Personal budgets and direct payments

This article explains what personal budgets and direct payments are. The information is written for adults over the age of 18 with care and support needs.

For information on personal budgets for children with special educational needs and disabilities refer to this article. For information on direct payments and support for carers read these articles.

For guidance on Direct Payments and living with Covid-19 see the documents section on the right of this page.

Page contents:

About personal budgets

A personal budget is an agreed amount of money that is given to somebody by the council, following an assessment of their care and support needs. It gives people greater choice and control over how their care and support needs are met. If you have been assessed as being eligible for care and support, you will be offered a personal budget.

A personal budget will set out the total amount of the budget including what the council will pay and what amount (if any) you will pay.

A personal budget gives you the freedom to plan how you receive your support to meet your agreed outcomes and assessed eligible unmet needs in your care and support plan. You get to choose how you spend your money, which allows you to personalise your service.

How to receive and spend your personal budget

There are a number of ways you can choose to receive your personal budget.

A managed budget – if you prefer not to receive your personal budget as money, the council can make your arrangements for you instead. Your support will be limited to the organisations that the council contracts with and the services they provide.

Direct payments – these allow you to receive your personal budget as a cash payment, which you can use to buy services. Direct payments provide greater choice and flexibility in the way you arrange the support you want, and you can include things the council do not contract and directly pay for. There is more information on direct payments below.

A combination budget – a mixture of the above. You may decide that you want a direct payment for some of your support, but you want your social worker to arrange some things for you.

Individual Service Fund (ISF) this allows you to have the freedom of choice of provider, without the trouble of managing the money.  An ISF is not a direct payment as the council still manage your budget and contract the service to a provider, but you do get increased flexibility and control.  ISFs are ideal for people whose situation changes regularly, and where a flexible package of support may be required.  South Gloucestershire Council will be working with a small number of providers to offer ISFs – speak to your social worker if you think you may be interested.

About direct payments

Direct payments are cash payments from your personal budget made directly to you.

You can have the money paid onto a direct payment card, which the council supplies for people receiving regular payments, and use it to arrange and pay for your support.

You may also nominate someone who agrees to act on your behalf, who spends the money on the support you need as set out in your care and support plan.  If you have a nominated person, the money will be paid to a direct payment card account, and both you and your nominated person will be able to use this account.

Our article Direct payment card account has further information on direct payment cards and accounts. There is also a video 'How getting a personal budget and a direct payment card could work for you' available to watch online.

Some of the typical things people use direct payments for are:

Personal assistants – people you employ to give you the help you need. This could be a friend, neighbour or family member as long as they don’t live with you. For more information see Employing a personal assistant.

Activities away from home – support for things like accessing college courses, going to a leisure centre or finding work. You can ask for support from an agency or a personal assistant

Short breaks – support to pay for a short break somewhere that you choose

Equipment – to pay towards a piece of equipment of your choice, which meets your needs as assessed by your occupational therapist.

There are some things that direct payments cannot be used for, such as:

  • housing services
  • health services, although you may be able to have a personal health budget -  South Gloucestershire ICB’s website has further information
  • permanent residential or nursing home support
  • services from your council
  • gambling or alcohol
  • for short breaks in a residential home when the stay exceeds a period of four consecutive weeks in any 12 month period - it may be possible to have a short break for longer than four weeks, but this would need to be arranged through the council and not through direct payments
  • support for people living in Extra Care housing, as this is provided by the organisation working within the Extra Care development
  • for periods of reablement, which is short term support after you leave hospital or when you first start to receive support
  • to pay a family member who lives with you to provide care and support.

In exceptional circumstances, family members living with you or outside your home may be paid by you to help with the administration and management of your direct payment, where these arrangements are particularly complex. Payments would generally be for one or two hours a month.

If you are using a provider or agency instead of a personal assistant, the direct payment will include an hourly rate that is based on the average rate for providers, or the cost of day services.

You should have a clear understanding of what funding is included in your direct payment and what this can be spent on.  If you are not sure speak to your social worker. If you have a direct payment support provider, they can also help you to be clear on how the funding and finances work.  If you spend your direct payment on things that cannot be linked to your care and support plan, you will be asked to repay what you have spent.

