Read this first — it's the same money, more control
A direct payment is not extra cash and it's not a loan. It's exactly the same amount the council would have spent arranging your care — paid to you instead, so you decide how it's used to meet your care plan. That can mean choosing your own carer, employing a personal assistant who knows you, or picking a service that fits your life.
It's always your choice. If managing it feels like too much, you can let the council arrange everything, hand the budget to someone you trust, or use a free support service — and you can switch back at any time. Nobody is forced to take a direct payment.
Direct payments and personal budgets sit on top of the free care needs assessment and the financial assessment (means test). If you haven't had an assessment yet, start there — it's free and it's your right. See Sorted's care needs assessment & paying for care guide →
Where it starts: your personal budget
In England, social care runs through your local council under the Care Act 2014. The journey is:
- Care needs assessment — free, and your right whatever your finances. The council looks at the difficulties you have and the outcomes you want.
- Eligibility decision — if your needs are "eligible", the council must arrange or fund support to meet them.
- Financial assessment (means test) — works out how much you contribute. In England, capital over £23,250 means you pay the full cost; below £14,250 you contribute only from income. See the full means-test breakdown →
- Personal budget — the council sets this: the amount it costs to meet your eligible needs. Your care and support plan says what it's for. How you receive that budget is where direct payments come in.
Personal budget vs direct payment
The personal budget is the amount. A direct payment is one way of receiving that amount — the money paid to you (or your nominee) so you can arrange the care yourself. They're not the same word for the same thing.
The three ways to take your budget
Under the Care Act 2014 you choose how to receive your personal budget. There are three main options — and you can have a mix of them ("mix and match").
| Option | What it means |
|---|
| 1 · Council-arranged services | The council arranges and pays for your care and support for you — for example commissioning a care agency or a day centre. Least admin, least direct control. |
| 2 · A direct payment | The council pays the money to you (or a nominee) so you arrange your own care — employ a personal assistant, choose your own agency, or arrange flexible support that meets your plan. Most choice and control. |
| 3 · A nominated person or support service | The budget is held and managed on your behalf by someone you trust, or by a direct payment support service or other organisation — so you get the control without all the paperwork. |
Many people choose a mix: for example, the council arranges a day centre place while you take a direct payment to employ a personal assistant at home. You decide which parts to control and which to leave to the council.
Who can have direct payments
The person who needs care can have direct payments if they have the mental capacity to consent to and manage them (with support if needed). If they lack capacity, a "suitable" or "authorised" person — often a family member or someone with the right authority — can receive and manage the payments on their behalf.
Carers too: if you've had a carer's assessment, you can get a direct payment for your own assessed support — for example to pay for a break or some help around the home.
What direct payments can and can't pay for
The golden rule: a direct payment must be used to meet the agreed outcomes in your care and support plan. Beyond that there's real flexibility — but also clear limits, and the council monitors how it's spent (often through a managed account or prepaid card that keeps the records for you).
You can usually use it to
Employ your own personal assistant; pay a care agency you choose; pay a friend or relative who does not live with you to provide care; buy equipment or services that meet your care-plan outcomes; arrange flexible support (e.g. help getting out, staying safe, or with daily tasks) in the way that works for your life.
You normally can't use it to
Pay for permanent local-authority residential care (a long-term care-home placement); pay a close family member living in the same household to provide your care — except in limited circumstances the council specifically agrees (such as a genuine live-in arrangement); cover everyday personal or household costs like rent, mortgage, utility bills, food or personal debts; or spend it on anything outside your care and support plan.
If you're not sure whether something is allowed, ask your council's direct payments team before you spend — they'd far rather answer first than claw money back later.
Employing a personal assistant — what's involved
One of the biggest reasons people take a direct payment is to employ their own personal assistant (PA) — someone they choose, who learns their routine. If you do, you become an employer, which brings legal responsibilities. They sound heavier than they are, because the council usually funds the costs within the budget and provides free support.
| Your responsibility as an employer | What it means in practice |
|---|
| Contract of employment | A written contract setting out hours, pay, holidays and terms. |
| Pay & holiday | At least the National Minimum/Living Wage, plus paid holiday entitlement. |
| PAYE | Operate PAYE to deduct Income Tax and National Insurance and pay HMRC. |
| Workplace pension | Automatically enrol your PA into a pension scheme if they meet the age and earnings criteria. |
| Employer's liability insurance | Required by law as soon as you employ someone — usually at least £5 million cover. |
| DBS check | A criminal-records (DBS) check is normally needed for someone providing personal care. |
You don't have to do this alone
Most councils fund a free direct payment support service and a payroll service that calculates wages, tax and pension contributions for you, helps with contracts, sorts the insurance and gives general advice. If even that feels like too much, you can choose Option 3 — a managed account where someone else handles the paperwork while you keep the control over who provides your care.
Using a care agency instead of employing a PA directly avoids the employer duties altogether — the agency is the employer; you just pay them from the direct payment.
The honest fine print
- It's not extra money. A direct payment is the same personal budget the council would have spent — just paid to you. It doesn't increase what you're entitled to.
- The means test still applies. If your financial assessment says you must contribute, you still pay your assessed contribution (the council tops up the rest). The capital limits in England are £23,250 / £14,250 — see how the means test works →.
- You'll keep simple records. The council monitors spending — usually through a managed account or prepaid card — to check the money is meeting your care-plan outcomes. Keep receipts or let the support service do it.
- You can change your mind. You can ask the council to take back over and arrange the care for you at any time, or switch between the options.
SortedUK gives general information, not financial or legal advice. For your exact figures and options, ask your council or take free advice from the organisations below.
Scotland, Wales & Northern Ireland
Everything above is the England system. The other UK nations run their own — and Scotland's framework is built entirely around choice.
The rules are different across the UK
Scotland — Self-directed Support. Under the Social Care (Self-directed Support) (Scotland) Act 2013, your council must offer four options: (1) a direct payment you manage yourself (including employing staff); (2) you choose the support and the council arranges it on your behalf; (3) the council chooses and arranges support after discussion with you; or (4) a mix of these across different parts of your support. Start at mygov.scot or gov.scot.
Wales. Direct payments are available under the Social Services and Well-being (Wales) Act 2014, after a needs assessment, so you can arrange your own care and support including employing a personal assistant. See gov.wales.
Northern Ireland. Direct payments are arranged through your local Health and Social Care (HSC) Trust rather than a council, after an assessment of need. Start at nidirect.gov.uk and confirm with your Trust.
Do this right now
If you want more choice over your care, here's the calm, free order:
Assess, choose, set up — in order
- Get a needs assessment first. Phone the council's adult social services and ask for a free care needs assessment. From it comes your personal budget.
- Ask for a direct payment. Tell the council you'd like to take some or all of your budget as a direct payment, and ask what their direct payment support service offers.
- Decide how to take it. Manage it yourself, hand it to a nominated person or service, or use a managed account. You can switch later.
- If you'll employ a PA, ask the council to fund a payroll service and help with insurance, contract and DBS — so you don't handle the admin alone.
- Get free advice. Call the Age UK Advice Line on 0800 678 1602 (8am–7pm, 365 days) or, if you're a carer, Carers UK on 0808 808 7777 (Mon–Fri 9am–6pm).
Arranging care for an older parent? Check what they may also be owed — Attendance Allowance, Pension Credit and more.
For free, independent help: the Age UK Advice Line (0800 678 1602), Carers UK (0808 808 7777) and Citizens Advice all give free guidance on personal budgets and direct payments.