Direct payments and personal budgets for social care Standard Note:
2 November 2012
Manjit Gheera, Social Policy Section
Social Policy Section
The aim of Direct Payments is to increase individualsâ€™ independence and choice by giving them control over the way services they receive are delivered. Direct payments are cash payments made in lieu, either fully or partly, of services from local authority social services. The payment must be sufficient to enable users to purchase services to meet their needs, and must be spent on services that users need. Personal budgets are an allocation of funding given to users after a social services assessment of their needs. Users can either take their personal budget as a direct payment, or - while still choosing how their care needs are met and by whom - leave councils with the responsibility to commission the services. Or they can have a combination of the two. This note gives a brief overview of the rules governing the provision and use of direct payments for social care and provides information on the development of personal budgets for care. This note applies to England only.
This information is provided to Members of Parliament in support of their parliamentary duties and is not intended to address the specific circumstances of any particular individual. It should not be relied upon as being up to date; the law or policies may have changed since it was last updated; and it should not be relied upon as legal or professional advice or as a substitute for it. A suitably qualified professional should be consulted if specific advice or information is required. This information is provided subject to our general terms and conditions which are available online or may be provided on request in hard copy. Authors are available to discuss the content of this briefing with Members and their staff, but not with the general public.
Self-directed support: Direct Payments and Personal Budgets
2.2 Eligibility for Direct Payments
2.3 How much will you get?
2.4 Financial contributions
2.5 Using direct payments
What can direct payments be used for?
Commissioning care services
2.6 Other factors affecting the use of direct payments
Local authority services
Payments to close relatives
Personal Budgets for care
Self-directed support: Direct Payments and Personal Budgets
‘Personalisation’ or ‘self-directed support’ are terms used by many social services departments to describe a package of services for people with disabilities to enable them to live as independently as possible in their own communities. The package of support may include providing people with direct payments to buy their own care, or personal budgets so that people have greater flexibility in choosing services. Direct payments are local council cash payments for people who have been assessed as needing help from social services, and who would like to arrange and pay for their own, independently contracted, care and support services. 1 Personal budgets, which are currently being rolled out by councils, are an allocation of funding given to users after a social services assessment of their needs. Users can either take their personal budget as a direct payment, or - while still choosing how their care needs are met and by whom - leave councils with the responsibility to commission the services. Or they can have a combination of the two. This note provides information on the rules governing the provision of direct payments. It also provides an update on the roll-out of personal budgets.
Direct payments were first introduced in 1997 under the Community Care (Direct Payments) Act 1996. Initially, local authorities were given a power, rather than a duty, to make payments for working age disabled adults. The Government indicated that the user group for direct payments could be expanded without the need for further legislation, should the system prove successful. The discretion under the 1996 Act was extended to include older people in 2000, and further legislation introduced in 2001 to include parents of disabled children and carers. 2 A duty to provide direct payments was introduced in 2003 when regulations made under section 57 of the Health and Social Care Act 2001 made it mandatory for councils to make direct payments to individuals who consented to, and were able to manage them, with or without assistance. 3 In 2009, provision was extended to persons appointed to receive direct payments on behalf of individuals who lack mental capacity and to persons subject to mental health legislation. 4 The total number of service users using direct payments in 2010-11 was 125,000, up from 107,000 in 2009-10. 5
The making of direct payments is a social services function within the meaning of section 1A of the Local Authority Social Services Act 1970 and a National Indicator (N130) by which council performance is rated. Carers and Disabled Children Act 2000 which inserted new section 17A into the Children Act 1989 Community Care, Services for Carers and Children’s Services (Direct Payments) (England) Regulations 2003 (SI 2003/762) Since revoked and replaced by the Community Care, Services for Carers and Children’s Services (Direct Payments) (England) Regulations 2009 (SI 2009/1887) Community Care, Services for Carers and Children’s Services (Direct Payments) (England) Regulations 2009 (SI 2009/1887) NHS Information Centre for Health and Social Care statistics, March 2012 (‘services users’ do not include carers).
