The short answer
- It is the council's money, paid to you instead of to a providerThe amount is your relative's personal budget, worked out from the care and support plan. Nothing about the plan changes; only who spends the money and on whom.
- The care plan is the boundaryA direct payment has to meet the needs written into the plan. Inside that, the guidance tells councils not to place unreasonable restrictions on how a family does it.
- You can buy a self-employed carer, not only an agencyA direct payment can pay a self-employed carer your family has chosen, employ a personal assistant, or buy agency hours. The three differ mostly in how much administration falls on you.
- Expect records, and a review within six monthsInvoices, bank statements and a first review inside 6 months, then at least once every 12 months. A review can raise the budget as well as lower it.
Law and rules are England: Care Act 2014 sections 31 to 33, and the Care and Support (Direct Payments) Regulations 2014. Financial assessment figures are England, 2026/27, from Age UK factsheet 46, May 2026. Carer rates are what families pay on PrimeCarers, with our fee included, September 2026. We are not benefits advisers. For your relative's own position, Age UK, Citizens Advice, Carers UK and the council's welfare rights team all give free advice.
Asking for one
How to ask, and the four things the council checks
A direct payment is not a separate application or a different pot of money. It is a choice about how an agreed personal budget reaches your family, and the moment to make it is at the care planning stage, once the council has decided which needs it will meet.
Your relative can ask, or somebody can ask for them
Nothing in law stops them receiving it
The council is satisfied the money can be managed
The council thinks it is an appropriate way to meet the needs
If all four conditions are met, the council has to make the payment. Say plainly, in writing, that your relative would like their personal budget as a direct payment and why, and ask for the council's direct payment information pack at the same time. Councils either run a direct payment support team themselves or pay an independent organisation to do it, and that help is free to you.
Two earlier steps sit behind all of this. How to get local authority funding for care at home covers asking for a care needs assessment, the national eligibility test and the financial assessment. Publicly funded care explained sets arranged care and a direct payment side by side if you have not decided between them yet. Everything below assumes the council has already agreed to pay towards the care.
How much arrives
How much money comes, and what your relative still pays
The direct payment is the council's share of the personal budget. The personal budget itself is the whole weekly cost of meeting the agreed needs, split between what your relative pays after the financial assessment and what the council pays. Both halves are worked out before the direct payment is set up, and both can be argued with.
£23,250
The savings line in England
Above it, your relative pays the full cost. Capital below £14,250 is ignored, and between the two every £250 counts as one pound a week of income.
£241.45
A week the council must leave them
The Minimum Income Guarantee for a single person over State Pension age, 2026/27. A council may set a higher figure and can be asked to.
£55.25
A week more if Carer's Allowance is involved
Added to the Minimum Income Guarantee where your relative or their partner gets Carer's Allowance, or has an underlying entitlement to it.
Disability costs
Come off the income they are assessed on
Where a disability benefit is counted, the council must allow for disability-related spending: incontinence products, extra laundry, extra heating, a community alarm.
Financial assessment figures are England, 2026/27, from Age UK factsheet 46, May 2026.
The home your relative lives in is not counted at all when the care is at home; the rules are different for a care home. Savings are counted, and so is most income, which is why the contribution letter can be a shock even when the direct payment itself is generous. The means test in full goes through it line by line, and Attendance Allowance is worth claiming first if your relative does not already have it, because it is not means-tested and it is money on top.
The council works out the personal budget from the hours in the plan and what care costs locally. The statutory guidance tells councils to look at local market conditions and the cost of quality local provision, so the figure has to be one that can buy real care near your relative rather than a number from a spreadsheet. If it cannot, that is a point you can make, and the section on refusals below explains how.
What it buys
What a direct payment will and will not pay for
The rule is short. The money has to meet the needs written into the care and support plan, and within that your family has a great deal of freedom. Councils are told not to place unreasonable restrictions on how a direct payment is used. What follows is where the boundary sits, and where it moves only if the council agrees.
