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Direct Payments

Date updated: 11/01/2023


A Direct Payment is funding provided to you by your local authority to help meet your social care assessed needs which are agreed and outlined by you and your allocated social worker.

A direct payment can be recognised as a suitable method to help you reach your assessed outcomes following the completion of a social care assessment or review by your social worker.

Direct payments enable more flexibility, choice and control in how your care and support is delivered by allowing you to receive payments instead of care services.

If you have been assessed as having eligible care and support needs then it is likely you are eligible for a direct payment; providing your needs can be met via a direct payment and you (or someone acting on your behalf) are willing and capable of managing the direct payment.

This can either be a nominated person or authorised person.

Nominated person refers to someone who you have chosen to manage your direct payment on your behalf and all the responsibilities that come with it. An authorised person is someone who has the legal authority to act on your behalf regarding finances e.g. someone who may hold power of attorney. They will be expected to manage your direct payment on your behalf and all responsibilities that come with it.

Direct Payments can be paid directly to you (or to your nominated representative) but must be in a separate bank account used only for the direct payment.

Alternatively, it can be paid to the City of London Corporation’s Direct Payment Service to manage on your behalf.

Direct Payments Easy to Read Guide PDF (2MB)
Date submitted: 14/10/20

Direct Payments can be used to pay for support that meets the outcomes agreed within your Individual Support Plan.

Depending on your individual assessed support needs this could include:

  • attending an educational course,
  • joining a local club or gym,
  • buying services from a private care agency,
  • or employing a Personal Assistant to provide support (although this cannot normally be family members who live with you).

If you choose to employ a member of staff to provide you with personal care, City of London can signpost you to a payroll provider whose costs will be factored into your budget.

Being an employer comes with certain responsibilities as you will have to ensure your employee(s) are submitting time sheets for the work they complete and receive their payslips and wages. It will also mean that HMRC payments will have to be made on behalf of your employee(s) if they are earning a taxable amount of income. You, as the employer, will also need Employer’s Liability Insurance (ELI) in place as the home will be considered a workplace for your employee(s).

Please note that there are services available which can relieve you, the employer, of financial responsibility such as paying wages, making HMRC payments and insurance payments by opting for a ‘’Managed Account’’ service. Further information on a ‘’Managed Account’’ service can be provided by the City of London’s commissioned payroll provider.

If you decide you would rather opt to use a Care Agency, the City of London can refer you to agencies which operate within the City of London whom you can choose from and support you in making arrangements.

The ‘’Managed Account’’ service can also be used in this scenario if you or your nominated/authorised person do not wish to hold the financial responsibility of paying the invoices of Care Agencies or other service providers.

The support, services and/or equipment you buy with the direct payment must be legal and safe. They cannot be used to pay household bills, for food, or for things that would normally be provided by someone else e.g. Health Services.

Your support plan, including your direct payment, will be reviewed annually (sometimes more often) to ensure it remains the best way to meet your needs.

If you are managing your own direct payment you will need to keep your receipts and bank statements from the separate direct payment bank account that you set up. You can be asked for these at any time for us to complete a full check of how the payment is being managed. If your direct payment is managed by the Direct Payment Service, then they will usually do this for you.

Your direct payment may end for several reasons including the following:

  • You are no longer eligible for or no longer wish to receive adult social care support
  • You no longer wish to have your support provided by a direct payment
  • You are moving into a residential care home
  • Your needs are no longer able to be met by the direct payment
  • You or your representative are unable to effectively manage the payment, in such cases you may be offered the option of it being managed by the Direct Payment Service.
  • The direct payment account has been mismanaged.

Following an assessment of her needs, Janice was eligible for 21 hours of care per week. As she struggled to understand English she wished to use her Direct Payment to employ someone who spoke her own language. The Direct Payment Officer supported her in this process linking with a third party provider to set things up and ensure Janice was able to employ this carer as well as ensure the responsibilities around being an employer were met.

To support her with this the Direct Payment Officer linked with a specialist payroll provider to help set things up so she could employ her own carer.

As Janice did not wish to take on the financial responsibility of being an employer herself, a managed account service was offered so she could be safe in the knowledge that her responsibilities around being an employer were being met.

A third Party payroll provider would make all the payments to the carer on her behalf and ensure relevant tax was paid. They would also ensure that Employment Liability Insurance was in place and paid.

A financial assessment was carried out with Janice with the outcome that she would need to contribute towards the cost of her care. This meant that because of her individual financial circumstances she would have to pay £20 per week towards her care costs which is deducted off of her Direct Payments. A standing order was set up so Janice automatically paid her contribution to the payroll provider on a monthly basis. The City of London paid the remaining amount required to cover the cost of her care to the payroll provider so the total cost of her care could be met.

If you are interested in Direct Payments, then ask your social worker or member of the Adult Social Care team who will do one or more of the following:

  • talk it through with you and explain a little more
  • send you further information such as the full Direct Payments policy
  • put you in touch with the Direct Payments Service
  • signpost you to where you will be able to get independent advice and information

Adult Social Care contact information

The City of London can offer you a range of support networks with organisations we are partner or affiliated with. You can check out City Connections which is in partnership with Age UK to help you in finding you support in areas specific to your needs.

Other services available: