CARE ACT 2014
People with capacity can request a direct payment and where they meet the conditions set out. The local authority must provide direct payments to meet their assessed eligible needs.
April 2018: Section 9, Long Term Stay in a Care Home has been updated as the cap on care costs, introduced by the Care Act 2014 and planned for 2020, will no longer be implemented.
Direct payments are monetary payments made to individuals who request to receive one to meet some or all of their eligible care and support needs (see Eligibility). They are the preferred means of providing personalised care and support. They can provide independence, choice and control by enabling people to meet their eligible needs by commissioning their own care and support. Direct payments, along with personal budgets and personalised care planning, authorised for the first time in the Care Act 2014, provide the platform with which to deliver a modern care and support system. Adults should be encouraged to take ownership of their care planning and should be free to choose how their needs are met, whether through local authority or third party provision, by direct payments or a combination of the three approaches (see Personal Budgets).
For direct payments to have the maximum impact, the processes involved in administering and monitoring them should incorporate the minimal elements that allow the local authority to fulfil its statutory responsibilities. These processes do not restrict choice or stifle innovation by requiring the adult’s needs are met by a particular provider and do not place undue burdens on them to provide information to the local authority. An effective monitoring process should also go beyond financial monitoring and should include aspects such as identifying wider risks and issues, for example non-payment of tax and provision of employers’ liability insurance where this is appropriate.
The local authority also has a key role in ensuring that adults are given relevant and timely information about direct payments, so they can decide whether to request a payment and, if they do, so that they can be supported to use and manage the payment appropriately. The route to a direct payment is for a person to request one, but the local authority should support the person’s right to make this request by providing information and advice as detailed above. People should not be forced to take a direct payment against their will, but should be informed of the choices available to them.
The availability of direct payments should be included in the universal information service that all local authorities are required to provide (see Information and Advice). This should set out:
This will allow people to be fully aware about what direct payments are and whether they are something of interest. In addition to provision of this general information, authorities must also explain to people what needs could be met by direct payments during the support planning process.
Local authorities have a crucial role to play in promoting the use of direct payments, and enabling people to make requests to receive direct payments in an efficient way. However, the gateway to receiving a direct payment must always be through the request from the person. Local authorities must not force people to take a direct payment against their will, or allow people to be placed in a situation where the direct payment is the only way to receive personalised care and support. However, local authorities are encouraged to prompt people to consider direct payments and how they could be used to meet needs.
It is expected that most requests to receive direct payments will occur during the care planning stage as this is when authorities must inform the person of the needs that could be met via direct payments. However, local authorities must consider requests for direct payments at any time, and have clear and swift processes in place to respond to the requests. For example, an adult may request a direct payment before a scheduled or anticipated review. In these cases, the local authority should assess the request on the same basis as a request made during care planning. In practice, it may be convenient to consider the request at the same time as a review of the care plan. In these cases, the review should be brought forward so as not to delay the consideration of the direct payment request (see Review of Support Plans).
See also Mental Capacity
The following considerations should be made when assessing capacity:
Mental capacity is the ability to make a decision. Under the Mental Capacity Act 2005, a person lacks capacity in relation to a matter if, at the material time, they are unable to make a decision in relation to the matter because of an impairment of, or a disturbance in the functioning of, the mind or brain.
Assessments of capacity must always be made on a case by case basis, in relation to the specific decision to be made. Assumptions should not be made due to the existence of a particular condition, nor on whole groups of people.
Consideration should also be given to whether capacity is constant or likely to fluctuate. Where it is clear that fluctuating capacity is a known issue, or likely to be, this should be covered in the care plan which details the steps to take where capacity fluctuates. The Care and Support (Direct Payments) Regulations 2014 allow for direct payments to continue to be made in cases of fluctuating capacity (see Section 16, Terminating Direct Payments).
Where the local authority is satisfied that the person has capacity to make a request for direct payments to cover some or all of their care needs, it must consider each of the four conditions in the Care Act. 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 authority must clarify at the earliest stage possible where the request originates from.