Spend it on this without asking
Anything that meets a need written into the care and support plan
- A self-employed carer your family has chosen, paid at the rate that carer charges
- A care agency, if you would rather somebody else handled the rota and the cover
- A personal assistant your relative employs, including wages, National Insurance, holiday pay and pension contributions
- Care at the times of day that suit your relative, rather than the times an agency rota has free
- Support that meets an agreed outcome rather than a task: getting to a club, to the shops or to see a friend
- Payroll or bookkeeping help, so the employment paperwork does not fall on one daughter
Allowed, but the council has to agree first
The regulations and the guidance put a gate in front of these
- Paying a partner, or a relative who lives in the same house, for care or for running the payment
- A short stay in a care home, which the regulations cap at four consecutive weeks in any twelve months
- A service the council itself provides, which the guidance says should generally not be bought this way
- An arrangement that costs more than the council's own way of meeting the same need, where you can show it works better
- Disability equipment and small adaptations, which the council must provide free where it agrees they meet an eligible need
Not what the money is for
Spending outside the care plan can be recovered at the review
- Anything unrelated to the needs the council agreed to meet
- Permanent residential care, which is funded a different way
- Ordinary living costs: rent, household bills, the weekly food shop
- A particular person the council has barred in a written condition, which it can do where there is a risk of abuse
The first column is wider than it looks. If the plan says your mother needs company and support to get out of the house, a direct payment can pay somebody to take her to a club rather than only to wash and dress her, because the need written into the plan is an outcome rather than a task. The last column is firmer than it looks. A direct payment is not income, so spending it on the gas bill, however tight the month, comes out at the review as money to be paid back.
Equipment sits oddly between the two. You can buy it with a direct payment, but you may not need to: where the council agrees a piece of disability equipment or a small adaptation meets an eligible need, it has to provide it free, and adaptations costing £1,000 or less cannot be charged for at all. Ask the occupational therapist before spending care money on a rail or a bath seat.
Choosing the carer
Three ways to turn the money into care
This is the decision the whole direct payment rests on, and it is mostly a decision about administration. A self-employed carer, a personal assistant your relative employs, and an agency all meet the same need. What differs is who carries the employer's duties, who chooses the person who comes through the door, and how much of the budget goes on care rather than on overheads.
A self-employed carer, an employed personal assistant, or an agency
| A self-employed carer | A personal assistant you employ | A care agency | |
|---|---|---|---|
| Who carries the employer duties | Nobody. A self-employed carer handles their own tax, National Insurance and insurance, and invoices for the hours worked | Your relative. PAYE, National Insurance, holiday pay, sick pay, pension enrolment and a written statement of terms | The agency. It employs the care workers and sends one invoice |
| Who chooses the carer | Your family, from profiles with rates, experience and reviews on them, before anyone commits to anything | Your family, through an advert, a shortlist and interviews you run yourselves | The agency, from whoever is on its rota that week |
| What it costs an hour | £18 to £25 on PrimeCarers, about £20 typically, with our fee included | The wage you agree, plus employer National Insurance, holiday pay, pension and insurance on top of it | £28 to £35 an hour is the usual range for home care visits |
| Checks before they start | On PrimeCarers: identity, right to work, an enhanced DBS on the Update Service and an online interview, all before a profile appears. Qualifications, training and references are for your family to check with the carer | Your relative arranges the DBS check and the right to work check, and the council will usually want to see that it was done | The agency runs its own checks and is registered with the Care Quality Commission |
| Cover when they are ill or away | You arrange a second carer, or agree cover between carers in advance. The council still has a duty to see that the needs are met | Your relative arranges and pays for cover, and owes statutory sick pay where it applies | The agency sends somebody else, who may be a stranger to your relative |
| Paperwork the council will want | Invoices and bank statements | Payslips, the payroll records, the employment contract and the insurance certificate | Agency invoices |
Who carries the employer duties
- A self-employed carer
- Nobody. A self-employed carer handles their own tax, National Insurance and insurance, and invoices for the hours worked
- A personal assistant you employ
- Your relative. PAYE, National Insurance, holiday pay, sick pay, pension enrolment and a written statement of terms