Direct payments are reviewed after 6-8 weeks followed by an annual review. This gives you time to start using the direct payments and is an opportunity to discuss how it is working and to agree any actions. The council will also discuss with you if your needs or outcomes have changed.

Direct payments for carers caring for adults

For many carers, their needs can be met by talking through their situation in a carers’ assessment, through information and advice and using the services  available to all carers to support them in their caring role.  Carers’ needs can also be met by providing services and support to the people they care for.  Some carers however will need targeted personalised support, and this is often provided through a direct payment.

As a carer, a carer’s direct payment is a sum of money provided from the council directly to you to have a life outside caring and to enable you to continue caring. This can be provided as a one off or ongoing payments.

The amount will depend on your assessed needs, and how the caring role affects the outcomes you wish to achieve. It must support you in your caring role and help to keep you well and healthy. For example:

  • to buy goods and services such as household items that can make caring easier
  • to pursue hobbies and leisure activities
  • training to help you manage your caring role

There are a few things you cannot use direct payments for including:

  • to pay yourself as a carer for the care you provide
  • anything that is deemed to be illegal or if it does not keep you safe and well
  • services of a personal care nature (e.g. bathing), respite care or replacement care (e.g. sitting service) for the person you care for. However it may be possible for a direct payment to be given to the service user to meet these needs.

Find more information on carers here.

Find out if you are eligible for direct payments

In most cases the council will offer you a direct payment if:

  • you have eligible, unmet care and support needs. You can read more about eligible needs here.
  • you are able to agree to a direct payment, and manage one on your own (or with support)

Many different types of people have direct payments, including:

The council can also offer direct payments for people lacking the mental capacity to consent as long as there is an authorised person that the council has agreed can manage the direct payment on their behalf.

Some people cannot have a direct payment including:

  • offenders on a community order, or serving a suspended prison sentence, under the Criminal Justice Act 2003, which includes a requirement to accept treatment for drug or alcohol dependency
  • an offender on a community rehabilitation order or a community punishment and rehabilitation order under the Powers of Criminal Courts (Sentencing) Act 2000, which includes a requirement to accept treatment for drug or alcohol dependency
  • offenders released from prison on licence under the Criminal Justice Act 1991, the Criminal Justice Act 2003 or the Crime (Sentences) Act 1997 subject to an additional requirement to undergo treatment for drug or alcohol dependency and
  • people subject to equivalent provisions under Scottish criminal justice legislation.

What you will have to pay towards your direct payments

If you are aged 18 or over, the council will assess you to find out how much you will have to pay towards your support. This is called a financial assessment. The amount you have to pay will be taken from the direct payment, and you will be asked to add your contribution onto the direct payments card.  If you are having difficulty setting this up, the council can help.

Anyone  can  have  free  advice, information  from  the council and all assessments are free. Most adult care services however have to be paid for and you will be expected to contribute toward the cost of services you may receive, if this is possible. The council may be able to help with these costs, however to do this your financial circumstances will need to be taken into account. You do not have to tell the council about your financial situation if you don’t want to, but if this is the case, the council will assume that you are able to afford to pay for your care yourself.

How direct payments are monitored

When your care and support plan has been set up, after a couple of weeks your social worker will check everything is working for you. Your social worker will then review your support needs once a year. Each review will check that your personal budget is right, that you are comfortable using the direct payment, and that the way you are using it is helping to meet your outcomes.  The council will also provide guidance and support to enable you to meet your responsibilities and the conditions required to receive a direct payment.

If the amount of money you receive is clearly not enough to achieve the agreed outcomes and meet your eligible unmet needs, the council will reassess and either allocate more funds, or work with you to show you how to make the budget achieve the desired outcomes. If however you end up not needing as much money as expected, an adjustment may be made to the amount you receive and the council will discuss with you claiming back any unspent money. Reclaiming unspent money can also happen outside of the review.

The council can look at your card account statements online and see payments you have made from your account. There is no need therefore to send bank account statements to the council or fill in regular monitoring records.  The council may contact you to query payments from your account and check they are in line with your care and support plan.