Eligibility for Direct Payments
Since direct payments are made in lieu of social care services, they can only be given to a person who has been assessed as qualifying for social care. The vast majority of people who are assessed as needing services have a right to direct payments. If a person consents, local councils are under a duty to make direct payments to anyone who is able to manage them (either alone or with the help of a nominee). In some cases, councils have a power rather than a duty to provide direct payments. Otherwise direct payments must be made to all individuals who are eligible to receive them and who want them. The following groups should be offered the choice of having their needs for a relevant service met through direct payments, once they have been assessed as eligible: Older people and disabled people aged 16 and over This includes, in particular older people who, despite being the largest single group of people using community care services, have been the least likely to be offered and to get a direct payment. This may also include disabled adults and disabled young people aged 16 or 17. Disabled children and parents A parent, or other person with parental responsibility 6 for a disabled child, and disabled persons with parental responsibility for a child should be offered direct payments. Carers aged 16 and over for their own needs People whom the council decides need services because they provide or intend to provide a substantial amount of care on a regular basis for someone aged 18 or over. Carers (but not employees, persons working under contract or for a voluntary organisation) may obtain direct payments in respect of their own needs for services but not for services in respect of the needs of the person they care for. An appointed suitable person on behalf of someone lacking mental capacity All councils must offer direct payments to certain eligible adults who lack the capacity to consent to receive them. 7 Direct payments can be made to a willing and appropriate â€˜suitable personâ€™, such as a family member or friend, who receives and manages the payments on behalf of the person who lacks capacity. People subject to mental health legislation Before November 2009 people subject to mental health legislation were excluded from receiving direct payments. Regulations have now removed most of those exclusions with the result that councils can make direct payments to people subject to mental health legislation. However, in some cases councils will have a power, rather than a duty to make payments to such people. These are cases concerning:
Not all parents have parental responsibility for a child Since November 2009
• ‘restricted patients’ who are on conditional discharge under the Mental Health Act 1983 8 • services which a person is compelled to accept as a result of provisions under mental health and criminal justice legislation. 9 When exercising their discretion to offer direct payments to people subject to conditions relating to mental disorder, direct payments guidance requires councils to be ‘flexible in their approach and prepared to support individuals to take up direct payments wherever possible.’ 10 There are limited circumstances when direct payments should not be offered. They are cases concerning individuals subject to conditions by the courts in relation to drug and/or alcohol dependency provisions. 11 2.3
How much will you get?
It is for the council to decide on the amount of a direct payment based on an assessment of the service user’s needs. It must be equivalent to the council’s estimate of the reasonable cost of providing the service concerned. Guidance explains that the direct payment: [S]hould be sufficient to enable the recipient lawfully to secure a service of a standard that the council considers reasonable to fulfil the needs for the service to which the payment relates. There is no limit on the maximum of minimum amount of a direct payment within the in the amount of the care it is intended to purchase or on the value of the direct payment. 12
Councils are not obliged to fund the costs associated with an individual’s preferred service if, taking into account the user’s assessed contribution, the costs exceed the council’s estimate of the reasonable cost of securing that service and the service can be secured more cost effectively in another way. It is however, open to direct payments recipients to use their own resources to purchase additional, or better quality services if they wish to do so. Individual councils determine how frequently payments should be made, but they should inform recipients how and when payments will be made and the procedures for making additional payments in an emergency. Direct payments can be paid directly into a recipient’s bank, building society or other account. In cases where a service user believes that the amount of a direct payment is insufficient to meet their needs, they do not need to accept the amount. Where cases cannot be resolved through discussions, the local authority complaints procedure should be followed. While a complaint is being investigated, an individual may choose to manage on the amount of the direct payment offered or to refuse it. If a person does not agree to the direct payment, the council remains responsible for arranging assessed care services for the individual’s needs.