- A care agency
- The agency. It employs the care workers and sends one invoice
Who chooses the carer
- A self-employed carer
- Your family, from profiles with rates, experience and reviews on them, before anyone commits to anything
- A personal assistant you employ
- Your family, through an advert, a shortlist and interviews you run yourselves
- A care agency
- The agency, from whoever is on its rota that week
What it costs an hour
- A self-employed carer
- £18 to £25 on PrimeCarers, about £20 typically, with our fee included
- A personal assistant you employ
- The wage you agree, plus employer National Insurance, holiday pay, pension and insurance on top of it
- A care agency
- £28 to £35 an hour is the usual range for home care visits
Checks before they start
- A self-employed carer
- On PrimeCarers: identity, right to work, an enhanced DBS on the Update Service and an online interview, all before a profile appears. Qualifications, training and references are for your family to check with the carer
- A personal assistant you employ
- Your relative arranges the DBS check and the right to work check, and the council will usually want to see that it was done
- A care agency
- The agency runs its own checks and is registered with the Care Quality Commission
Cover when they are ill or away
- A self-employed carer
- You arrange a second carer, or agree cover between carers in advance. The council still has a duty to see that the needs are met
- A personal assistant you employ
- Your relative arranges and pays for cover, and owes statutory sick pay where it applies
- A care agency
- The agency sends somebody else, who may be a stranger to your relative
Paperwork the council will want
- A self-employed carer
- Invoices and bank statements
- A personal assistant you employ
- Payslips, the payroll records, the employment contract and the insurance certificate
- A care agency
- Agency invoices
Carer rates are what families pay on PrimeCarers, with our fee included, September 2026. All three are allowed. Age UK's factsheet on direct payments says plainly that a direct payment can be used to contract with an agency or with a self-employed person, and that directly employed care workers do not have to be registered with the Care Quality Commission.
The employment question is the one to settle before anyone starts. If your relative sets the hours, directs how the work is done and the carer could not send somebody else in their place, HMRC is likely to treat that as employment whatever the paperwork calls it, with PAYE, holiday pay, sick pay and the minimum wage behind it. Employing somebody also brings automatic pension enrolment once a worker aged 22 or over earns more than £10,000 a year, and employer's liability insurance of at least £5 million, which carries a daily fine if it is missing. HMRC's Check Employment Status for Tax tool on gov.uk answers the question in about ten minutes. Self-employed carer or employee? and employing a private carer: the legal and financial side go through both routes in detail.
If that sounds like more than your family can take on alongside everything else, the self-employed route is the lighter one. The carer handles their own tax and insurance, invoices for the hours worked, and that invoice is your spending record. You can search for carers near your relative and compare their rates, experience and reviews before you commit to anybody, which is worth doing even if you end up choosing an agency, because it tells you what an hour of care costs where your relative lives.
The contract for the care itself is between your relative and the carer, and a direct payment does not change its terms. Worth knowing before the first week: a visit cancelled by the client is payable in full, other than for unplanned hospitalisation, illness, or another reason the carer agrees to; notice is 48 hours for hourly care, and seven days for live-in care once 168 hours have been worked; bank holidays are charged at one and a half times the carer's rate and Christmas Day at twice; and travel time and travel costs are payable only where they were agreed in advance in writing. Build those into the budget you ask for rather than discovering them in month two. How you pay a self-employed carer explains the mechanics.
Paying a relative
When a direct payment can pay somebody in the family
This question usually comes up early, and the answer turns almost entirely on where the person being paid lives. The Care and Support (Direct Payments) Regulations 2014 name the relationships involved and set the rule; the council holds the exception.
A relative who lives somewhere else
Allowed
A partner, or a relative in the same house
Not unless the council agrees
The case councils do agree to
Put it in writing
Being paid to run the payment itself
A separate permission
Nothing here stops your relative paying a family member from their own money alongside a direct payment. If the council's share covers the mornings and your mother wants to pay you for the evenings out of her pension, that is a private arrangement and the direct payment rules have nothing to say about it. It does have tax and benefit consequences, and can my mum pay me to care for her? goes through Carer's Allowance, income tax, employment status and what an attorney is and is not allowed to do.
