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Direct payments

This page explains the rules surrounding direct payments by the local authority to help with meeting a child’s needs.

Direct payments are monetary payments made by a relevant body as an alternative to services provided. Direct payments can be used to meet a child’s educational, social, or health needs. Each of these is treated differently and is subject to various regulations.

What are direct payments for education?

Direct payments for education are monetary payments made to either the parents or the young person of a child with an Education, Health, and Care Plan (EHCP). Direct payments are an alternative to receiving goods and services that are part of the special educational provision outlined in an EHCP.

Who can receive direct payments for education?

Where a child or young person has an EHCP, direct payments can be made to:

  • a person who is a parent of the child;
  • the young person if they are over 16; or
  • a nominee who has been nominated in writing, by the child’s parent or young person, to receive the direct payments on their behalf.

In each case, direct payments may only be made to a person if it appears to the local authority that they are capable of managing direct payments without assistance, or with such assistance as may be available to them. The person must also be over compulsory school age and have capacity to consent to the making of direct payments to them.

Specific criminal convictions relating to drugs or alcohol will prohibit a person from receiving such payments. If you believe this may affect you, the Schedule attached to the Special Educational Needs (Personal Budgets & Direct Payments) Regulations 2014 lists all the persons to whom direct payments may not be made.

What must a Personal Budget policy contain?

The law and the guidance on personal budgets allows local authorities to determine how they will approach personal budgets and make their own policies on it. The policy must contain:

  1. A description of the education, health and social care provision which could be included within the Personal Budget;
  2. The options of controlling the Personal Budget:
    1. direct payments – where the young person/parents buy and arrange the services themselves;
    2. an arrangement – where the Local Authority, school or college hold the funds and arranges the services (also known as notional budgets);
    3. third party arrangements – where the funding is paid to a person or organisation who acts on behalf of the parents or young person;
    4. a combination of the above;
  3. A clear explanation of how someone would be eligible for personal budgets and the various options for control the budget.

The Local Government Ombudsman (LGO) can consider a complaint about a Personal Budget; guidance on what the LGO can investigate is published on the LGO website.

How do I apply for direct payments for education?

The local authority must make available information on the provision of direct payments. This information must state the conditions which must be met before a direct payment may be made, and details about organisations that may be able to provide advice and assistance to the parent or young person in relation to direct payments.

A parent or young person may request a Personal Budget from the Local Authority, including direct payments at any time during which the draft EHCP is being prepared, reviewed or re-assessed.

Before deciding to make direct payments, the local authority must be satisfied that the proposals for use of the direct payments by the person receiving them are appropriate. Where a parent or nominee is to receive direct payments, the local authority must be satisfied that the recipient will act in the best interests of the child.

A local authority can refuse to issue direct payments:

  • if it will have an adverse impact on other local authority services provided or arranged for children and young people with an EHCP; or
  • if securing the agreed provision by means of direct payments is incompatible with the efficient use of the local authority’s resources.

Where a local authority decides not to make direct payments, it must inform the you of its decision in writing, giving reasons and informing you of your right to request a review of the decision. Where requested, the local authority must review its decision and when carrying out the review, must consider any representation made by you. The local authority must provide, in writing, the outcome of the review, with reasons.

Can I appeal a refusal for Direct Payments?

You can challenge a decision not to make direct payments by Judicial Review and should seek independent advice from a solicitor on this. you should contact Civil Legal Advice for a Legal Aid assessment to determine whether you may qualify for help with the fees for representation.

The First Tier Tribunal (SEND) does not have jurisdiction to hear appeals about Direct Payments.

What happens when my child reaches the age of 16?

When a child receiving direct payments reaches the age of 16, the local authority must take reasonable steps to determine whether the child wants to receive and manage direct payments themselves. The child has the option of having direct payments made to themselves or continuing to be made to you or your nominee. The child may also notify the local authority that they do not consent to direct payments being made. In this case, the local authority has to stop the direct payments as soon as reasonably possible.

What are direct payments for social care?

Direct payments for social care are monetary payments made by the local authority to anyone who has parental responsibility for a child or a young person with disabilities. Direct payments must be offered as an alternative to receiving services from the local authority. The payments can then be used in a number of ways to provide care and support services for the disabled child or young person. The system may provide added flexibility for you to choose and arrange the services or support you feel is most appropriate, at home or when out and about. 

Who can receive direct payments for Social Care? 

