Personal Budgets and Direct Payments

Direct Payments are a way of managing some or all of a Personal Budget.

Some or all of the budget is paid directly into the parent/carer’s bank account, and they have responsibility and control for spending it to achieve the planned outcomes for the child or young person.

Personal Budget

A personal budget is an agreed amount of money that is allocated to a family from the local authority, and in some cases, from other services.

After the parent/carer and child/young person have had a social care assessment, the Children’s Disability Team Resource Panel will agree a care plan and the right level of funding for a child/young person’s needs.

The personal budget will be the overall cost of the care and support the local authority provides or arranges. Parents/carers will be able to decide how the money is spent in order to support children and young people to achieve the outcomes in their care plan.

For both education and social care the local authority must be satisfied that the person who receives the Direct Payment: is able to manage the Direct Payment either by themselves or with whatever help the authority thinks the applicant or nominated person will be able to access; will use them in an appropriate way to meet the needs in question and that they will act in the best interests of the child or young person.

Regulations governing the use of Direct Payments for special educational provision place requirements on both local authorities and parents before a Direct Payment can be agreed. These include requirements to consider the impact on other service users and value for money.

Direct Payments for health require the agreement of a Care Plan between the Integrated Care Board and the recipient.

Things to think about before choosing Direct Payments

Direct Payments can be a good way to be creative and flexible when managing a child/young person’s care but they can involve additional work for the parent/carer to arrange and manage the care provided.

Parents/carers will need to make their own assessment of the organisation or person who may provide services to their child, and they will need to check they have suitable clearance to work with vulnerable children.

If employing someone directly, the parent/carer will need to manage tax, National Insurance and pension issues for the person who they employ.

Further information on Direct Payments and Personal Budgets within South Tyneside can be found on the South Tyneside SEND Local Offer website.

A direct payment may be agreed if a disabled child/young person is eligible through a Care Plan, children in need plan or short breaks plan (LA funded), or the family’s needs (by virtue of their role as carers assessed through a carers assessment for a disabled child) or who have Education, Health and Care Plans (EHCP), which may contain elements of education, social care and health funding. Under the Children and Families Act 2014, this covers those aged 0-25 having special educational needs and disabilities.

Direct payments are given to 16 and 17-year-old disabled young people directly rather than to their parents or carers. The young person can then decide which services to use. This only applies if the young person is able to organise their own care and support. 

Direct Payments can also be made to a willing and appropriate person on a child or young person’s behalf if they lack the mental capacity to agree to and manage Direct Payments themselves.

Direct Payments cannot be used to pay for services from a spouse, partner or a close relative living in the household unless the local authority consider it is necessary to do so. However, a direct payment can be used to employ a relative if they are not living in the household.

Direct Payments are usually paid in advance into a bank or building society account specifically set up for this purpose, as a one off payment or on a 4 weekly basis and this bank account should not be used for any other purpose. If the direct payment is assessed as being needed at key times e.g. school holidays, then payment will be made accordingly.

The arrangements for Direct Payments will be included in the child's/young person's Education, Health and Care Plan, following an education, health and care needs assessment. See Children and Young People Aged 0-25 with Special Educational Needs and Disabilities Procedure.

See information about Direct Payments for home to school transport.

• Employing a Personal Assistant (PA);
• To take the young person/child into the community to access an activity, support inclusion, going to a club etc.;
• To work with the child directly within the home, to give parents and siblings a break;
• To stay overnight to give respite to parents;
• Or a registered childminder or child home carer (for children aged under 8).

• Using an approved agency to provide direct care to meet your child/family's needs;
• After school clubs and holiday play schemes for your disabled child;
• Residential overnight breaks for your disabled child;
• By agreement with the Team Manager for direct payments, any service which meets your assessed need for a short break;
• Special educational provision specified in an education, health and care plan.

When a child or young person under 16 years needs to go into hospital, the parent, carer or the person managing the Direct Payment, should advise the local authority straight away to discuss the continuation of the payment.

It is possible that the payment will continue for a time-limited period, if only to allow for the person managing the Direct Payment to ensure that any contractual obligations around termination of the support can be met. However, there might also an issue of continuity of care post-discharge to consider in some instances.

The Personal Assistant will be paid for up to 6 weeks while the child is in hospital to allow continuity of care. The Personal Assistant must still be available during their contractual hours in case parents require support with hospital visits.

If the child or young person remains in hospital after 6 weeks a request to the Team Manager to continue to pay the Personal Assistant is made, this can be in the form of full pay or retained of 50% depending on how much support the Personal Assistant is giving.

Where a Young Person is 16 years or older and in receipt of Direct Payments, hospitalisation does not necessarily mean that the Direct Payments should cease. Guidance advises that consideration should be given by the local authority, the carer, the holder and NHS Trust as to how the payments might be used to meet non-health needs or to ensure that the employment arrangements can be maintained. For example, the payment holder may prefer some personal care tasks to be undertaken by the carer rather than hospital staff. However, the personal care and medical input need to be tailored so as not to interfere with the medical treatment. (Terminating or suspending the carer's employment may lead to a delay of continuity of care and a delay in discharge). 

In instances where the authorised or nominated person requires hospital treatment, the local authority must conduct an urgent review to ensure the holder continues to receive the care and support they need. This might include the duties to be carried out by a temporary nominated person, or through short-term authority arranged care/support.