Where a nominated person has been requested to receive the direct payment, the authority should involve the nominated person in any appropriate stages of the care planning journey, such as the development of the care plan, as long as the person with care needs agrees to this. Where the person does not specifically request this involvement, the local authority should consider whether to encourage the person to make that request. During this process, the nominated person should receive information regarding the local authority’s direct payments processes, as well as information and advice on using and managing the direct payment, so that the nominated person understands their legal obligations as the direct payment recipient to act in the best interests of the person requiring care and support (see also Section 10, Becoming an Employer and Direct Payments: Nominated and Authorised Persons).
In cases where the adult in need of care and support has been assessed as lacking capacity to request a direct payment, an authorised person can request the direct payment on the adult’s behalf. In these cases, the local authority must satisfy itself that five conditions are met in full. Failure to meet any of the conditions results in the request being declined. The conditions are:
After considering the suitability of the person requesting the direct payment against the appropriate conditions in the Care Act, the local authority must make a determination whether to provide a direct payment. When accepted the decision should be recorded in the support plan. Where refused, the person or person making the request should be provided with written reasons that explain the decision and made aware of how to appeal the decision through the local authority’s complaints process (see Complaints).
The Care Act defines one of the conditions to be met is that the direct payment is an appropriate way to meet the needs in question (or, in respect of aftercare services, an appropriate way to discharge its duty under section 117 of the Mental Health Act 1983). Local authorities must not use this condition to arbitrarily decline a request for a direct payment. For example, there may be instances where a person is obliged to receive services as a condition of mental health legislation (including a community treatment order, guardianship or leave of absence from hospital under the Mental Health Act or provisions in other mental health legislation). In these cases, although the person is being obliged to receive services rather than choosing to present for services, it may still be appropriate to give the person the responsibility of meeting their needs via a direct payment, if this is what is requested. Particular consideration should be given to these cases when applying the conditions set out in the Act. In all cases, appropriateness is for local authorities to determine, although it is expected that in general, direct payments are an appropriate way to meet most care and support needs.
However, there may be cases where a direct payment is not appropriate to meet needs. The regulations set out that direct payments cannot be made to adults subject to a court order for a drug or alcohol treatment programme or similar schemes.
A further condition is that the local authority must be satisfied that the person is able to manage the direct payment by him or herself, or with whatever help or support the person will be able to access. Local authorities should therefore take all reasonable steps to provide this support to whoever may require it. To comply with this, many local authorities have contracts with voluntary or user led organisations that provide support and advice to direct payment holders, or to people interested in receiving direct payments. This condition should not be used to deny an adult from receiving a direct payment without consideration of support needs. Consideration should also be given to involving a specialist assessor in deciding on care and support requirements, particularly if one was used during the assessment process (see Assessment).
In all cases, consideration of the request should be concluded in as timely a manner as possible. When a request for a direct payment is declined, the adult in need of care and support, and any other person involved in the request (that is a nominated or authorised person), should (subject to Data Protection Act 1998 requirements) receive the reasons in a format that is accessible to them. This should set out which of the conditions in the Care Act have not been met, the reasons as to why they have not been met and what the person may need to do in the future to obtain a positive decision. The consideration stage should be undertaken as quickly as is reasonably practicable, and the local authority must provide interim arrangements to meet care and support needs to cover the period in question.
Where the request is declined, the local authority should continue the care planning process so that it can seek to agree with the person how best to meet their needs without the use of direct payments (see Support Planning).
The local authority must be satisfied that the direct payment is being used to meet the care and support needs set out in the plan and should therefore have systems in place to proportionally monitor direct payment usage to ensure effective use of public money.
The Care and Support (Direct Payments) Regulations 2014 set out that the local authority must review the making of direct payments initially within six months and thereafter every twelve months. It must not require information to be provided more often and in more detail than is reasonably required for the purpose of enabling the authority to know that making direct payment is still an appropriate way of meeting the needs, and that the conditions upon which it is made are met.
Local authorities should not design systems that place a disproportionate reporting burden upon the individual. The reporting system should not clash with the policy intention of direct payments to encourage greater autonomy, flexibility and innovation. For example, people should not be requested to duplicate information or have onerous monitoring requirements placed upon them. Monitoring should be proportionate to the needs to be met and the care package. Local authorities therefore should have regard to lowering monitoring requirements for people that have been managing direct payments without issues for a long period.
