Direct Payments: a guide (document)

Direct payments are cash payments made in lieu of social service provisions, to individuals who have been assessed as needing services. The aim of a direct payment is to give more flexibility in how services are provided to many individuals who are assessed eligible for social services support. By giving individuals money in lieu of social care services people have greater choice and control over their lives, and are able to make their own decisions about how their care is delivered. They can be made to disabled people aged 16 or over, to people with parental responsibility for disabled children, and to carers aged 16 or over in respect of carer services.

Some general questions and answers about direct payments

Q. What are direct payments?
A. Direct payments are cash payments made in lieu of social service provisions, to individuals who have been assessed as needing services. The aim of a direct payment is to give more flexibility in how services are provided to many individuals who are assessed eligible for social services support.

Q. Who can receive direct payments?
A. They can be made to any older or disabled person age 16 or over, to people with parental responsibility for disabled children, and to carers aged 16 or over in respect of carer services. Direct payments can be made available to everyone eligible. Councils should not have blanket policies excluding, for example, people who need 24 hour care, or from particular client groups such as older people etc.

Q. Once an individual has been assessed as needing support, how long does he/she then have to decide whether to receive a direct payment?
A. There is no mandatory time limit set for individuals to decide. People can change their minds at any time to opt in or out of receiving direct payments. It is vital that individuals are fully informed of all of the responsibilities and duties (paperwork, employment rules etc) that are associated with receiving a direct payment. This should not be done however in order to try and put people off receiving a direct payment. All councils should ensure adequate support is available to individuals so they are able to address any concerns they may have.

Q. Can direct payments be made for residential care?

A. Direct payments cannot be used to buy long term residential care. However, they can be used by recipients to purchase for themselves short stays in care homes, but this cannot exceed more than four weeks in any twelve-month period.

Q. Can direct payments be made to 16 and 17 year olds?
A. Yes, 16 and 17 year olds can receive direct payments, it is important that due regard is given to safeguarding and promoting their welfare. Where this is not the case, parents may continue to receive a direct payment on the young person's behalf until they are 18. To ease the transition, the young person may take on part of a direct payment, with a parent managing the rest.

Q. Can a person under Section 117 of the Mental Health Act receive a direct payment?
A. Yes, direct payments can be made to people who are assessed as requiring services under Section 117 of the Mental Health Act.

Q. Can direct payments be used to buy services from your local council or another local council?
A. No, a recipient of direct payment can not buy services from their own council or another council. Direct payments offer an alternative choice of provider to recipients. Individuals retain the choice to have all or some of their care directly provided by their councils.

Q. How does a council decide if someone is able to manage a direct payment?
A. Department of Health guidance is clear that the ability to 'direct' is more important that the ability to 'manage'. Individuals should be given the help they need to manage their direct payments - both in securing the services and support they want the direct payment to provide and in dealing with the finances. There is no restriction on the amount or type of help a person may receive.

Q: Can direct payments be used to pay for health care?
A: No. Direct payments are a replacement for social care services that would otherwise been provided or arranged by social services following a community care assessment.

Some questions and answers about becoming an employer

Q. What do I need to know about employing my own staff?
A. If you employ your own staff, you will have legal responsibilities. It is up to you to ensure that you are aware of, and comply with, these responsibilities. If you are employing an individual to care for a child using direct payments, you should ask your local council to carry out appropriate checks via the Criminal Records Bureau. Your council must carry out the check free of charge if you request them to do so.

Q. How do I find people to employ?
A. First, decide what kind of person you want and how many people you need, drawing on the local council's assessment of your needs. Prepare a list of the tasks you want your employees to do, then ask yourself what skills and personal qualities they will need to do those tasks properly. For example, if part of the job is to enable you to get out and about, you may need someone who can drive. If you think you will need more than one person, you might also consider whether they all need to have all these skills and qualities. You will also need to think about what hours you would expect them to work.

When you have decided on the skills and personal qualities you are looking for, you need to decide how to go about finding the right people. You might find someone by word of mouth, by asking around among your friends and neighbours, or you could put a notice in a public place, such as a local post office, shop or college of further education, or advertise in a newspaper or job centre. Advertising in job centres is free, but there is likely to be a charge for placing a notice in a shop window or in a newspaper. Local organisations may also have newsletters in which you can advertise.

If you are placing an advertisement, you will need to describe briefly what the job involves, how many hours per week, what kind of person you are looking for and the rate of pay, and give a contact number or address. You may prefer not to give your own address or telephone number at this stage, for security reasons. Your local council or local organisation of disabled people may allow you to use their address.

Q. How do I decide how much to pay people and how can I organise the paying of salaries?
A. You may be able to ask someone who is already employing people using direct payments how much they pay, or look at advertisements for similar jobs. You can also discuss rates of pay with your local council. You may need to offer different rates of pay for different bits of the job. For example, you may find that you need to offer higher rates for evenings or weekends than for weekdays. You will need to ensure that your rate of pay conforms to the requirements of the national minimum wage.

Many people find it helpful to use a specialised payroll service. Such services will take on responsibility for paying wages, tax and National Insurance based on information supplied by you.

Q. Do I need to prepare a job description?
A. A job description sets out clearly what the job requires. It will help you to think through what sort of person you are looking for and to explain to applicants what the job involves. It will also serve as a record of what you expect from your employees, which will help if any difficulties arise.

