Direct Payments

1. When the Local Authority must provide a Direct Payment

A Direct Payment is a method of managing some or all of a personal budget. It involves the Local Authority making regular financial payments of the personal budget to the person (or their representative) so that they can choose how to use the money to meet the needs that the Local Authority has agreed to meet (either under its duty or powers).

Anyone who requests a Direct Payment (either paid directly or to another person they nominate) must be provided with a Direct Payment so long as:

  1. They have the capacity to request a direct payment; and
  2. Where there is a nominated person the nominated person agrees to receive the payment; and
  3. The person who will be receiving the payment is capable of managing it (either on their own or with available help); and
  4. The Local Authority is satisfied that a Direct Payment is an appropriate way to meet the needs in question (see below); and
  5. The Local Authority is not prohibited from making a Direct Payment (see below).

Direct Payments for People under section 117 of the Mental Health Act 1983

So long as the above circumstances apply, a Direct Payment can be used to provide after-care services under Section 117 of the Mental Health Act 1983.

Direct Payments for People who already have a Health Direct Payment

Where a Direct Payment is made for a person already in receipt of a Health Direct Payment (under the National Health Service Act 2006) the Care Act is clear that the Local Authority must take reasonable steps to co-ordinate the systems, processes and requirements which it applies or imposes with a view to minimising the administrative or other burdens which they place on the person.

2. When the Local Authority must not provide a Direct Payment

The Local Authority must not under any circumstances provide a Direct Payment to meet the needs of anyone who is known to be subject to a requirement, license or order under criminal legislation that requires them to undertake drug or alcohol rehabilitation, behaviour therapy or testing.

3. Putting Conditions on a Direct Payment

The Local Authority is able to put conditions on a Direct Payment if it feels it necessary and appropriate to do so. These include:

  1. Prohibiting a named individual from providing care;
  2. That certain information must be provided to the Local Authority to enable effective monitoring of the use of the Direct Payment.
Although the Local Authority can prohibit a named individual from providing care using the Direct Payment it cannot tell the person who they should be using to provide care.

4. Needs that may not be met by a Direct Payment

When a Direct Payment cannot be used

Ordinarily a Direct Payment must not be used to pay for Care and Support being provided to the person by a relative living in the same household, including:

  1. A spouse, civil partner or partner co-habiting;
  2. A parent, step-parent or parent-in-law;
  3. A son/daughter, son/daughter-in-law or stepson/stepdaughter;
  4. A brother/sister or brother/sister-in-law;
  5. An Aunt or Uncle; or
  6. A Grandparent; or
  7. Anyone living with a listed relative as spouse, civil partner or partner co-habiting.

Only when the Local Authority deems it necessary can it authorise the use of a Direct Payment to any of the above people in relation to:

  1. Meeting the care needs of the person;
  2. Administrative and management support or services to enable the person receiving the Direct Payment to comply with legal obligations in respect of it; or
  3. Administrative and management support or services to enable the person receiving the Direct Payment to monitor the receipt and use of the Direct Payment.
Example:
Shobna has a learning disability and needs varying amounts of Care and Support throughout the day. Much is provided informally by her mother but she requires regular breaks. Shobna receives a Direct Payment but has not been able to recruit a Personal Assistant who understands her cultural needs. This means that her mother has not been getting a break and is very tired. Shobna's Aunt lives in the same household and is willing to provide some Care and Support to her so that her mother can have the break she needs. The Local Authority authorises her to become a Personal Assistant for Shobna.

Meeting needs in a care home

Under the Care Act a Direct Payment cannot be used to pay for a long term care home placement.

For the purposes of the Act long term means either:

  1. A permanent placement; or
  2. A short term placement (including respite) that does not exceed a period of 4 consecutive weeks in any 12 month period.

Circumstances when 4 consecutive weeks is exceeded

The Regulations specify that 4 consecutive weeks are exceeded in the following circumstances:

  1. When a single stay exceeds 4 weeks; or
  2. When the person has stayed for 2 or more periods separated by less than 2 weeks that when accumulated add up to 4 weeks.

In this situation the person cannot use a Direct Payment to purchase a short stay in a care home until 12 months have passed since the start of the 4 week period.

However, they can still access a short placement if they pay through another means.

