Direct Payments for Social Care: Taking Control of Your Parent's Care Budget

Topic cluster: Benefits & Financial Support | Reading time: 5 min

If your parent has been assessed as eligible for social care support by the local authority, they may have the option to receive funding as a direct payment — a sum of money paid directly to them (or a nominated person) to arrange their own care, rather than receiving services arranged by the council. This guide explains how direct payments work, who they're for, and how to manage them.

What Are Direct Payments?

Direct payments are cash amounts given by local authorities to people who have been assessed as needing social care support. Instead of the council commissioning a care agency on your parent's behalf, the money is paid to your parent (or you as their representative) so you can arrange and purchase care independently.

They were introduced under the Community Care (Direct Payments) Act 1996 and significantly expanded by the Care Act 2014. The Care Act gave eligible adults the right to request a direct payment as an alternative to council-arranged services.

Who Is Eligible?

Your parent may be eligible for direct payments if:

They have been assessed as having eligible care and support needs under the Care Act 2014
The local authority has a duty to meet those needs
They pass the means test (or are in a transitional period — such as the 12-week property disregard)
They are willing to manage a direct payment (or have a suitable representative)

Direct payments cannot be used to purchase permanent residential care (i.e., to pay for a care home placement directly), though they can fund short-term or respite residential care.

What Can Direct Payments Be Used For?

Permitted Use	Examples
Personal care	Hiring a care worker for morning and evening personal care
Domestic support	Cleaning, laundry, meal preparation
Day activities	A gym membership, swimming sessions, cultural activities
Transport	Getting to appointments or social activities
Overnight care	Night-time supervision at home
Respite	Short breaks in a care home or with alternative carer
Equipment	Specialist aids not funded via NHS

Funds must be used for agreed support needs. The local authority will conduct periodic reviews and may request evidence of spend.

What Cannot Be Used?

Permanent residential or nursing home fees
Paying a close family member who lives in the same house (unless the authority specifically agrees)
Anything not related to the assessed care needs
Alcohol or gambling

How the Personal Budget Works

Following a Care Needs Assessment, the local authority calculates an indicative personal budget — the estimated cost of meeting your parent's eligible needs. After a financial assessment, they determine how much of this the council will fund and how much your parent contributes (if they have sufficient capital or income).

The funding allocation can be taken as:

Council-managed services — council arranges care on your parent's behalf
Direct payment — money paid to your parent to arrange care themselves
Third-party managed budget — an organisation manages the budget on your parent's behalf
A mix of the above

Managing a Direct Payment

Direct payments are usually paid into a separate dedicated bank account and must be used only for agreed care purposes.

As the person managing the payments, you will need to:

Keep records of how the money is spent
Arrange DBS checks for any care workers employed directly
Handle employment law obligations if employing a personal assistant (contracts, payroll, holiday pay)
Attend reviews and report spend to the local authority

This level of administration is manageable for many families but can be challenging. Support organisations exist to help with payroll and HR if you employ a personal assistant directly.

Employing a Personal Assistant

Many families use direct payments to employ a personal assistant (PA) — a care worker chosen by the family rather than supplied by an agency.

Advantages:

Greater consistency (same person every time)
More flexible scheduling
Relationship-based care, especially important for dementia

Important considerations:

You become the employer — responsible for contract, payroll, NI contributions, holiday pay, sick pay
The PA must have an enhanced DBS check
Public liability insurance and employer's liability insurance may be needed
HMRC must be notified of employment

Several organisations, including Skills for Care and SCIE, offer free guidance on employing a PA.

Getting Support

If direct payments feel daunting, a local user-led organisation or disability charity can provide support. Many councils have commissioned local organisations to provide direct payment support services at no additional cost.

Exploring care options for your parent? homeformum.com helps families understand all funding routes and find the right care, whether at home or in a care home.