10 11 12
Or the equivalent Scottish legislation The provisions are those in the Mental Health Act 1983, the Criminal Procedure (Insanity) Act 1964, the 1991 and 2003 Criminal Justice Acts, the Powers of Criminal Courts (Sentencing) Act 2000 and similar Scottish legislation set out in Annex B of the Department of Health’s Guidance on direct payments Department of Health, Guidance on direct payments, England 2009 (as amended in October 2010), para 213 As set out in Annex C of the guidance Department of Health, Guidance on direct payments, England 2009 (as amended), para 111
In common with other non-residential social care services, councils can ask recipients of direct payments to make a financial contribution to the cost of their care package. Regulations require councils to have regard to the recipientâ€™s means when determining the amount (if any) it is reasonably practicable for the beneficiary to contribute towards their social care package. 13 The Department for Healthâ€™s Guidance on Direct Payments provides: There are two ways in which an individual may make a financial contribution to the cost of their care. The council may make direct payments that are equivalent to its estimate of the reasonable cost of the service and subsequently seek reimbursement (gross payment). Alternatively, the council may deduct from its estimate the assessed contribution before the payments are made and make direct payments net of the amount that the individual is expected to make (net payment). Councils should take into account the views of users when producing their policy on charging, allowing sufficient flexibility to respond to individual circumstances. 14
Councils may not seek financial contributions for direct payments made in lieu of services which must be provided for free. Accordingly, charging restrictions apply for after-care services provided under the s117 of the Mental Health Act 1983 and services for children in need and their families under s17 of the Children Act 1989. 2.5
Using direct payments
What can direct payments be used for? Direct payments are intended to allow a service user flexibility to purchase independently contracted services which the local authority has assessed them as needing. This could mean that a service user uses direct payments to employ a personal assistant of his choice or arrange day care in the community. Short term needs Direct payments can be given to people with short term needs to support a return to independence, for example, using them to employ home help following a stay in hospital. They might also be used by a parent with parental responsibility to arrange short breaks for their disabled child. Direct payments cannot currently be used to pay for long term care in a care home. 15 They may however be used to purchase short term stays in care homes not exceeding a period of four consecutive weeks in any twelve month period. The time limit is imposed to avoid inappropriate use of residential accommodation. Direct payments can however be used by individuals in care homes for non-residential care services. They may be useful to people in residential accommodation who wish to use direct payments to try independent living outside of a care home. They can also be used by people in care homes to buy a day care service place or an alternative day time activity. Long term needs Direct payments can be offered in lieu of services agreed in an individualâ€™s care plan. Direct payments might be used to enable users to secure assistance with personal and domestic 13 14 15
SI 2009/1887, reg 9(2) Department of Health, Guidance on direct payments, England 2009 (as amended in October 2010), para 120 The July 2012 social care white paper, Caring for our future: reforming care and support, contains a commitment to strengthen the use of direct payments, including piloting their use in residential care from 2013.
tasks, such as daily activities like getting in and out of bed, dressing, preparing a meal or going shopping. They might also be used for more complex needs such as enabling a deaf or a blind person to secure the services of a guide or communicator. For disabled children, direct payments will usually be a long term commitment but frequent reviews will be needed to adapt services as the needs of the child change with age. Equipment Local authorities may make direct payments to enable people to purchase equipment themselves that would otherwise have been provided by the social services department. They can also be used to make adaptations which would otherwise have been provided or arranged by social services. Direct payments cannot be used to purchase equipment which the council is not responsible for, for example, equipment the NHS provides. Direct payments are not a substitute for disabled facilities grants. Commissioning care services Direct payments can be used to commission care services under a number of contracts. A recipient may wish to employ a carer directly, contract services from a self-employed carer or use the services of an agency to provide services. Where direct payments are used to employ care staff or other personal assistants, the recipient of the direct payment must comply with the legal responsibilities of an employer. Such responsibilities will include providing a statement of employment particulars, meeting the national minimum wage, paying taxes and statutory benefits such as sick pay and annual leave. Councils will be able to advise recipients on how to manage these responsibilities. For detailed information regarding employment issues, individuals can refer to the Department of Healthâ€™s A guide to receiving direct payments from your local council. Where a carer is employed on a self-employed basis, an employer will not be responsible for paying their tax and national insurance contributions. A variety of different factors play a part in judging whether or not someone is self-employed, such as the degree of control a contractor has over the way the work is done. A toolkit for determining the employment status of a worker is available on the HMRC website. It is, however, advisable to contact a local tax office or HMRC to check the tax implications of contractual arrangements with a worker. 2.6
Other factors affecting the use of direct payments
Local authority services In addition to the limitations on the use of direct payments referred to above, direct payments cannot be used to purchase local authority services. Direct payments are intended to be used by the service user to buy independent care rather than have services provided directly by the council. Information on personal budgets, which can be used to purchase local authority services, is available in section 3 of this note and on the Department of Health website. Payments to close relatives Except in limited circumstances, regulations do not permit councils to allow direct payments to be used to employ close relatives to deliver services.
Accompanying guidance to the regulations explains: This restriction is not intended to prevent people using their direct payments to employ a live-in personal assistant, provided that the person is not someone who would be usually excluded by the Regulations. The restriction applies where the relationship between the two people is primarily personal rather than contractual, for example, if the people would be living together in any event. 16
The regulations do, however, allow councils a limited discretion to allow payments to be made to a relative where the council is satisfied that securing the service from that person is necessary to satisfactorily meet the prescribed person's need for that service. 17 The Department of Health’s guide to receiving direct payments provides the following advice for service users who wish the council to exercise its discretion in relation to relatives: Can I use direct payments to employ my relatives? Direct payments are not intended to replace existing support networks within families and communities. For this reason, you may not normally use direct payments to secure a service from: •
Your spouse or partner;
A close relative that you live with.