Circumstances when 4 consecutive weeks is not exceeded

The Regulations specify that 4 consecutive weeks are not exceeded when a stay is:

  1. Less than or up to 4 weeks; and
  2. There is at least 4 weeks between the end of the first stay and the beginning of the next one.

Authorities where the 4 week rule does not apply

If the person is ordinarily resident in one of the following local authorities the 4 consecutive weeks rule does not apply:

  1. Bristol City Council;
  2. Cornwall Council;
  3. Dorset County Council;
  4. Gateshead Council;
  5. Hertfordshire County Council;
  6. Hull City Council;
  7. Lincolnshire County Council;
  8. London Borough of Enfield;
  9. London Borough of Havering;
  10. London Borough of Redbridge;
  11. Manchester City Council;
  12. Milton Keynes Council;
  13. Norfolk County Council;
  14. North Lincolnshire Council;
  15. Nottinghamshire County Council;
  16. Staffordshire County Council;
  17. Stockport Council;
  18. Surrey County Council.

Case examples from statutory guidance

Mrs. H has one week in a care home every 6 weeks. Because each week in a care home is more than 4 weeks a part, they are not added together. The cumulative total is only one week and the 4-week limit is never reached.

Peter has 3 weeks in a care home, 2 weeks at home and then another week in a care home. The 2 episodes of time in a care home are less than 4 weeks apart and so they are added together making 4 weeks in total. Peter cannot use his direct payments to purchase any more care home services within a 12-month period.

5. Direct Payments for People who Lack Capacity

A person who lacks capacity to request or manage a Direct Payment can still receive one under the Care Act so long as the person making the request for the Direct Payment is either:

  1. A person authorised under the Mental Capacity Act to make decisions relating to the person's Care and Support (e.g. a Deputy or a Lasting Power of Attorney); or
  2. A person approved by someone authorised under the Mental Capacity Act to make decisions relating to Care and Support; or
  3. Where there is no authorised person under the Mental Capacity Act, the Local Authority deems the person making the request to be suitable.

For the Local Authority to deem a person suitable to receive and manage a Direct Payment they must be satisfied that the person will act in the best interests of the person receiving Care and Support when arranging support and services. 

Before arranging a Direct Payment for a person who lacks capacity the Local Authority must make a Best Interests decision (or be satisfied that a person authorised by the Mental Capacity Act has made a Best Interests Decision) that the Direct Payment is the most appropriate way in which the person's needs can be met.

Changes in mental capacity

The person becomes incapacitated

If a person was receiving a Direct Payment but their capacity changes the Local Authority may decide to terminate the agreement but should only do so if:

  1. The change in capacity is permanent; and
  2. There is no other person willing and able to receive the Direct Payment and manage it that the Local Authority deems suitable.

The person has fluctuating capacity

For the purposes of the Care Act a person whose capacity fluctuates is treated the same as a person who lacks capacity. This is because it is important that during times they lack capacity there is a suitable or authorised person to receive and manage the Direct Payments.

However, during periods where the person has capacity the authorised or suitable person must demonstrate to the Local Authority that they have allowed the person to manage the Direct Payments themselves.

6. Reviewing a Direct Payment

Under the Care Act a Direct Payment must be reviewed no later than 6 months after the date that it began. Following this it must be reviewed not less than once every 12 months.

The Direct Payment review must include:

  1. The person receiving Care and Support;
  2. Any carer the person has;
  3. The person to whom the payments are being made (if this is not the person receiving Care and Support or the carer);
  4. Any person who is providing administrative or management support;
  5. Anybody the person asks the Local Authority to involve; or
  6. In the case of a person who lacks capacity, anybody authorised by the Mental Capacity Act to make decisions about Care and Support provided to the person (a Deputy of Power of Attorney); or
  7. Where no authorised person exists, anybody the Local Authority deems to be interested in their welfare.
The Local Authority must take all reasonable steps to reach agreement with all of the above people involved as to the outcome of a Direct Payment review.

7. Ending a Direct Payment

If a review of a Direct Payment indicates that a breach of a condition has occurred the Local Authority can use its discretion to terminate the Direct Payment.

A person in receipt of Direct Payment (whether this is the person with Care and Support needs or their representative) can request to terminate the agreement at any time, and the Local Authority must make alternative arrangements to manage the Direct Payment or their personal budget.