UK Direct Payments for Social Care: A Complete Guide for 2026/27
Direct payments let people with assessed care needs arrange and pay for their own support instead of relying entirely on council-commissioned services. This guide explains eligibility, the personal budget and means test, and what you can and cannot spend the money on.
Direct payments are cash payments made by your local authority, following a care needs assessment, so that you (or someone acting on your behalf) can arrange your own care and support rather than the council commissioning services on your behalf. They sit within the wider system of "personal budgets" and self-directed support introduced under the Care Act 2014 in England (and equivalent legislation elsewhere in the UK), giving disabled people, older people and carers greater choice over who supports them and how.
Who Is Eligible
To receive direct payments, you generally need a completed care needs assessment confirming you have eligible needs under the national eligibility criteria, and the local authority must be satisfied that you — or a suitable person acting for you, such as a family member with authority or a court-appointed deputy — can manage the payments (with support if necessary) without unacceptable risk. Carers can also be eligible for direct payments following a carer's assessment, to help meet their own support needs.
Personal Budgets and the Means Test
Your direct payment amount is based on a personal budget calculation — an estimate of what it would cost the local authority to meet your assessed eligible needs. This can be adjusted following a financial assessment (means test) of your income and capital, which may require you to make a financial contribution. Certain disability-related benefits, such as the daily living component of Personal Independence Payment or Attendance Allowance, are often disregarded or treated specifically in this assessment, so it is worth asking exactly how your particular income sources will be treated before assuming a contribution is unaffordable.
What You Can Spend It On
Direct payments must be used to meet the eligible needs set out in your agreed care and support plan — for example personal care, respite care, specific equipment, or activities that support your wellbeing goals as identified in the assessment. They generally cannot be used for anything unconnected with meeting those assessed needs, such as general household bills that are not part of your care plan.
Employing a Personal Assistant
A common use of direct payments is to recruit and directly employ a personal assistant. This makes you an employer, with the associated responsibilities: registering as an employer with HMRC, operating PAYE, arranging employer's liability insurance, following employment law (including the National Living Wage, holiday entitlement and pension auto-enrolment where applicable), and carrying out appropriate safeguarding checks. Many people use a specialist payroll service or "managed account" provider to handle this administration on their behalf while still directly employing their own personal assistant.
Monitoring and Accountability
Local authorities monitor direct payments, typically through periodic reviews of your care and support plan and by requiring evidence (such as receipts or records) that the money has been spent appropriately. If funds are found to have been misused, the council can require repayment of the misused amount and, in serious or repeated cases, may stop making direct payments and revert to arranging services directly instead.
Direct payments are money paid by your local authority (following a care needs assessment and a financial assessment) directly to you, or to someone acting on your behalf, so you can arrange and pay for your own care and support, instead of the council commissioning and managing services for you. They give you more choice and control over who provides your care and how.
Who is eligible for direct payments?
You need to have had a care needs assessment by your local authority under the Care Act 2014 confirming you have eligible care needs, and the council must be satisfied you (or someone acting for you, such as a suitable person or a court-appointed deputy) can manage the payments, with support if needed, and that using them would not put you or others at risk.
How much money will I get?
The amount is set by a personal budget calculation, based on the cost of meeting your assessed eligible needs in the way the local authority would otherwise arrange, adjusted following a financial assessment (means test) of your income and savings if you are asked to contribute. There is no single fixed national amount — it depends entirely on your individual assessed needs and financial circumstances.
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Will I have to pay towards the cost of my care?
Possibly. Local authorities carry out a financial assessment considering your income and capital (savings and some property, depending on the type of care) against the relevant capital limits and rules, and may ask you to make a financial contribution towards your personal budget. Some benefits, such as the daily living component of Personal Independence Payment or Attendance Allowance, are typically disregarded or treated in a specific way in this assessment, so check exactly how your income sources are treated.
Can I use direct payments to employ my own carer or personal assistant?
Yes — this is one of the main reasons people choose direct payments. You can use the money to recruit, employ and pay a personal assistant directly, taking on responsibilities similar to any other employer, including PAYE, employer's liability insurance, and following employment law, or you can use a payroll or "managed account" service to handle the administrative side for you.
Can family members be paid through direct payments?
Generally, you cannot use direct payments to pay a close family member living in the same household for providing care, except in specific circumstances the local authority agrees are necessary — for example where no other suitable care worker is available. Family members not living with you may be employed in some cases, subject to the local authority's agreement and normal safeguards.
What can direct payments be spent on?
Direct payments must be spent on meeting your assessed eligible care needs as agreed in your care and support plan — this can include personal care, respite care, equipment, or activities that help meet your wellbeing needs, but cannot generally be used for anything unrelated to your assessed needs, such as general household bills unconnected to your care.
Do I have to account for how I spend direct payments?
Yes. Local authorities monitor direct payments, usually through periodic reviews and requiring records or receipts to show the money has been spent appropriately on meeting your assessed needs. If money is not spent as agreed, the council can ask for an explanation, require repayment of misused funds, or in serious cases stop the direct payment and revert to commissioning services directly.
What if managing direct payments becomes too difficult?
You are not locked in. If managing direct payments becomes too burdensome, you can ask the local authority to take back responsibility for arranging your care, use a payroll/managed account provider to reduce the administrative load, or move to a mixed package combining some direct payments with some council-arranged services.
Is there a difference between direct payments in England, Scotland, Wales and Northern Ireland?
Yes — while the broad principle of self-directed support is similar across the UK, the underlying legislation differs: the Care Act 2014 applies in England, the Social Services and Well-being (Wales) Act 2014 in Wales, and separate legislation applies in Scotland and Northern Ireland, each with its own detailed rules on assessments, charging and direct payments.
Disclaimer: Direct payment rules and financial assessment thresholds vary by local authority and UK nation; contact your local council for your own figures. This guide is general information, not personalised care or legal advice.
