5. Managing a personal budget
A personal budget is often managed by the person with the assessed needs themselves. However, it does not always have to be managed by them. Some people may prefer or need someone else to do it for them. The important thing is that the person chooses how the budget will be managed.
There are a number of ways that a personal budget can be paid and managed, but not all options will be available everywhere. A social worker should be able to offer information about options in the local area.
A personal budget can be:
- held and managed by the local authority, who have responsibility for commissioning the care services, but the individual still chooses how their care needs are met (a managed budget)
- paid as an Individual Service Fund (ISF), where a care provider (eg a care agency) holds and manages the budget and provides the support agreed in the support plan
- paid as a direct payment to the person themselves or their representative (see 'Direct payments' below)
- managed by a combination of these methods.
People can create their own support plan with help from families, friends or neighbours, if they wish. Social workers or care managers can also help people with support planning. Sometimes people prefer support from a broker: either someone who is provided by an organisation or someone who they pay to support them.
A support broker is someone who helps the person to think about, plan and organise support that is tailored to them. They can help with one or several areas of planning or organising support; they can help for a short time or a longer period: it all depends on what the person wants. If the person wishes, a support broker can act as their agent and hold the personal budget for them.
A support broker does not have to be a paid professional; it can be anyone who the person trusts. A support broker could be:
- a relative, friend or neighbour
- a worker from a voluntary organisation
- someone in social services, such as a social worker or care manager
- a staff member from an advice and information organisation
- an independent professional broker
- a support or care provider organisation.
If someone wants to use a professional broker, the fees usually come out of the personal budget allocation.
A direct payment is one way to manage a personal budget in England. Money is given directly to the person, which they use to pay for their care and support. In Wales and Northern Ireland direct payments are available, but they are not part of the personal budgets system used in England. The information in this section, about how direct payments work, is relevant to direct payments in England and Wales. In Northern Ireland they are slightly different.
Direct payments aim to give people greater flexibility and choice over how their needs are met. They can be used to buy a range of different services. For example, if someone is identified as being socially isolated they might use their direct payment to help them to meet other people at an activity of their choice.
A direct payment can only be spent as agreed in the support plan. Records of how the money has been spent need to be kept. It is possible for someone to receive a personal budget as a direct payment and have someone else to manage it for them and keep the appropriate records on their behalf.
If the person does not want to hold their direct payment themselves, it can be:
- managed for the person by a broker, an independent social worker or an advocate
- held by a carer, friend, family member, solicitor or other appropriate person (eg an attorney), as a 'user-controlled trust'
- managed by a mix of the above.
Some people use their direct payments to employ their own care worker or personal assistant, either through personal contacts or by advertising in a newspaper. Others use them for social or leisure activities or equipment, to improve their wellbeing.
Who can receive a direct payment
Local authorities have a duty to offer direct payments to eligible people who are willing and able to manage them, either with or without assistance.
In England and Wales, a recipient of a direct payment must be at least 16 years old, and be a disabled person (this includes a person with dementia), a carer, or someone with parental responsibility for a disabled child. They must have been assessed as having eligible community care needs or eligible carer needs (see 'Personal budgets for carers').
Appointing a 'suitable person'
Direct payments are available to people who lack the ability (called 'mental capacity') to agree to manage them. They must have a 'suitable person' to manage the money on their behalf. This must be someone reliable who will manage affairs in the best interests of the person, such as a close family member. The suitable person will often (though not always) be someone who has power of attorney for that person.
The local authority is responsible for setting up and monitoring the arrangement, and they are responsible for deciding whether someone is a suitable person. They need to find out who the person receiving the care would have wanted to take on this role, and what is in that person's best interests.
The local authority must consult:
- the person receiving care
- anyone currently engaged in caring for the person
- anyone who has been named by the person (before they lost capacity) as someone to be consulted about the suitable person or about related matters such as their personal welfare
- any written statement of wishes and preferences made by the person before they lost capacity
- an attorney (of any kind) or a deputy.
A suitable person must:
- be able to manage the payments
- not employ any spouse, civil partner or partner using the money from the direct payment (except in some specific situations)
- always act in the person's best interests, following the Mental Capacity Act.
How payments are made
Direct payments are usually paid into a bank account set up specifically for this purpose. The local authority will sometimes ask to look at this account so they can check that the money is being spent appropriately and meeting the assessed needs.
Prepaid cards, similar to those used for utilities (such as electricity bill payments), are used by some local authorities for the payment of personal budgets.
The local authority will tell whoever manages the payments what records must be kept and what information must be provided, such as timesheets signed by a personal assistant or receipts for services.
Anyone receiving their personal budget in the form of direct payments can choose to stop them at any time. The local authority should then arrange alternative services so that their care needs are still met.
The local authority can decide to stop direct payments if they feel that care needs are not being met, or if the person responsible for managing the payments is unable to do so. Under these circumstances, the local authority can offer another method to manage the personal budget.
What direct payments can be used for
Direct payments can be used to buy a range of things, such as:
- the services of a care agency chosen by the individual
- a personal assistant (instead of a carer arranged by the local authority)
- visit to a community or social activity, such as going to a club, concert or sport event
- an educational activity
- an item of equipment to meet an outcome shown in the support plan
- complementary therapies, such as aromatherapy or music therapy, to improve wellbeing in line with the support plan
- transport - to visit family and friends or attend a leisure or educational activity
- support to get to a café to meet friends, or to go to a place of worship
- taking a break with a carer
- respite care for up to four weeks in any 12-month period.
This list is not exhaustive. There is a considerable range of suitable products and services, to meet the varied needs and interests of those receiving direct payments. Different local authorities' policies may vary on what a personal budget can and cannot be used for. A person can approach the local authority directly and speak with a social worker about the details of the local authority's policy.
A direct payment cannot be used:
- to pay a spouse, civil partner, live-in partner, or a close relative who lives in the same household, to care for the person, except in certain circumstances that have been agreed with the local authority
- for food
- for rent
- for any illegal or unlawful purpose
- to buy services from the local authority (this can be done with a personal budget via a managed account)
- to pay for anything that is not directly related to meeting an eligible social care need as set out in the support plan.
Under the current system, a direct payment cannot be used to pay for permanent residential care in a care home, though this may change in the future. It is, however, possible to pay for a short stay of up to four weeks within any 12-month period.
A direct payment can be used to employ a personal assistant (PA). A PA provides some of the help and support that may be required, both at home and in the community.
PAs need to have a range of skills to take on this work, and can be employed to do a great variety of tasks. This could include personal care (eg help with washing and dressing), walking the dog, watering plants, reading letters or helping the person on holiday.
If the person chooses to employ a PA, the personal budget amount should include money to recruit staff and to pay insurance, wages, national insurance, holiday, and sickness, maternity and redundancy pay. The local authority should take this into account when calculating the personal budget.
If a PA or other care worker is employed, a plan must be made in the event that they are sick or on holiday. This emergency plan should be included in the support plan. The local authority has a duty of care and must be sure that care needs are being met if there is a problem.
Direct payments example
Mahendra is 60 years of age and has early-onset dementia. He lives in a village in Nottinghamshire with his wife who is his main carer. Mahendra's wife needed a break from caring and Mahendra needed some social interaction.
Before receiving a direct payment, Mahendra attended a day centre where he could play dominos or bingo for two days a week, but he didn't enjoy it and felt he was too young for traditional day care services. He contacted his social worker to ask about receiving his personal budget as a direct payment.
Through the use of a direct payment he was able to find a male PA who shared similar interests. They enjoyed talking about tennis and Mahendra's work as a telecoms engineer. A direct payment support service was able to help them with legal issues around employment. While Mahendra spent time with his PA, Mahendra's wife had free time to relax and to visit friends.