• Paying a spouse, partner or a close relative living in the household for services unless the Local Authority consider it necessary to do so. However, a direct payment can be used to employ a relative if they are not living in the household;
• Employing someone without a Disclosure and Barring Service check, or someone subject to a drug or alcohol treatment requirement, youth rehabilitation order or released on licence;
• Permanent residential accommodation, though they can be used for occasional short breaks, if the local authority agrees, for up to 120 days in any 12 month period. (Note: where two periods of short term care are 4 weeks or less apart, then the cumulative total of the stays should be added and not exceed 4 weeks if the stay is to be funded by Direct Payments).
• Direct payments for education cannot be delivered at an early years setting, nursery or college premises without the agreement of the Manager, Head Teacher or Principal of that institution. If it is agreed, the person working with the child/young person on the site must comply with the institution’s policies and procedures.

Direct Payments allow parents and young people greater choice flexibility and control, to employ their own workers at times convenient to them and in the way they wish, to provide an individual service to meet their needs. Payments made do not affect welfare benefits as they are not classed as income.

Where the local authority decides not to make Direct Payments it must inform in writing the child's parent or the young person of its decision and reasons in a format that is accessible to them and in line with the Data Protection Act. It must also advise of their right to request a review of the decision.

The local authority must monitor and review the use of Direct Payments by the recipient. In addition, a recipient may make a request for the local authority to review the making and use of Direct Payments and the local authority must then consider whether to carry out a review (see also Section 6, Hospital Stays).

When carrying out a review, the local authority must consider whether:

• It should continue to secure the agreed provision by means of Direct Payments;
• The Direct Payments have been used effectively;
• The amount of Direct Payments continues to be sufficient to secure the agreed provision;
• The recipient has complied with their obligations on the use of the Direct Payment.

Following a review the local authority may:

• Substitute the person receiving the Direct Payments with a nominee, the child's parent or the young person, as appropriate;
• Increase, maintain or reduce the amount of Direct Payments;
• Require the recipient to comply with either or both of the following conditions:
  • Not to secure a service from a particular person;
  • To provide such information as the local authority considers necessary.
• Stop making Direct Payments.

Where the local authority decides to reduce the amount of Direct Payments, it must provide reasonable notice to the recipient, and must set out in the notice the reasons for its decision.

The local authority must reconsider its decision, where requested to do so by the recipient, but is not required to undertake more than one reconsideration of a decision. When conducting its reconsideration, the local authority must consider the representations made by the recipient (and where the recipient is a nominee, any representations made by the child's parent or the young person) and must then provide written reasons to the recipient (and to the child's parent or young person, where the recipient is a nominee) of its decision following the reconsideration. The local authority may reduce Direct Payments following reasonable notice despite the fact that a request for reconsideration has been made.

The local authority may require the recipient to repay part or all of the direct payments, where:

• The circumstances of the child or young person have changed in a manner which has an impact on the appropriateness of the agreed provision;
• All or part of the Direct Payments have not been used to secure the agreed provision;
• Theft, fraud or another offence may have occurred in connection with the Direct Payments;
• The child or young person has died.

It must give notice in writing to the recipient, setting out the reasons for the decision, the amount to be repaid and a reasonable timescale within which the amount must be repaid.

The local authority must reconsider its decision where requested to do so by the recipient (but is not required to undertake more than one reconsideration of a decision). When conducting its reconsideration, the local authority must consider the representations made by the recipient (and where the recipient is a nominee, any representations made by the child's parent or young person) and must then provide written reasons of its decision following the reconsideration to the recipient (and to the child's parent or young person, where the recipient is a nominee).

The local authority may only seek repayment of any portion of the Direct Payments that has not already been spent on the agreed provision.

The local authority must stop making Direct Payments if:

• The recipient has notified the local authority in writing that they no longer consent to receive the Direct Payments;
• The recipient ceases to be a person to whom a Direct Payments may be made;
• Following a review, it appears to the local authority that:
  • The recipient is not using the payment to secure the agreed provision;
  • The agreed provision can no longer be secured by means of Direct Payments.
• At any point the local authority becomes aware that the making of Direct Payments is:
  • Having an adverse impact on other services which the local authority provides or arranges for children and young people with an Education, Health and Care Plan which the authority maintains; or
  • No longer compatible with the authority's efficient use of its resources.
• It has taken reasonable steps to ascertain whether the young person consents to Direct Payments and the young person has not notified the local authority of their consent.

Where the local authority decides to stop making Direct Payments, the local authority must first give notice in writing to the recipient setting out the reasons for its decision.

The local authority must reconsider its decision where requested to do so by the recipient (but is not required to undertake more than one reconsideration of a decision). When conducting its reconsideration, the local authority must consider the representations made by the recipient (and where the recipient is a nominee, any representations made by the child's parent or young person) and must then provide written reasons of its decision following the reconsideration to the recipient (and to the child's parent or young person, where the recipient is a nominee).

Before a young person is 18, it is important that a young person is assessed through the transition process to meet the statutory duty of both the Care Act and the Children and Families Act and to decide if Adult Social Care is needed and to establish what care and support is still needed or required. This will include whether a direct payment is being offered.

It is important to note once a young person reaches 18, the care and support package is means tested and a financial assessment will be completed by the local authority to look at what contribution is necessary from the young person’s finances (which does include benefits).