handling payroll, holiday pay, and HMRC reporting. Many councils will fund a small additional amount to cover payroll support, and there are organisations that will handle this for you at low or no cost. Ask your council specifically about this when you agree your care plan.

For many people, the benefit — knowing the same person will arrive at the same time, rather than whoever is available that day — far outweighs the modest paperwork involved. Continuity of care matters enormously, and a direct payment is one of the few ways to make it happen.