You will need to keep paperwork relating to your personal assistants (if you employ them -  find more information on Employing a personal assistant) and copies of invoices or receipts for payments made, as the council may ask to see these. The council will check with you that you are fulfilling your legal responsibilities as an employer.

The council do not expect you to keep detailed accounts, but there are some records you must keep. The council may request them should a spot check be required by the council’s monitoring team, internal or external auditors. If you need to purchase stationery to maintain your files, you can claim the cost from your direct payment account.

The following information is for your guidance only, you may want to check with HM Revenue and Customs who can provide further guidance on employer records. Alternatively, if you have chosen to use a support organisation,  contact them for advice.

The examples shown below have been extracted from information and guidance provided by CIPFA, the Chartered Institute of Public Finance and Accountancy.



 How long to  keep them

Major financial records

The council normally have access to these via the direct payments card account, which does not use chequebooks or paying in books. However, if you are using another account and not the payment card account, you may need to keep summaries of any expenditure, such as bank statements, chequebooks, paying in books, and bank account interest details.

Seven years

Everyday supplies and services

Invoices, receipts for direct payments items, agency fees, PA wage slips, domestic help, special supplies, leisure activities, and courses. Also receipts for equipment such as a raised toilet seat. These are supporting documents for any queries regarding the above records in the major financial section

Two years after date of purchase

Major equipment and non-permanent adaptations

Expenditure on major equipment or major non-permanent adaptation paid via the direct payment. Records of warranties, maintenance agreements

Life of equipment plus one year

Permanent adaptations

All records relating to permanent major adaptations


Employer records

Employer records – advice on this is part of the role of your support provider, you can also receive advice from HM Revenue and Customs

Contact your support provider of HMRC for advice


Using agencies

You may want to use an agency to provide your support via a direct payment. In this case, you will not be the employer, the agency will be responsible for managing the staff and will pay their wages.

You could choose for the council to arrange agency support on your behalf. One of the advantages of receiving a direct payment for agency support is increased flexibility. If you want to make changes to the times and dates of your support, you can liaise directly with the agency and do not have to confirm this with the council. You can also return to the same agency if you have had a spell in hospital. If the agency is not working out for you, you can choose another agency to work with you.

The agency will ask you to sign their terms and conditions, so that you are clear on how the agency will work with you and what they have agreed to provide.

You pay the agency’s invoice from your direct payments bank account. Always check that you have discussed all of your arrangements with the agency, and that the agency has given you a breakdown of all their costs in writing. You do not want to have any unexpected costs, such as for example additional charges for mileage and bank holidays  that you have not previously agreed to pay.

Before deciding to buy a service from a particular agency, the council recommends that you ask:

  • about their registration with the Care Quality Commission (CQC) - it is a requirement that all care agencies are registered with the CQC, if they provide personal care for people who are unable to provide it for themselves, because of old age, illness or disability.
  • to see a copy of their insurance policy (for more information on insurance, read Employing a personal assistant for more information
  • the agency if all their staff have had a Disclosure Barring Service (DBS) check
  • the agency how it manages its staff and how often someone will come and check you are happy with the service being provided
  • if the agency employ the staff and meet all their tax and national insurance payments
  • how they would deal with any complaint you may have
  • what cover will be in place to cover staff holiday, sickness etc
  • what training the agency provides for its staff and what qualifications and experience they have
  • if they carry out a risk assessment for you and the staff
  • if you will be given copies of the hours that the staff work so that you can pay the correct amount
  • how much it will cost you to use their service and how to pay the money to them
  • ask for the full cost of your support in writing
  • how much consistency they can offer in terms of them providing the same staff to support you.

If the agency tells you they will not be able to continue providing care for you, you can look into alternative providers. If this means however that you will be without care for a period of time, you should contact the council as soon as possible.

Managing direct payments on your behalf

A person may have the mental capacity to consent to direct payments, but need additional support. In this case direct payments can be made to a ‘nominated person’ who can help the person to manage the direct payments.

A nominated person can act on a person’s behalf to either receive the direct payment and/or take on the employment responsibility.