The amount of the direct payment should be derived from the personal budget (see Personal Budgets) as set out in the support plan (see Support Planning) and thus must be an amount which is sufficient to meet the needs the local authority has a duty of power to meet. The direct payment amount will reflect whether the person is required to make any financial contribution or is requesting a direct payment for only a part of their care and support requirements. The local authority cannot require financial contributions to a direct payment for after care services under Section 117 of the Mental Health Act 1983; these must be provided without charge.
It is ultimately for authorities to decide whether payments are made on a gross or net basis in consultation with appropriate stakeholders. However, local authorities who operate systems of providing gross direct payments should consider the benefits of moving to net payments as these reduce transaction and process costs for both the authority and the person receiving the direct payment.
The local authority should have regard to whether there will be costs such as recruitment costs, Employers’ National Insurance Contributions, and any other costs by reason of the way in which the adult’s needs will be met with the direct payment. If these costs will be incurred their amount must be included in the personal budget (and thus direct payment) if it is appropriate for the adult to meet the needs in a way which incurs the costs. Some local authorities include one off payments within the direct payment to cover these factors. In addition, other authorities have commissioned support services such as brokerage, payroll and employment advice as part of their general direct payment offer.
Where a direct payment recipient is using their payment to employ a personal assistant (PA) or other staff, the local authority should ensure that there are clear plans in place of how needs will be met in the event of the PA being absent, for example due to sickness, maternity or holiday. Local authorities still have a duty to ensure needs are being met, even if the person makes their own arrangements via the direct payment, so contingencies may be needed. Where appropriate, these should be detailed in the support plan, or support plan.
Specific information should also be given to people about the requirements to have plans in place for redundancy payments due to circumstances such as moving home, a change in care and support needs, or the result of the death of the direct payment holder, or care recipient. If the person meets needs by directly employing someone, they will be responsible for all costs of employment including redundancy payments and this should be made clear to people as part of the information and advice process before a decision is made whether to request direct payments. The local authority must ensure that the direct payment is sufficient to meet these costs if it is appropriate for the adult to meet their needs by employing someone.
Normally, if someone dies any employment liabilities are met by the adult’s estate but with direct payments local authorities and adults have freedom to develop their own arrangements for dealing with this issue. This could include using any unspent direct payment to contribute to any redundancy costs, having insurance in place that covers redundancy or the local authority agreeing to cover redundancy payments through the direct payment amount.
Whatever arrangements are made, it is important that the local authority and direct payment holder are both clear as to their responsibilities in this regard in order to avoid any disputes at a sensitive time for family and carers. Decisions made should be recorded in care plans.
Local authorities should also consider how to recover unspent direct payments if the recipient dies. For example, if someone wishes to pay an agency in advance for its services, the local authority should bear in mind it may be difficult to recover money paid for services that were not in fact delivered. Local authorities should also consider, if the direct payment recipient does leave unspent funds to be recovered, that before their death the direct payment recipient may have incurred liabilities that should legitimately be paid for using the direct payments (for example, they received services for which payment had not been made at the time of death). The local authority may need to consider any redundancy costs payable to personal assistants, and be prepared to provide advice on how these might be met. As with other costs the personal budget must be a sufficient amount to meet the person’s needs, including the provision of any redundancy costs, if appropriate to meet needs, and subject to other arrangements that may have been made.
Local authorities should ensure all direct payment recipients are supported and given information in regards to having the correct insurance cover in place. Direct payments recipients should be given support to understand the benefits that insurance cover can provide, and the direct payment should therefore include an amount to cover the cost of employers’ liability insurance and any other insurance that is required in order that the adult can meet their needs in the ways specified in the care plan.
The local authority must also have regard to where the direct payment can be integrated with other forms of public funding, such as personal health budget direct payments. Where this is apparent, the local authority should take steps to work with partners to combine the payments, as long as the person and all parties agree. For example, the local authority could agree with the NHS that social care and health direct payments are combined and that monitoring is performed solely by one organisation, reporting to the other as appropriate. This will avoid the adult having multiple bank accounts and having to supply similar information to public bodies to account for spending direct payments, while allowing both bodies to meet their statutory responsibilities.
Direct payments are designed to be used flexibly and innovatively and no unreasonable restriction should be placed on the use of a payment, as long as it is being used to meet eligible care and support needs.
