Direct payments: taking the council money and choosing your own care

After a needs assessment the council sets a personal budget: the amount it will spend meeting your eligible needs. A direct payment is that budget, less your assessed contribution, paid to you or to someone managing it for you. Councils have had to offer one to anyone who asks and can manage it (with help if needed) since the Care Act came in.

You can also mix: take part of the budget as a direct payment for the bits you want to arrange yourself and let the council arrange the rest.

The budget is worked out from the hours in your care plan at the rate the council pays for home care, which is normally below the private rate: often £22 to £28 an hour against a typical private agency rate of £32. So a plan for fourteen hours a week might come with a direct payment of about £350 a week.

If the agency you choose charges more than the council rate you pay the difference yourself. If you choose a self-employed carer at £18 to £25 an hour, the same budget often buys more hours than the council’s own arrangement would.

Anything that meets the needs in your care plan. In practice that means:

• A home care agency of your choosing, at whatever rate you agree with them.
• A self-employed carer, found through an introductory platform or by word of mouth, who invoices you.
• A personal assistant you employ directly (see below).
• Respite, day services, equipment or transport, if the plan says so.

You cannot normally pay a spouse, partner or close relative who lives with you, unless the council agrees it is the only way to meet the need. You can pay a relative who does not live with you, and a relative can manage the money for you as your nominated person.

A personal assistant is a carer you employ. You become an employer: a contract, payroll, National Insurance, pension auto-enrolment, holiday pay, sick pay and employer’s liability insurance. The council will usually fund a payroll service and the insurance on top of the budget, and most areas have a user-led organisation that helps with recruitment and the paperwork.

A self-employed carer is different: they run their own business, set their own rate, invoice you and sort their own tax. You are a client, not an employer. HMRC decides which one a working arrangement really is, so if the carer works only for you, to hours you set, they are probably an employee whatever the paperwork says. Platforms such as PrimeCarers are built around genuinely self-employed carers who work for several clients.

1. 01
   Ask for it

   At or after the care and support planning meeting, say you want a direct payment and what you intend to spend it on.
2. 02
   Open the account

   A separate bank account, or the council's prepaid card; most councils now use cards and can see the spending directly.
3. 03
   Agree the terms in writing

   The rate and hours with your agency or carer, and keep every invoice.
4. 04
   Send the monitoring

   Usually quarterly. Unspent money above a small float is clawed back at review.
5. 05
   Say when needs change

   The plan and the budget can be revised; do not wait for the annual review.

If managing money is hard, a family member, a friend or a local direct payment support service can hold the account as your nominated or authorised person. You keep the choice; they do the paperwork. See also who pays for home care for how the contribution is worked out.