A nominated person cannot also act as a personal assistant and be paid to provide care and support.  People working as a personal assistant should also not be responsible for handling the finances or managing the direct payment. In this case, a managed account could provide the solution.

Managed accounts provide the flexibility and choice of direct payments, with the financial side managed by a direct payments support provider. The person stays in control of their support and makes decisions about how their support is delivered. Managed accounts are not suitable if the person lacks capacity – find more information on ‘authorised persons’ below.

In general, the council will start with the person taking as much control as possible over their own support, with help from the support provider, social worker and carer. The council will look into whether a ‘high level’ support package would help that person to manage the direct payment (such as developing their skills so that they are able to manage their direct payments card and direct payment wherever possible). If this is not possible, a managed account will be considered.

If the council decides that a managed account will help someone manage the direct payment, they will pay the direct payment funds to the direct payment support provider. All payments such as personal assistant wages or agency invoices are made on a person’s behalf by the direct payment support provider. Payments are made from the direct payment card account, so the council can see the payments that have been made and the balance of the account.

People who are not assessed as needing this support may  choose to buy a managed account service from one of the direct payments support providers, but the cost of this will have to be met from their direct payment.

Managed accounts are not always needed in the long term, and the direct payments support provider can support the person to take responsibility for the finances, if appropriate.

Acting as an authorised person

The council has a duty to offer direct payments to people over 18 who lack mental capacity to consent to them, when there is an authorised person to receive and manage direct payments on their behalf, and to arrange and pay for services and support. It must be in the best interests of the person lacking mental capacity to have direct payments.

If it appears to the social worker and/or carers of the person that their needs might be more appropriately met with a direct payment, but it appears that the person does not have mental capacity to make the decision, a further assessment (Mental Capacity Act Assessment) will be made. This will confirm if the person has the capacity to decide for themselves whether or not to choose a direct payment for their support.

If the person is assessed as lacking capacity to decide to have a direct payment, but it is still in their best interests to have their support provided by a direct payment, then the council will look to appoint an authorised person to receive and manage the payment for them. This should be someone who has the “strongest incentive” to ensure the money is properly spent on the appropriate care and support identified in the person’s care and support plan. The authorised person must give their consent to receive the direct payment and agree to all the responsibilities involved. They must at all times act in the best interests of the person who lacks capacity.

The authorised person will often (but not always) have been given a Lasting Power of Attorney or have been appointed by the Court of Protection as a Deputy under the Mental Capacity Act.

Usually the authorised person will be a family member or friend, who may previously have been involved in the care and support of the person. The authorised person would not be able to pay themselves to provide care and support to the service user

If you have agreed to act as the authorised person, a social worker will complete a checklist. This is to gather  information the council needs to be satisfied that:

  • you are the most appropriate person to receive and manage the direct payment
  • you will act in the best interests of the person lacking capacity.

If you have been given a Lasting Power of Attorney or appointed as a Deputy by the Court of Protection, the social worker will ask to see your documentation.

The authorised person must act in the best interests of the person lacking capacity by:

  • doing whatever is possible to permit and encourage the person to participate, or to improve their ability to participate, as fully as possible, in acts and decisions
  • trying to identify and take into account all the things that the person would take into account if they were acting for themselves, including their past and present wishes and feelings and any beliefs and values which would be likely to influence their decisions
  • not making assumptions about what might be in the interests of the person lacking capacity simply on the basis of the person’s age, appearance, condition or behaviour
  • consulting others when making decisions
  • ensuring a record is kept of the process of working out the best interests of that person (for any major decisions)

As the authorised person you will need to comply with the Direct Payment Best Interests Agreement. The council has a duty to make sure vulnerable people are protected.  For this reason the council wants people who agree to become the authorised person to be clear about what is expected of them. This ensures they can make a considered and informed decision to become the authorised person.

You should read the agreement carefully before signing it. If there is anything you do not understand, ask the social worker who is working with you to explain.

Problems or issues with direct payments

Occasionally things will happen or changes occur and you will need to talk to someone about what to do.