The paperwork
The account, the records and the reviews
There is more of it than a social worker's summary tends to suggest, and it comes in a predictable order. Setting the filing up in the first fortnight is far easier than assembling it the week before a review.
- Before the first payment
The direct payment agreement
The council sends an agreement setting out what the money is for, what records it wants and how often, and what happens if the arrangement stops. Read the conditions in it. The council can require information to check the plan is being met, but it cannot ask for more than it needs, and it cannot tell your family which carer to use.
- Week one
A separate account, or the card the council issues
Councils differ here. Some ask for a bank account used only for the direct payment; others issue a prepaid card they can see into. Either way, keep the money apart from your relative's own money. It makes the records simple and it protects whoever manages the account if anyone ever asks about it.
- Every visit
The invoice or the payslip
A self-employed carer invoices for the hours worked, and that invoice is the spending record. An employed personal assistant gets a payslip and the payroll returns go to HMRC. Keep the paper as you go rather than assembling it the night before a review.
- Every few months
The spending return
Most councils ask for bank statements, invoices and receipts on a set cycle so they can see the money went on the agreed needs. Send what is asked for and flag anything unusual at the time, a fortnight of hospital care or a carer leaving, rather than letting it turn up as a gap later.
- Within six months
The first review
The regulations require a review within the first six months. The guidance says it should be light touch, checking that your family is comfortable with the arrangement rather than hunting for mistakes. Your relative, their carer and anyone managing the payment should all be part of it.
- At least once a year after that
The annual review
After the first one, reviews come at least every twelve months, and sooner if the council has a reason to look. This is the moment to ask for more hours if the needs have grown, because a review can raise a personal budget as well as lower one.
Two conditions in that agreement are worth reading carefully. The council can require information from you, but only as much as it needs to see that the arrangement still meets the plan, so a demand for a daily diary of every hour is something you can question. And the council cannot require your family to use a particular provider. It can, in the other direction, name somebody who must not be employed, which is a safeguarding power rather than a preference.
A care plan written with the carer, rather than handed to them, makes the records easier as well as the care better. Writing a care plan together is a practical guide to what goes in one and who should see it.
If the answer is no
If the council refuses, the budget is too small, or it wants the money back
A refusal, a budget that will not buy the hours in the plan, or a decision to end a direct payment are all things a family can challenge, and all of them go through the same route. Nothing here needs a solicitor, and each stage is free.
- 1
Ask for the decision and the sums in writing
FirstAsk which of the four conditions the council says is not met, or how it worked out the personal budget and why it believes that amount meets each need in the plan. The council has to be able to explain both. A figure from a resource allocation system is a starting point, not an answer. - 2
Check the needs assessment before you argue about the money
The usual causeA personal budget can only cover the needs the council has written down. If the assessment missed the nights, the incontinence or how long a wash takes, the budget will be short whatever you say about the rate. Ask for a copy, read it against your own week, and ask for a reassessment where it is wrong. - 3
Say what it costs locally
EvidenceThe guidance tells councils to set a budget against local market conditions and the cost of quality local provision. Real quotes carry weight here: what carers near your relative charge an hour, what an agency quoted, what cover on a bank holiday costs. - 4
Use the council's complaints procedure
In writingEvery council has a formal adult social care complaints procedure and it is free. Set out what you asked for, what was decided and why you say it is wrong, and ask for a reply by a date. Age UK, Citizens Advice and Carers UK will help you write it, and none of them charge. - 5
Then the Local Government and Social Care Ombudsman
Free, once the council has repliedThe Ombudsman looks at adult social care complaints once the council's own procedure has run, or if the council has not replied in a reasonable time. It is free. Go to it within twelve months of first knowing about the problem, because it will usually not look at anything older. - 6
Keep the care going while you argue
ImportantThe council's duty to meet eligible needs does not pause during a dispute, and it should not end a direct payment without a plan for what replaces it. If care would stop, say so in writing and use the word urgent.