The Care and Support (Direct Payments) Regulations (2014) do not allow the direct payment to be used to pay for care from a close family member living in the same household, except where the local authority considers it is necessary to do so and the payment will be able to cover either:
The distinction between ‘care’ and ‘administration / management’ allows an adult to pay a close family member living in the same household to provide management and / or administrative support to the direct payment holder in cases where the local authority deems this to be necessary. This is intended to reflect the fact that in some cases, especially where there are multiple complex needs, the direct payment amount may be substantial.
The management and administration of a large payment, along with organising care and support, can be a complex and time consuming task. This allows family members performing this task to be paid a proportion of the direct payment, similar to what many direct payment holders pay to third-party support organisations, as long as the local authority allows this.
This is not intended to be income replacement and people interested in requesting this option should be informed of tax and employment implications, any impacts upon other benefits and given (or signposted) to information and advice to help them decide (see Information and Advice).
The local authority should be satisfied that it is necessary to make the payment to the family member to provide this service and that the direct payment will only be used for administration and management of the payment. The circumstances and payment amount should be decided and agreed with the adult requiring care and support, the family member, local authority and any other person (for example an advocate), with the local authority taking steps to ensure all parties agree.
These decisions should be recorded in the care plan and include the amount of the payments, their frequency and the activities that are covered. This arrangement should also be taken into account during allocation of the personal budget so the amount remains sufficient to meet the person’s needs.
Local authorities need to have in place an agreement between all parties about what steps to take in case of a dispute regarding the management of the payment by a household family member. This will be especially relevant where the person providing administrative and management is also the nominated or authorised direct payment recipient.
It would not be appropriate to allow this where there is a risk that the direct payment may be abused or there are other sensitivities such as potential safeguarding issues (see Adult Safeguarding).
Direct payments cannot currently be used to pay for adults to live in long term care home placements. They can be made to enable adults to purchase short stays in care homes, provided that any stay does not exceed a period of four consecutive weeks in any 12 month period. This can be used to provide a respite break for a carer, for example.
When the interim period between two stays in care homes is less than four weeks, the two stays should be added together to make a cumulative total, which should also not exceed four weeks if it is to be paid for with direct payments. On the other hand, if two stays in care homes are more than four weeks apart then they are not added together.
Once a direct payment recipient has had four consecutive weeks in care homes or two or more periods separated by less than four weeks that added together total four weeks, then they cannot use their direct payments to pay for any more care home services until 12 months have passed from the start of the four week period. On the other hand, as long as each stay is less than four weeks and there is an interim period of at least four weeks between two or more stays which added together exceed four weeks, the service recipient may use their direct payments to pay for residential breaks throughout the year.
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 Charging and Financial Assessment for guidance on choice of accommodation).
The time limit is imposed to promote people’s independence and to encourage them to remain at home rather than moving into a long term care home placement. Where a person is constantly using the direct payment to pay for a short term care home stays, the local authority should consider whether to conduct a review in order to ensure that the care plan is still meeting the adult’s needs.
Adults who are living in care homes may receive direct payments in relation to non-residential care services. For example, they may have temporary access to direct payments to try out independent living arrangements before making a commitment to moving out of their care home. Direct payments can also be used by adults living in care homes to take part in day time activities. This can be particularly empowering for young people in transition (see Transition to Adult Care and Support).
Direct payments cannot currently be used to secure long term stays in a care home. However, the government intends to extend rights to direct payments in such circumstances from April 2020.
Please note: The Government will no longer progress with a cap on care costs in 2020, delayed from 2016. A Green paper will be published in the summer of 2018 regarding new legislation for social care reform.
Local authorities should give clear advice about their responsibilities when managing direct payments, and whether the person in receipt of direct payments needs to register with HM Revenue and Customs (HMRC) as an employer.
Becoming an employer carries with it certain responsibilities and obligations, in particular to HMRC, and people need to be aware of these before agreeing to take up a direct payment. Disability and tax – a guide provides information on being an employer.
The local authority should consider using the proportionality principle, whether to carry out checks to make sure any PAYE income tax and National Insurance contributions deducted from an employee’s pay are paid to HMRC and that employment payments do not breach the national minimum wage and conform to pension requirements, if eligible. Some people may not need this check to be performed, but it may be more appropriate in other cases.
