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BRIEFING PAPER

Number 03735, 20 May 2015

Social care: Direct Payments from a local authority (England)

By Tim Jarrett

Inside: 1. Background and legislation 2. What are Direct Payments 3. Eligibility for direct payments 4. How much funding will be

provided? 5. What Direct Payments can

and cannot be used for

Number 03735, 20 May 2015 2

Contents Summary 3

1. Background and legislation 4

2. What are Direct Payments 5

3. Eligibility for direct payments 6

4. How much funding will be provided? 8 4.1 Direct Payments and other way of meeting needs 8 4.2 Can the cost of direct payments exceed a personal budget? 9

5. What Direct Payments can and cannot be used for 11 5.1 Payment of family members 11 5.2 Care home stays 12 5.3 No requirement to procure services from any particular person 12

Cover page image copyright: Attributed to: DSC_6742 by Philippa Willitts. Licensed under CC BY 2.0 / image cropped

3 Social care: Direct Payments from a local authority

Summary Direct payments enable a person requiring social care to procure that care for themselves. They can be used instead of, or together with, services provided by a local authority (either directly or through a third party), although there are some restrictions on how direct payments can be used.

The following Library papers might also be of interest:

• Social care: paying for care homes places and domiciliary care (England) (SN01911)

• NHS Continuing Healthcare in England (SN06128).

This note applies to England only.

Number 03735, 20 May 2015 4

1. Background and legislation Direct payments were first introduced in 1997 under the Community Care (Direct Payments) Act 1996. Initially, local authorities were given a power, rather than a duty, to make payments for working age disabled adults. The Government indicated that the user group for direct payments could be expanded without the need for further legislation, should the system prove successful.

In 2000, the discretion under the 1996 Act was extended to include older people.

Further legislation was introduced in 2001 to include parents of disabled children and also carers.1

A duty to provide direct payments was introduced in 2003 when regulations made under section 57 of the Health and Social Care Act 2001 made it mandatory for councils to make direct payments to individuals who consented to and were able to manage them with or without assistance.2

In 2009, provision was extended to persons appointed to receive direct payments on behalf of individuals who lack mental capacity and to persons subject to mental health legislation.3

Direct Payments are made under sections 31 to 33 of the Care Act 2014 – with the Care and Support (Direct Payments) Regulations 2014 (SI 2014/2871) providing the details of policy implementation for local authorities – and also section 117(2C) of the Mental Health Act 1983.

1 Carers and Disabled Children Act 2000 which inserted new section 17A into the Children Act 1989

2 Community Care, Services for Carers and Children’s Services (Direct Payments) (England) Regulations 2003 (SI 2003/762). Since revoked and replaced by the Community Care, Services for Carers and Children’s Services (Direct Payments) (England) Regulations 2009 (SI 2009/1887)

3 Community Care, Services for Carers and Children’s Services (Direct Payments) (England) Regulations 2009 (SI 2009/1887)

5 Social care: Direct Payments from a local authority

2. What are Direct Payments As the Department of Health notes in its Factsheet on the Care Act 2014:

A direct payment is a payment of money from the local authority to either the person needing care and support, or to someone else acting on their behalf, to pay for the cost of arranging all or part of their own support. The local authority could make a direct payment instead of arranging or providing any services itself, if the adult asks them to do so. This ensures the adult can take full control over their own care. The local authority must provide a direct payment to someone who meets the conditions in the Act and regulations.4

4 Department of Health, Care Act factsheets – Factsheet 4: personalising care and support planning, updated 4 February 2015

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3. Eligibility for direct payments A person may make a request for direct payments, although how that request is handled depends on whether the person in respect of whom the request is made has the “mental capacity”, which is defined as “the ability to make a decision”.5

For people who have mental capacity, under the Care Act 2014 they must meet all four conditions, as set out in the CSSG which states that:

These conditions need to be met in their entirety; a failure in one would result in the request to receive a direct payment being declined. The conditions are:

• the adult has capacity to make the request, and where there is a nominated person, that person agrees to receive the payments;

• the local authority is not prohibited by regulations under section 33 from meeting the adult’s needs by making direct payments to the adult or nominated person;

• the local authority is satisfied that the adult or nominated person is capable of managing direct payments either by himself or herself, or with whatever help the authority thinks the adult or nominated person will be able to access;

• the local authority is satisfied that making direct payments to the adult or nominated person is an appropriate way to meet the needs in question.6

For people lacking the mental capacity to request a direct payment, the following conditions “must be met in their entirety”:

• where the person is not authorised under the Mental Capacity Act 2005 but there is at least one person who is so authorised, that person who is authorised supports the person’s request;

• the local authority is not prohibited by regulations under section 33 from meeting the adult’s needs by making direct payments to the authorised person, and if regulations under that section give the local authority discretion to decide not to meet the adult’s needs by making direct payments to the authorised person, it does not exercise that discretion;