If your eligible unmet needs are not being met, the council may have a responsibility to become involved to help you. A review, or reassessment of your needs may need to take place. The council may have to arrange services for a period of time, or support you to enable you to carry on using direct payments. If you are assisting with managing direct payments for someone else, you should contact the council and let them know about any changes.

You will have discussed an emergency plan about what you will do if your personal assistant is off sick,  takes annual leave or does not show up for work. Sometimes though the best plans do not always work. The council has a responsibility to assist you to meet your outcomes as identified in your support plan. If this happens, contact the council on 01454 868007.

If things are not going well with your personal assistant, contact your current direct payment support provider as soon as possible. Any employment situation can run into problems with absence, performance issues and sometimes disputes. The sooner these issues are addressed the better. You can also get advice and guidance from the Advisory, Conciliation and Arbitration Service (ACAS) website:

Mistakes can sometimes happen when using direct payments. If they do, contact the council on 01454 868007 so that advice and support can be provided to you.

If you want to change how you use your personal budget and have services arranged by the council instead of a direct payment, contact the council on 01454 868007.

How to apply for direct payments

If you already get a care and support service from the council, discuss direct payments with your social worker or social work assistant. They will need to make sure that you are able to consent to getting a direct payment. They will also discuss with you what support you will need to set up the direct payment.

If you do not already receive a service, you will have an assessment with a social worker. They will help you to work out what support and assistance you need, and whether you meet the criteria for help from the council to meet these needs. You can request an assessment by contacting the council on 01454 868007 and find out more by reading this article.

During an assessment, the social worker will help you identify what you want to achieve and what outcomes you have for your support. You will then be able to write a care and support plan, setting out how you will meet your outcomes and needs, and the amount of money needed to do this (your personal budget).

A care and support plan is a document which outlines the support you need and how you want to receive it. It forms an agreement between you and the council indicating how your personal budget will be spent and on what. You can do this yourself, or with the help of the social worker, your family and friends, or possibly an external provider. The care and support plan will need to be approved and then your support will start.

Find out how the council assess care and support needs.

You will be asked to sign a direct payments agreement which sets out your responsibilities in taking on a direct payment.  Ask your social worker if there is anything you are not sure about.

Support available for direct payments

Some people are able to manage a direct payment without help,  but  many  people  receive  some  support,  particularly  in  the  early  days when setting up a direct payment.

If  you  choose  to  use  direct  payments  you  can  get  practical  support  and guidance to help you get things started.  The article Direct payments support providers has information on how you can get support with your direct payments.

What happens if someone receiving a direct payment dies

When someone receiving a direct payment dies, the council needs to be informed to stop the arrangements that are in place.

The direct payment support provider may also be involved during this time to ensure all of the employer responsibilities are completed correctly, and any outstanding invoices are paid. For example, if the deceased person had been employing a personal assistant, this person will need to be paid for the work that they have already completed including any redundancy or annual leave pay due to them. The redundancy payment due to each employee under the statutory redundancy payment scheme depends on the individual’s age and length of service. If you do not know who your direct payment support provider is, you should contact the council on 01454 868007 who can advise you of who supplies this support.

The money has been provided to buy services for someone who needed social care support. It does not form part of the person’s estate and cannot be used for any other purpose other than contractual obligations that need to be met. It cannot be used for such things as funeral expenses.

Any money left in the direct payment account once all due payments have been made will be reclaimed by South Gloucestershire Council. The council will advise you how this will be done, in a way that is straightforward. The council can also help to make final payments from the direct payment account.

If you are the executor of the will, you will need to find out if there are any contractual obligations or payments that need to be made from the direct payment account.

If you are not the executor of the will, it is very important that you explain the direct payments scheme to the executor. They may not know how direct payments work. They need to be made aware that the bank account is a direct payment account and that the remaining money in it, after all contractual and legally required sums have been paid out, needs to be returned to the council.

What happens if I go into hospital?

One thing you may want to think about is what happens if you are admitted to hospital.

Your direct payment will continue, and you can choose to have some personal care tasks done by your PA rather than hospital staff (your direct payment will usually allow this).

Contact the ward or department you have been admitted to and agree the arrangements. Their acceptance will depend on what you are being treated for and how long you will be in hospital.