Q. What information should I ask applicants to provide?
A. To help you decide whom to invite for interview, you will need to ask for information so you can form a judgement about the applicant. You may decide to ask people to complete an application form, or to write you a letter saying why they want the job, accompanied by an outline of their employment history. If you are short of time, you may prefer to ask a standard set of questions on the telephone. The fuller a picture of the applicant you can obtain at this stage, the easier it will be to decide whom to interview. You might want to ask:

• For details of experience, training and employment history
• When the applicant is able to work and when he or she is able to start
• Why the applicant is interested in working for you

You should always ask:

• If the applicant has any criminal convictions
• For references, and to check those references before offering anyone a job.

Q. How do I go about interviewing?
A. Go through the applications you receive, comparing them with your list of the skills and personal qualities you are looking for. Decide which of the applicants to interview and arrange dates for the interviews. You might find it useful to ask someone else to help you make this choice and with the interviews. Think through before the interviews the questions you will need to ask to find out more about the candidates. It may be helpful to begin the interview with an explanation of what the job involves, to ensure that the applicant has understood the advertisement and to provide additional information.

When you come to choose between the candidates, you will need to consider whether they will be able to do the job, and whether you are likely to be able to get along with them.

Q. Will I need a contract with my employee(s)?
A. A contract of employment exists as soon as your employee starts work. By starting work your employee demonstrates that he or she has accepted the terms and conditions you have offered. The contract does not have to be in writing. Its terms can be written, orally agreed, implied, or a mixture of all three. Written details, whether in the form of a contract or statutory written statement, ensure that both you and your employee have the same understanding about the terms on which your employee is employed, and may be helpful if any disagreements arise.

The Department of Trade and Industry booklet PL810 Contracts of Employment gives further information. Regardless of whether they have been given a written contract, most employees are entitled to a written statement of the main particulars of their employment (see Department of Trade and Industry booklet PL700 Written Statement of Employment Particulars).

Q. Can I check if the person I want to employ has a criminal record?
A. If you are employing an individual to care for a child using direct payments, you should ask your local council to carry out checks under the Protection of Children Act via the Home Office agency, the Criminal Records Bureau. Your council must carry out the check free of charge if you request them to do so. If you are a disabled 16 or 17-year-old and are thinking about employing a care worker yourself, you can also request your council to carry out a criminal records check. Again, the council must carry out the check if you ask them to at no charge. Disabled adults who want a similar degree of reassurance about the suitability of their personal assistants will need to enter into a contract with an agency instead of being an employer themselves. Your local council or direct payment support service will be able to offer you more advice about vetting potential workers.

Contracting with someone who is self employed

If the person you employ says that they would like to be self-employed and you are not sure whether this is correct, contact your local tax office or Inland Revenue enquiry centre for help. Self-employment is not a matter of choice but depends on the contractual arrangements between you and the worker; that is, the terms on which you engaged him or her. A variety of different factors play a part in judging whether or not someone is self-employed, such as the degree of control you have over the way the work is done. The Inland Revenue leaflet IR56/N139, Employed or Self-Employed? A Guide for Tax and National Insurance, will help you.

If the person is not self-employed, you will be regarded as his or her employer, with all the associated obligations. Someone who is genuinely self-employed will make arrangements for paying their own tax and National Insurance contributions. You will have no responsibility for paying these. If you are in doubt about whether someone is employed or self-employed, ask for help and operate PAYE and pay National Insurance contributions in the meantime, as if the person was an employee of yours.

What do I need to know about contracting with an agency?

There are many agencies which provide care services. Purchasing services from an agency means that you do not employ directly the people who provide your care, and you do not have the responsibilities of an employer. Instead, you have a contract with the agency. Your local council may be able to give you names of agencies in your area which provide the kinds of services you need. You may also be able to find out about agencies from other people who receive direct payments, your GP or district nurse, libraries, local voluntary councils or Citizens? Advice Bureaux, or by looking in the Yellow Pages.

Before contacting an agency, it is important to be clear in your own mind what help you are looking for. Start by preparing a list of the tasks you are expecting agency staff to do, just as you would if you were recruiting your own staff. Then think about what is most important to you about the way those tasks are done. This will help you prepare questions to ask agencies you are considering to identify the one which best meets your needs. Always contact more than one agency before committing yourself. Remember that you are the customer. If one agency is not prepared to meet your requirements, you may be able to find another which will.

You might find it helpful to ask some of the following questions before making a decision:

• What services are available?
• What charges will be made?
• Is the price all inclusive, or are there any extras, for example VAT, National Insurance or travelling expenses?
• Is there a minimum service that has to be bought?
• Can I choose the person who provides my care?
• Can I expect to see the same person on a regular basis?
• What if the regular person is sick or on holiday?
• Can the organisation be contacted at all times when care is being provided?
• How can I contact the out-of-hours emergency service? Is there an extra charge?
• How can I complain about the service I receive?
• What obligations will I have if I cancel the service?
• Does the organisation have full professional and employer?s liability insurance? Does the organisation work to a recognised code of practice?
• How are agency staff recruited? Are they required to give references? What training are they given?
• What evidence can I see that employees have had police checks?

Employment agencies are required to meet certain minimum standards designed to protect their workers and those hiring them. Details can be obtained from the Department of Trade and Industry employment agency standards helpline on 08459 555 105.

Further information

Department of Health Direct Payments website
National Centre for Independent Living website 

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