• the local authority is satisfied that the authorised person will act in the adult’s best interests in arranging for the provision of the care and support for which the direct payments under this section would be used;

• the local authority is satisfied that the authorised person is capable of managing direct payment by himself or herself, or with whatever help the authority thinks the authorised person will be able to access;

• the local authority is satisfied that making direct payments to the authorised person is an appropriate way to meet the needs in question.7

It should be noted that there are some groups who are ineligible for Direct Payments, even if they meet the conditions outlined above.8 The

5 Department of Health, Care and Support Statutory Guidance, October 2014, p203, paras 12.10–12.11

6 As above, p204, para 12.14 7 As above, p205, para 12.17 8 Under regulation 2 of the Care and Support (Direct Payments) Regulations 2014 (SI

2014/2871), Schedule 1 lists those “adults whose needs the local authority must not meet by making direct payments”.

7 Social care: Direct Payments from a local authority

CSSG notes that “the Regulations sets out that direct payments cannot be made to people subject to a court order for a drug or alcohol treatment program or similar schemes”.9

9 Department of Health, Care and Support Statutory Guidance, October 2014, p206, paras 12.20

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4. How much funding will be provided?

4.1 Direct Payments and other way of meeting needs

Under the Care Act 2014, the term “meeting needs” replaces the previous terminology of “providing services”. The CSSG argues that “meeting needs” is an “important concept” which “intended to be broader than a duty to provide or arrange a particular service”: “because a person’s needs are specific to them, there are many ways in which their needs can be met”.10

The CSSG explains that needs are met through care and support planning, adding that direct payments can be the sole way of procuring services to meet needs, or used in combination with other approaches to provide services:

There are a number of broad options for how needs could be met, and the use of one or more of these will depend on the circumstances. Section 8(2) of the Act gives some examples of ways of meeting needs, and would cover:

• the local authority directly providing some type of support, for example by providing a reablement or short-term respite service;

• the local authority arranging for a care and support provider to provide some type of support, for example by commissioning or contracting with a provider;

• making a direct payment, which allows the person to purchase their own care and support; or

• some combination of the above, for example the local authority arranging a homecare service whilst also providing a direct payment to meet other needs.11

In addition, a direct payment is only one of four ways in which a “personal budget” (see below) can be managed, as set out in the CSSG:

• as a managed account held by the local authority with support provided in line with the persons wishes;

• as a managed account held by a third party (often called an individual service fund or ISF) with support provided in line with the persons wishes;

• as a direct payment […]

• a ‘mixed package’ that includes elements of some or all three of the approaches above.12

10 As above, p169, para 10.10 11 As above, p169, para 10.11 12 As above, p194, para 10.30

9 Social care: Direct Payments from a local authority

4.2 Can the cost of direct payments exceed a personal budget?

The Care Act 2014 put the concept of a “personal budget” onto the statute book for the first time.13 The CSSG explains that “the personal budget is the mechanism that, in conjunction with the care and support plan, or support plan, enables the person, and their advocate if they have one, to exercise greater choice and take control over how their care and support needs are met”.14

The Care Act 2014 states that “the personal budget must be an amount that is the cost to the local authority of meeting the person’s needs”; however, “consideration should also be given as to whether the personal budget is sufficient where needs will be met via direct payments, especially around any other costs that may be required to meet needs or ensure people are complying with legal requirements associated with becoming an employer”.15

However, this does not mean that where providing direct payments would be more expensive than, say, local authority provided services, that direct payments should always be provided. The CSSG states that “a request for needs to be met via a direct payment does not mean that there is no limit on the amount attributed to the personal budget”. The CSSG notes that “it is more appropriate to meet needs via directly-provided care and support” if there is no alternative provider in a local market, or “the costs of an alternate provider arranged via a direct payment would be more than the local authority would be able to arrange the same support for, whilst achieving the same outcomes for the individual”.16

The CSSG does provide some examples of where a personal budget should be increased to allow services to be purchased through direct payments, noting that “in all circumstances, consideration should be given to the expected outcomes of each potential delivery route”:

It may be that by raising the personal budget to allow a direct payment from a particular provider, it is expected to deliver much better outcomes than local authority delivered care and support, or there may be other dynamics such as the preferred option reducing the need for travel costs, or out of hours care. In addition, efficiencies to the local authority (for example through an individual making their own arrangements) should also be considered. Decisions should therefore be based on outcomes and value for money, rather than purely financially motivated.17

Where a direct payment arrangement will cost more than is budgeted for in a personal budget, the CSSG advises that:

the care plan should be reviewed to ensure that it is accurate and that the personal budget allocation is correct. The authority

13 For more information on the personal budget, see section 1 of the Library paper Social care: paying for care homes and domiciliary care (England) (CBP01911)