Where it becomes clear that payments, or returns detailing employee information deductions, have not been made or that the individual is failing to meet their obligations as an employer generally, the direct payment scheme should be reviewed and consideration given to whether alternative arrangements that result in the direct payment recipient no longer acting as an employer need to be made. Not doing so may result in the individual building up arrears of tax and National Insurance due to HMRC, which may then lead to enforcement action to recover any debt. This situation should be able to be avoided by effective monitoring where appropriate, and by providing clear, accessible upfront information about the responsibilities of becoming an employer.
Many people are interested in using direct payments to become an employer, for example, directly employing a PA. In these instances, the local authority should ensure that the person is given information and advice that explains the difference between a regulated and unregulated provider to help them to make a fully informed decision on how best to meet their needs. Where a direct payment is made, the local authority must also ensure that the authorised person is aware of how to access Disclosure and Barring Service checks on individuals they wish to employ, for example, by ensuring that a check has been made by the agency providing the service, the local authority or by another body. Individuals cannot apply for DBS checks on other individuals. The local authority should make people aware of this and the importance of thorough checks and employment references in the recruitment process.
Where the person wishes to employ their own personal assistant directly, the local authority should also have regard to the guidance published by Skills for Care which details minimum levels of support for individual employers and personal assistants. This guidance recommends local authorities should provide ongoing support through access to training activities, promoting the Workforce Development Fund and encouraging apprenticeships for personal assistants.
There may often be occasions when direct payment holders require a stay in hospital. However, this should not mean that the direct payment must be suspended.
Where the direct payment recipient is also the adult requiring care and support, consideration should be given to how the direct payment may be used in hospital to meet non-health needs or to ensure employment arrangements are maintained. Suspending or even terminating the payment could result in the person having to break an employment contract with a trusted personal assistant, causing distress and a lack of continuity of care when they are discharged from hospital.
In these cases, the local authority should explore with the adult, their carer and the NHS the options to ensure that both the health and care and support needs of the adult are fully met in the best way possible. For example, they may prefer the personal assistant to visit hospital to help with their personal care. This may be especially so where there has been a long relationship between the direct payment holder and the PA. This should not interfere with the medical duties of hospital personnel, but be tailored to work alongside health provision.
In some cases, the nominated or authorised person managing the direct payment may require a hospital stay. In these cases. The local authority must conduct an urgent review to ensure that the person continues to receive care and support to meet their needs. This may be through a temporary nominated / authorised person or through short term care and support arranged by the local authority.
As a general rule, direct payments should not be used to pay for local authority provided services from the adult’s ‘home’ local authority. Where an adult wishes to receive care and support from their local authority, it is easier to provide the service direct to them. This will also avoid possible conflicts of interest where the local authority is providing both the direct payment, but also promoting their services for people to purchase.
There may be cases where the local authority exercises discretion to provide care and support by receiving a direct payment amount, for example, this could be where a person who is using direct payments wants to make a one off purchase from the local authority, such as a place in day care. In these cases, the local authority should take into account the wishes of the adult requiring care and support when making a decision. In one off cases such as these, it may be less burdensome to accept the direct payment amount, rather than providing the service and then reducing the personal budget and direct payment accordingly.
This does not preclude adults from using their direct payment to purchase care and support from a different local authority. For example, an adult may live close to local authority boundaries and another local authority may be able to provide a particular service that their ‘home’ authority does not provide.
Many local authorities have been developing the use of prepaid cards as a mechanism to allow direct payments without the need for a separate bank account, or to ease the financial management of the payment. Whilst the use of such cards can be a useful step from managed services to direct payments, they should not be provided as the only option to take a direct payment The offer of a ‘traditional’ direct payment paid into a bank account should always be available if this is what the person requests and this is appropriate to meet needs. Consideration should be given to the benefit gained from this arrangement as opposed to receiving the payment via a prepaid card.
It is also important that where a prepaid card system is used, the person is still free to exercise choice and control. For example, there should not be blanket restrictions on cash withdrawals from prepaid cards which could limit choice and control. The card must not be linked solely to an online market place that only contains selected providers in which to choose from. Local authorities should therefore give consideration to how they develop card systems that encourage flexibility and innovation, and consider consulting care and support user groups on any proposed changes to direct payment processes.