You should discuss your situation with the local council if you think that any person you would like to employ or purchase services from might fall into one of these categories. In exceptional circumstances, your local council may be prepared to consider allowing you to use direct payments to pay a close relative who shares the same household. 18
Personal Budgets for care
Unlike direct payments, personal budgets for social care do not currently have a legislative basis. The commitment to provide personal budgets is set out in the Putting People First 19 ‘concordat’, signed by Central Government, Local Government, the professional leadership of adult social care and the NHS. The concordat set out the previous Labour Government’s social care transformation programme’s objectives, which included: •
Personal budgets for everyone eligible for publicly funded adult social care support other than in circumstances where people require emergency access to provision.
Direct payments utilised by increasing numbers of people, as defined by locally set targets in Local Area Agreements. 20
The aim of personal budgets is to give ‘the vast majority of people who receive funded care their own personal budgets so they can choose the support services they want for
Department of Health, Guidance on direct payments, England 2009 (as amended), para 136. Community Care, Services for Carers and Children’s Services (Direct Payments) (England) Regulations 2009, reg 11(1) Department of Health, A guide to receiving direct payments from your local council, September 2009 HM Government, Putting People First: A shared vision and commitment to the transformation of Adult Social Care, December 2007. Ibid
themselves or a family member.â€™ 21 However, the concordat recognised that a system of personal budgets would not be suitable for everyone. It provided: We will always fulfil our responsibility to provide care and protection for those who through their illness or disability are genuinely unable to express needs and wants or exercise control. However, the right to self-determination will be at the heart of a reformed system only constrained by the realities of finite resources and levels of protection, which should be responsible but not risk averse. 22
The policy is currently being rolled out so not all councils may yet offer personal budgets to everyone. The previous Government expected the reforms to be in place by 2011, allowing the majority of people in receipt of social care to have the opportunity to have a personal budget. The Coalition Government previously made a commitment to have all councils in England offering personal budgets by 2013, 23 but this target was reduced to moving 70% of users on to a personal budget by April 2013 in a speech made by care minister Norman Lamb in October 2012. 24 3.1
In July 2012, the Government published its white paper on social care reform, Caring for our future: reforming care and support in which it stated a commitment to enact legislation on personal budgets: We will legislate to ensure that everyone can take control of their care and support by giving them an entitlement to a personal budget. People will be provided with a personal budget as part of their care planning process. This will ensure that carers and people who use services have the opportunity to take control of their care and support if they want to do so.
Provisions in the draft Care and Support Bill, 25 published alongside the white paper, would place an entitlement to personal budgets in legislation. The Bill would also strengthen entitlement to direct payments. Pre-legislative scrutiny of the draft Bill is expected to be undertaken in 2012 with a Care and Support Bill introduced in 2013. 26
The Department for Health Guidance on direct payments 27 aims to assist councils with social services responsibilities for making direct payments. The Department of Health A guide to receiving direct payments from your local council provides advice to people who are thinking about or who are already getting direct payments from their local council social services department. Helpful advice on employment law issues is available on the Directgov and Businesslink websites.
23 24 25 26 27
Department of Health Press Release, Personal care budgets and extra ÂŁ520 million to transform care for older and disabled people, 10 December 2007. HM Government, Putting People First: A shared vision and commitment to the transformation of Adult Social Care, December 2007. Department of Health press release, Personal budgets for all and more breaks for carers, November 2010 Community Care, Lamb scraps 100% personal budgets target, 26 October 2012 Cm 8386 July 2012 Timeline in Caring for our future: progress report on funding reform, Cm 8381, p38 As amended in October 2010
The Department for Children Schools and Families A parentâ€™s guide to direct payments provides advice specifically for people with parental responsibility for disabled children. The Department for Healthâ€™s Prioritising need in the context of Putting People First: A whole system approach to eligibility for social care is guidance designed to assist councils in setting their social care eligibility criteria. The guidance was revised in February 2010. 28 Childrenâ€™s needs are assessed under the Framework for the Assessment of Children in Need and their Families.
It was previously known as the Fairer Access to Care Services guidance