14 Department of Health, Care and Support Statutory Guidance, October 2014, p187, paras 11.2–11.3

15 As above, p192, para 11.25 16 As above, p193, para 11.26 17 As above, p193, para 11.27

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should work with the person, their carer and independent advocate (if there is one) to agree on how best to meet their care and support needs. It may be that the person can take a mixture of direct payment and local authority-arranged care and support, or the local authority can work with the person to discuss alternate uses for the personal budget. Essentially, these discussions will take place during the planning process and local authorities should ensure that their staff are appropriately trained to support personalised care and support, and to facilitate decision-making.18

18 As above, p193, para 11.28

11 Social care: Direct Payments from a local authority

5. What Direct Payments can and cannot be used for

As the CSSG states: “The direct payment is designed to be used flexibly and innovatively and there should be no unreasonable restriction placed on the use of the payment, as long as it is being used to meet eligible care and support needs”.19

However, there are some restrictions on the use of Direct Payments, as set out in the following sub-sections.

5.1 Payment of family members Under the current rules, a Direct Payment can be made to pay a member of the close family living in the same household in respect of the provision of “management and/or administrative support to the direct payment holder” and only in those cases “where the local authority determines this to be necessary”.20

In the explanatory memorandum to the regulations, the Department of Health explained:

This change is intended to allow local authorities to make managing direct payments less onerous by allowing a nominal payment to be paid to a family carer, similar to the way direct payment holders can pay agencies to manage aspects of the payment on their behalf. This can be helpful where a person may have multiple, complex needs and may have several different care workers to arrange and manage.21

However, it remains the case that direct payments cannot usually be made to a close family member living in the same household as the person in receipt of a direct payment. Ordinarily, the regulations prevent direct payments being made to:

a) the spouse or civil partner of the adult;

b) a person who lives with the adult as if their spouse or civil partner;

c) a person living in the same household as the adult who is the adult's—

(i) parent or parent-in-law,

(ii) son or daughter,

(iii) son-in-law or daughter-in-law,

(iv) stepson or stepdaughter,

(v) brother or sister,

(vi) aunt or uncle, or

(vii) grandparent;

19 As above, p210, para 12.35 20 As above, p211, para 12.36 21 Explanatory Memorandum to the Care And Support (Direct Payments) Regulations

2014, 2014 No. 2871, p2, para 7.4

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d) the spouse or civil partner of any person specified in sub-paragraph (c) who lives in the same household as the adult; and

e) a person who lives with any person specified in sub-paragraph (c) as if that person's spouse or civil partner.

However, there is not a total ban on direct payments to such family members; under regulation 3(2) it continues to be the case that direct payments can be used to pay them “if the local authority considers it is necessary to do so”.

5.2 Care home stays In most cases, a direct payment cannot be used to fund a long-term stay in a care home. The exceptions are those local authorities where the Government is currently testing the use of direct payments in care homes,22 with the aim of introducing the policy across England in 2016.

For all other local authorities, direct payments can be used to fund a short stay in a care home, defined as not exceeding a period of four consecutive weeks in any 12 month period; the break between stays in a care home needs to be more than four weeks in order for them not to count as a single stay.

If a stay of more than four weeks in total does occur, then a person “cannot use their direct payments to pay for any more home services care until 12 months have passed from the start of the four-week period”.23

However:

People can receive additional weeks in a care home once they have reached the four-week maximum. They cannot purchase the stay using their direct payments, but if the local authority and the person agrees that a longer stay is needed, it can still arrange and fund stays for the person. There is no restriction on the length of time for which the local authority may arrange such accommodation for someone (see chapter 8 for guidance on choice of accommodation).24

5.3 No requirement to procure services from any particular person

Regulation 4(3)(a) states that, when making a direct payment, one of the things that a local authority cannot make a condition is that the person in receipt of direct payments has to have their needs met by “any particular person”.

22 The list of “trailblazer” local authorities is set out in Schedule 2 of the Care and Support (Direct Payments) Regulations 2014 (SI 2014/2871) and includes: Bristol City Council, Cornwall Council, Dorset County Council, Gateshead Council, Hertfordshire County Council, Hull City Council, Lincolnshire County Council, London Borough of Enfield, London Borough of Havering, London Borough of Redbridge, Manchester City Council, Milton Keynes Council, Norfolk County Council, North Lincolnshire Council, Nottinghamshire County Council, Staffordshire County Council, Stockport Council, and Surrey County Council.

23 Department of Health, Care and Support Statutory Guidance, October 2014, p212, para 12.43

24 As above, p212, para 12.44

13 Social care: Direct Payments from a local authority

The Department of Health explained that this provision, new to the 2014 direct payment regulations, “is intended to support the policy intention for direct payments to be used innovatively and flexibly, and to prevent local authorities from stating that a direct payment can only be used with a particular provider”.25

25 Explanatory Memorandum to the Care And Support (Direct Payments) Regulations 2014, 2014 No. 2871, p2, para 7.5

BRIEFING PAPER Number 03735, 20 May 2015

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