Those with parental responsibility for a disabled child under 16 years old

You can receive direct payments for a disabled child  if you have parental responsibility and the child has been assessed by the local authority as eligible for a service. A needs assessment will have been carried out by the local authority prior to your application for direct payments. The assessment must take into account the needs of the family as a whole unit, rather than just the needs of the child. 

If a disabled child is not receiving the appropriate services from the local authority or their needs have changed, a reassessment should be requested. 

Disabled young people aged 16 or 17 years old

If the local authority determines that a disabled young person aged 16 or 17 is eligible, they can receive direct payments (money or vouchers). Direct payments are made directly to disabled young people aged 16 and 17, rather than to their parents or carers. After that, the young person can choose which services to use. This is only applicable if the young person is deemed "competent" to manage their own care.

How do I apply for direct payments for social care?

If you are currently receiving services from your local council, you may be able to request direct payments as an alternative. More information on how to do this, as well as how to apply for an assessment of the child’s or young person’s needs, can be obtained from the local authority.

When are direct payments the right option?

There are a number of reasons why direct payments may be a better option than receiving direct services from the local authority, including:

  • distance from services – e.g. where a disabled child or young person lives in a remote location and it is more practical to arrange for services closer to home;
  • greater flexibility – You or the child can decide which services are necessary;
  • avoidance of waiting lists – Sometimes there may be a waiting list for direct services from the Local Authority, where the same service is available immediately from another source.

What can direct payments be used for?

Direct payments may be used for various services that provide additional support. For parents or carers of a disabled child under 16 years old, these services include:

  • short residential breaks;
  • employing someone to assist with the care;
  • a sitter service;
  • a placement at a day nursery or an after-school club;
  • respite care;
  • additional equipment.

For disabled young people between the ages of 16 and 17, the direct payment may be used to purchase equipment necessary to meet their needs, as set out in the local authority assessment. It is also possible for the payment to be used to employ someone who can assist with their care.

What can’t direct payments be used for?

Unless specifically employed as a live-in care assistant, direct payments cannot be used to employ someone who is already a resident in the same household, such as another parent or sibling. Direct payments can only be used to pay for services that meet the needs of the disabled child or young person as determined by the local authority.

What happens after an assessment for direct payments?

Once the local authority has carried out an assessment, they must decide whether there is a need for support. If they agree that services are needed, they should set out a care plan which outlines the support required.

At this point you should have an option to:

  • ask the local authority to provide care that will meet all of the needs identified in the Care Plan; or 
  • ask for direct payments, so that you can buy services to meet the assessed needs; or
  • opt for a mixed package, where social services provide some of the care and you use direct payments to buy the rest.

If the local authority does not accept that your child needs support they will not offer you direct payments. If you disagree with their assessments you can challenge this via their complaints procedure.

What should I do when I start receiving payments?

  • Keep a record of how your direct payments have been spent.
  • Before you receive direct payments, the local authority are likely to ask you to sign an agreement stating you will only use the money to meet your child’s assessed needs. Thereafter, you are likely to be asked to provide them with information about how you have spent your direct payments. It is advisable to keep receipts of anything you use the direct payments for. The local authority will inform you of any other information you will be required to provide.
  • Keep the local authority informed; if the local authority is unhappy about how you have spent your direct payments (for instance, if it wasn’t used to meet the needs they agreed to) they can ask for the money to be repaid. We suggest you always inform your social worker if you intend to make any changes to the services you buy.

What are direct payments for health services?

Direct payments for health services are monetary payments made by a health body to a person as an alternative to services provided by the National Health Service and it is appropriate to that person’s condition. The details of such direct payments are beyond the scope of family, child and education law and as such are not covered by this information page. The relevant provisions can be found in the National Health Service (Direct Payments) Regulations 2013.

This information is correct at the time of writing, 27th October 2023. The law in this area is subject to change.

Coram Children’s Legal Centre cannot be held responsible if changes to the law outdate this publication. Individuals may print or photocopy information in CCLC publications for their personal use.

Professionals, organisations and institutions must obtain permission from the CCLC to print or photocopy our publications in full or in part.

On this page

This information is correct at the time of writing, 27th October 2023. The law in this area is subject to change.

Coram Children’s Legal Centre cannot be held responsible if changes to the law outdate this publication. Individuals may print or photocopy information in CCLC publications for their personal use.

Professionals, organisations and institutions must obtain permission from the CCLC to print or photocopy our publications in full or in part.

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