This chapter was last reviewed and/or updated April 2021.


  • Evidence suggests that people who achieve the best outcomes in relation to their social care needs are those who have had the most control and direction over their support.
  • Once someone is deemed eligible for on-going council-funded support, they must receive this via a Personal Budget (PB) which may be received as a Direct Payment (DP).
  • The person must be advised about the support available from Penderels to help them manage a direct payment.
  • The person must have flexibility to use their direct payment to meet the outcomes in relation to the care and support needs in their Care and Support Plan.
  • Where there is a delay in setting up a Direct Payment, practitioners should put an interim service in place for people where the risk indicates this is needed.

1. Introduction

Direct Payments are cash payments intended to give greater choice in care, enabling people to live independently in their own homes, and providing greater flexibility regarding how their service is provided and by whom. Direct payments enable a person requiring social care to arrange 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 Care Act requires us to ensure that the personal budget is sufficient to meet eligible needs and that we base this sufficient amount on what we would ordinarily expect to pay to meet eligible needs, with consideration of local market conditions. Personal budgets delivered through a Direct Payment are subject to assessed financial contributions in the same way as any community care service.

Lincolnshire County Council’s approach to providing Direct Payments, including who can get a Direct Payment and what it can be spent on, can be found in greater detail below:

Please note: Where there is a delay in setting up a Direct Payment, practitioners must consider the sustainability of informal support and put an interim service in place for people where the risk indicates this is needed.

Direct Payment Microsoft Teams channel

This Channel aims to offer practitioners:

  • easy access to all Direct Payment related documents and information to further develop your knowledge and understanding of Direct Payments;
  • sharing of updates, good news stories regarding flexible use of Direct Payments, discuss good practice, network with colleagues;
  • opportunities to raise questions, thoughts and concerns;
  • sharing of presentations, invitations to join meetings, workshops / online training.

2. Policy, Procedure and Guidance

The policy, procedure and guidance contain information on:

Direct payments and the Care Act 2014:

  • The Care Act – legislative context.

How direct payments are made available:

  • who is eligible for a direct payment;
  • who is not eligible;
  • what services are eligible;
  • what services are not eligible;
  • assessing capacity;
  • adults with capacity;
  • adults lacking capacity;
  • request from a carer;
  • ability to manage a Direct Payment and support;
  • Third Party Supported Accounts (TPSA).

Purchasing service and buying in support:

  • employing a Personal Assistant;
  • self-employed Personal Assistants;
  • references and Disclosure and Barring Service (DBS) checks;
  • employer responsibilities.

Using Direct Payments:

  • sufficiency and budgeting;
  • paying family members for administration;
  • pooling Direct Payments.

Initiating payment and monitoring;


Reviewing Direct Payments;

Suspension and termination.

3. Prepaid Cards

New DP recipients will receive their Direct Payments via a Prepaid Card unless this does not meet their needs. It is envisaged that this will speed up the process of putting a Direct Payment in place as they no longer need to open bank accounts. One key change is to ensure individuals are who they say they are; this means checking their identity when we think they are likely to have a Direct Payment. Detailed guidance on Prepaid Cards and the Know Your Customer Process  can be found here:

The Factsheet-Direct Payments can be provided to customers and their families if they are considering a Direct Payment.

Existing customers who receive their personal budget via Direct Payment should be given the opportunity to have a Prepaid Card account.

At review Practitioners will be prompted to have a conversation about prepaid cards with the person being assessed, provide them with relevant information, and answer any questions they may have.

The links below are the internal process for changing a Direct Payment over to a Prepaid Card and a copy of the Customer Information sheet.

4. Virtual Wallet

The Virtual Wallet enables agreed funding (from social care, health, and the individual) to be loaded into an online account which recipients draw down from to fund their services accessed via an e- Marketplace (hosted on the Connect to Support Lincolnshire website). Closely resembling an online bank account, the Virtual Wallet is easily used to make payments whilst also providing direct access to receipts, invoices, and spending reports.

Further Virtual Wallet information can be found on the ACCW – Direct Payments Microsoft Teams channel.

4.1 What are the benefits of a Virtual Wallet?

  • Can be set up instantly by the recipient, with support from the software provider;
  • No need to open separate bank account;
  • Impossible to overspend;
  • Accessible 24/7;
  • Easy monitoring of budget spend and services;
  • Reduces the need to carry / handle cash;
  • Simple record keeping and audit evidence all in one place;
  • Access to a diverse marketplace;
  • Online calendar to easily view, edit or cancel appointments;
  • Simple care planning, with an easy to use drag and drop tool;
  • Available to all.

5. Personal Health Budgets

A personal health budget (PHB) is an amount of money to support identified health care and wellbeing needs, which have been planned and agreed between the patient or their representative and the local NHS team. Anyone eligible to receive NHS Continuing Healthcare has a right to receive their support as a personal health budget. This right has been extended to people who access wheelchair services whose posture and mobility needs impact their wider health and social care needs and to those eligible for section 117 aftercare services.

Personal budgets are designed to enable people who have long term conditions and disabilities to have greater choice, flexibility and control over health care and support they receive. Opportunities to request a PHB may when a Continuing Health Care Assessment is completed or reviewed.

There are three ways for a person to receive a PHB:

  • Direct Health Payment: The person or their representative becomes the employer, holds the budget and manages it in accordance with the agreed support plan.
  • Third Party Account: Someone not associated with the NHS or the person becomes the employer, holds the budget and manages it in accordance with the support plan.
  • Notional budget: This may be referred to as a ‘traditional care package’. The CCG/CHC team commission a care package in accordance with the support plan through a care agency.

Personal health budgets should be discussed with the individual once they have received confirmation that they are eligible for NHS Continuing Healthcare but can be requested at any time.

For more information on personal health budgets, visit the Lincolnshire Clinical Commissioning Group website or NHS website.