Direct Payments for Social Care in England

Direct payments put the council's care budget directly into your parent's hands — or yours, as their representative — so you can arrange and pay for care services yourself instead of accepting whatever the council commissions. For families frustrated by inflexible care packages, limited carer hours, or agency staff who change every visit, direct payments offer genuine control.

Under the Care Act 2014, every local authority in England must offer direct payments to anyone eligible for council-funded care. Yet uptake remains low because the process is poorly explained and the administrative requirements put people off. Here is how it actually works.

What Direct Payments Cover

The council calculates your parent's personal budget — the total amount they would spend on commissioned care services. Instead of using that budget to pay a home care agency or contribute to a care home, they pay it directly to your parent (or into a managed account) to spend on:

• Hiring personal assistants (PAs) or carers directly
• Paying a home care agency of your parent's choice (not limited to the council's approved list)
• Purchasing equipment, respite care, or day centre sessions
• Transport to activities that meet assessed care needs

Direct payments cannot be used for permanent residential care (the council arranges this directly), but they can cover temporary stays, respite breaks, and certain short-term placements.

How the Money Works

The council pays the direct payment into a dedicated bank account — either one your parent controls, a nominee account managed by a family member, or a managed account run by a third-party organisation. The payment is made in advance, typically every four weeks.

Your parent's assessed contribution toward care (calculated through the financial assessment) is deducted before the payment is made. If the council calculates a personal budget of £400 per week and your parent's assessed contribution is £80, the direct payment is £320 per week.

Every penny must be accounted for. The council requires receipts, timesheets, and bank statements showing that the money was spent on care that meets the assessed needs. Unspent funds may be reclaimed.

Hiring a Personal Assistant

The main reason families choose direct payments is to hire a personal assistant rather than use agency carers. A PA is employed directly by your parent (or by you as their representative), which means:

• Consistency — the same person arrives each day, building a relationship with your parent
• Flexibility — you set the hours, tasks, and schedule rather than accepting an agency's availability
• Cost control — PA hourly rates are typically £12 to £16 per hour, compared to £20 to £30 from agencies

The trade-off is employer responsibility. As an employer, your parent (or you) must handle payroll, tax, National Insurance contributions, workplace pensions, holiday pay, sick pay, and employer's liability insurance. Most families use a payroll service — many councils offer free payroll support or can recommend local organisations.

You cannot use direct payments to hire a close family member who lives in the same household, unless the council agrees there are exceptional circumstances.

Requesting Direct Payments

The council must offer direct payments during the care planning process. If they do not mention them, ask explicitly. The council cannot refuse direct payments simply because they find it administratively inconvenient — they must provide a clear reason based on the Care Act criteria.

Your parent (or their representative) must consent to receiving direct payments and must be able to manage them — either independently, with help from a family member, or through a managed account. If your parent lacks mental capacity and has no suitable representative, the council may not offer direct payments.

Combining Direct Payments With Other Funding

Direct payments can be combined with other elements of the care funding system. Your parent might use direct payments for domiciliary care at home while also claiming Attendance Allowance (which goes toward the assessed contribution or is kept as additional income, depending on their funding status).

If your parent later moves into a care home, direct payments stop and the council takes over commissioning. But for families committed to keeping a parent at home for as long as possible, direct payments are the most powerful tool for shaping care around the parent's actual preferences.

The England Care Funding Guide includes a chapter on direct payments with practical guidance on setting up payroll, interview questions for PAs, and a template employment contract.

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