What is the difference between a Personal Budget and a Direct Payment? 

A personal budget is a statement within a Care and Support Plan of the minimum amount of money that it would cost in the marketplace to meet that person’s needs. It is not the same as a Direct Payment. A Direct Payment is the physical giving of the money that is stated in the personal budget to the person receiving care, their family member, or whoever’s going to sort of control the funds.  

At all times the Direct Payment remains the property of the body that provided the funds, and the expenditure of the funds must be clearly accounted for on a regular basis back to the authorising body.  The principle of Direct Payments is that care and support can be personalised, and be flexible to meet the person’s needs as they evolve. 

Funds should be provided to cover things like insurance and payroll, and they can be used to employ carers directly, or via an agency, and can be used to pay for access to social clubs or facilities, as long as it is meeting the person’s agreed care needs.  

However, Direct Payments can be problematic if they are not sufficient to cover the real cost of meeting a person’s care needs. If this is the case, then the Care Needs Assessment, and resulting Care and Support Plan, may need to be challenged, and the Personal Budget underlying the Direct Payment reconsidered. There may also be an issue with the rates provided for in the Personal Budget, if they are not sufficient to meet the person’s needs in the marketplace. 

Further, organising care can be in itself quite an onerous task, and issues such as payroll, training, staff holidays, sickness and staff management all need to be taken into account.  

Direct Payments cannot be forced on a person, and if a person does not want to accept Direct Payments, then the body responsible for the Care and Support Plan will need to commission and provide care directly. 

However, provided there are no good reasons to decline authorising them, a person can require that their care is funded by way of Direct Payments.  

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This blog was written in conjunction with Rook Irwin Sweeney LLP. If you want to discuss any of the above issues, please get in touch with our specialist team.