The guidance is clear that ending a direct payment should be a last resort, and that a council should offer help or a revised plan before it does. If it does end one, your relative's needs have not gone anywhere: the council still has to meet them, and there should be no gap in the care while one arrangement is swapped for another. If somebody is employed as a personal assistant, take advice before ending their contract, because redundancy and notice are your relative's liability rather than the council's.
The words the letters use
- Care and support plan
- The written plan that says which needs the council has agreed to meet and how. A direct payment can only be spent on what is in it.
- Personal budget
- The weekly cost of meeting those needs, split into the part your relative pays after the financial assessment and the part the council pays.
- Direct payment
- The council's share of the personal budget paid to your relative, or to somebody named for them, so the family buys the care itself.
- Nominated person
- Somebody your relative chooses to receive and manage the payment while your relative still makes the decisions.
- Authorised person
- Somebody the council agrees can hold the payment where your relative lacks the mental capacity to ask for it themselves. A power of attorney is not required, though many authorised people hold one.
- Personal assistant
- A carer employed directly by the person receiving care, rather than working through an agency or as a self-employed carer.
- Personal health budget
- The NHS version, offered where the NHS is paying. It can be held as a direct payment in much the same way.
Questions
Questions families ask about direct payments
It is the council's share of your relative's personal budget, paid to them, or to somebody they nominate, instead of the council arranging the care itself. Your family then chooses and pays the carer. The money has to be spent on meeting the needs written into the care and support plan, and the council asks for records showing that it was.
There is no separate application. Ask the council for a care needs assessment first, and once it has agreed a care and support plan and a personal budget, ask in writing for that budget to be paid as a direct payment. The request is best made at the care planning stage. The council must agree if four conditions in the Care Act 2014 are met, and it should offer you free help to set the payment up. How to get council funding for care at home.
Yes. A direct payment can be used to contract with a self-employed carer your family has chosen, to employ a personal assistant, or to buy hours from an agency. A self-employed carer handles their own tax, National Insurance and insurance, and their invoice is your spending record, which is why it carries the least administration. Carers on PrimeCarers charge £18 to £25 an hour with our fee included.
Anything that does not meet a need in the care and support plan. That rules out ordinary living costs such as rent, bills and the weekly food shop, and it rules out permanent residential care, which is funded a different way. A short stay in a care home is allowed but capped at 4 consecutive weeks in any twelve months. The council can also name a specific person who must not be employed.
A relative who lives at a different address can be paid, as a personal assistant, with the hours and rate written into the plan. A partner or a close relative living in the same house normally cannot be paid for care, unless the council decides it is necessary. The same regulations allow a relative in the same household to be paid for running the direct payment itself, again where the council agrees. The tax and benefit side of being paid to care.
Only if you employ somebody. If your relative uses the money to buy care from a self-employed carer or an agency, nobody becomes an employer. If they take somebody on as a personal assistant, they do, which brings PAYE, holiday pay, sick pay, the minimum wage, pension enrolment for a worker aged 22 or over earning more than £10,000 a year, and employer's liability insurance of at least £5 million. HMRC's Check Employment Status for Tax tool settles which situation you are in.
The regulations require a review within the first 6 months and then at least once every 12 months, and sooner if the council has reason to look. The first one should be light touch, checking the arrangement is working rather than hunting for errors. A review can increase a personal budget as well as reduce it, so it is the moment to say if the hours no longer cover what your relative needs.
Ask which condition it says is not met, or how the personal budget was calculated and why the council believes that amount meets each need. Check the needs assessment first, because a short budget usually traces back to a need that was not written down. Then use the council's complaints procedure, which is free. If that does not resolve it, the Local Government and Social Care Ombudsman will look at the complaint, also free, as long as you go to it within 12 months of first knowing about the problem.
Yes, and it is called a personal health budget. Anyone receiving NHS Continuing Healthcare has a right to ask for one, and it can be held as a direct payment, as a notional budget the NHS manages, or by a third party. Where the NHS and the council both pay, the two should be coordinated so a family is not running two sets of accounts. NHS Continuing Healthcare explained.