Direct Payments for Home Care: How They Work (2026)

In short: if the council assesses you as needing care and agrees to help pay for it, you get a personal budget. You can ask for that budget as a direct payment, which is money paid to you (or someone you trust) so you can arrange your own home care. You can use it for an agency or to employ your own carer, as long as you spend it on what is in your care plan.

Personal budgets and direct payments

The NHS explains that your personal budget is the amount your council will pay towards your care and support. The council works it out after a needs assessment, looking at:

• what care and support you need;
• how much it will cost;
• how much you can afford to pay yourself.

You can ask the council to manage the budget for you, pay it to a care provider, or pay it to you as a direct payment. You can also mix these. For example, the council arranges some care and sends you the rest of the money.

Who can get direct payments?

GOV.UK says you can only get direct payments if social services have assessed you as needing care and support. You must be over 16. They can be paid to older people who need community care services and to carers aged 16 or over. Direct payments are available in England, Scotland and Wales.

Whether the council helps with the cost depends on its financial assessment. Age UK says that if you have more than £23,250 in capital counted in the assessment, you are not entitled to help from the council. For care at home, the value of the home you live in is not counted.

Under the Care Act guidance, the council must check 4 conditions. If any one of them is not met, the request is turned down:

• you have the mental capacity to ask for one (or a nominated person agrees to receive it for you);
• the law does not stop the council paying you;
• you can manage the payment, on your own or with help;
• a direct payment is a suitable way to meet your needs.

If the person needing care lacks capacity, an authorised person can ask for the direct payment for them. If the council says no, it should give written reasons and tell you how to complain.

What can you spend it on?

The NHS says you choose how to spend the money, as long as it matches the care plan you agreed with the council. For home care, that might mean:

• paying a home care agency of your choice;
• employing your own carer or personal assistant, who could be the same person every visit;
• a mix of the two.

There are limits. Direct payments cannot pay for a long-term care home place. They can pay for short stays in a care home of up to 4 weeks in a row in any 12 months, for example to give a carer a break. They normally cannot pay a close family member who lives in the same household to provide care, unless the council decides this is necessary.

How the money is paid and checked

• The council pays the money into a bank, building society, Post Office or National Savings and Investments account, or onto a pre-paid card. The guidance says a pre-paid card should not be the only option.
• You may be asked to sign a direct payment agreement. This sets out how to record your spending and, if you employ a carer, your duties as an employer.
• Most councils ask for evidence of how you spent the money every 3 months.
• The council must review the arrangement within 6 months, then every 12 months.
• If you spend the money on something not in your care plan, the council could take it back or stop the payments.

Employing a carer with direct payments

If you use the money to employ someone, you become their employer. The NHS says you may need to arrange background checks or references, tax, National Insurance and pension contributions. You cannot request a DBS check on another person yourself, so ask your council how it can help. Employers of care and support workers paid through direct payments can claim the Employment Allowance, which reduces employer National Insurance. Our guide to employing a private carer covers each legal step.

Personal health budgets

A personal health budget works in a similar way, but it is NHS money for health needs. Adults who get NHS continuing healthcare have a right to one. You can have a personal health budget and a council personal budget at the same time, and ask for both to be paid into the same bank account. A budget that covers both health and social care needs is called an integrated personal budget.

Related guides

• Home Care Agency Checklist: 20 Questions to Ask
• When Home Care Is No Longer Enough: Signs It's Time for a Care Home

Sources

• Apply for direct payments (GOV.UK)
• Personal budgets and direct payments (NHS)
• Getting a care needs assessment (NHS)
• Care and support statutory guidance, chapters 10 to 12 (DHSC)
• What is a personal health budget? (NHS)
• Homecare: how to find the care you need at home (Age UK)
• Employers of care and support workers and Employment Allowance (HMRC)