In circumstances where it is in the adult’s interest to combine the plan and budget with another form of state support (such as personal health budgets), and they agree that plans should be combined, consideration should be given as to whether the person is receiving direct payments from partner organisations, such as the NHS. If so, attempts should be made to harmonise the direct payments so the adult does not have multiple payments each with their own monitoring regime. For example, the local authority can work with the NHS partner to agree on a ‘lead organisation’ that oversees the overall budget and monitors the direct payments to ensure they are being used to meet both health and care needs, while still allowing both bodies to satisfy themselves of their statutory responsibilities.
In addition to monitoring direct payments generally to ensure they are being used to meet care and support needs, the local authority must also review the making of a direct payment within the first six months of making the first payment. (This does not apply to direct payments that pre-date the Care Act.)
This is intended to be a ‘light touch’ review to ensure the adult is comfortable with using the direct payment, and experiencing no initial issues. Ideally it should be incorporated within the initial review of the support plan six to eight weeks after it has been signed off and include elements such as managing and using the direct payment and a discussion of any long term support arrangements that may be necessary, such as payroll, insurance cover and third party support. Local authorities should ensure that reviewing officers are appropriately trained to review direct payments (for example are familiar with financial procedures and employment laws).
This review is not a full review of the adult’s support plan. However, if this review raises concerns or requires actions that affect the detail recorded in the care plan, then a full review of the plan would need to be carried out.
If the direct payment recipient is employing people, the local authority should as part of the review, consider checking, if appropriate, to ensure the individual is fulfilling their responsibilities as an employer, for example, that they are submitting PAYE returns to HMRC, as well as paying tax and National Insurance deductions they have made to HMRC. Following the initial six month review, the direct payment is reviewed no later than every 12 months.
After the six month review, the local authority must then review the making of the direct payment no later than every 12 months. In practice after the initial six month review period, local authorities may wish to consider aligning the annual review of the direct payment with the general review of the support plan (see Review of Support Plans). This will reduce bureaucracy and allow the local authority to review both at the same time.
Where a direct payment is allocated to a nominated / authorised person, or where there is a family carer being paid for management / administrative support, the review should include all of these parties as well as the adult in need of care and support. This will ensure that the local authority receives views from everyone involved in the direct payment, so that it can satisfy itself that there are no initial issues that require resolving.
The outcome/s of the review should be written down and a copy given to all parties. Where there are issues that require resolving, the resolution is agreed with all parties involved, as far as is reasonably practicable. Where appropriate, people should be advised of their rights to access the local authority’s complaints procedure (see Complaints).
Direct payments should only be terminated as a last resort or where there is clear and serious contradiction of the Regulations or where the conditions in sections 31 or 32 of the Act are no longer met (except in cases of fluctuating capacity – see below). All reasonable steps should be taken by the local authority to address any situations arising without terminating the payment. Effective, but proportionate, monitoring processes will help local authorities to identify any potential issues before a termination is necessary.
If terminating a direct payment, the local authority must ensure there is no gap in the provision of care support. Where a decision has been made to terminate a direct payment, the support plan should be revised by the local authority to ensure that the plan is appropriate to meet the needs in question (see Review of Support Plans).
A person to whom direct payments are made, whether to purchase support for themselves or on behalf of someone else, may decide at any time that they no longer wish to continue receiving a direct payment. In these cases, the local authority should ensure there are no outstanding contractual liabilities, and conduct a review of the support plan to consider alternative arrangements to meet the adult’s needs.
A direct payment should also be discontinued if:
Where someone with capacity was receiving a direct payment but then loses capacity to consent, the local authority should discontinue the direct payment to that adult and consider making payments to an authorised person instead. In the interim, alternative arrangements should be made to ensure continuity of support for the adult concerned.
If the loss of capacity to consent appears to be temporary, payments may continue to be made if there is someone else willing to manage payments on the adult’s behalf. This situation should be treated as temporary and should be closely monitored to ensure that when the person has regained capacity they are able to exercise control over the direct payments as before.
If the adult’s loss of capacity to consent becomes prolonged, the local authority should consider making more formal arrangements for an authorised person to take over receipt of the direct payment on behalf of the adult. The local authority should make clear the arrangement is designed to be temporary so the person managing the direct payment does not enter into any long term contractual arrangements.
See also Mental Capacity
Direct payments should be discontinued if:
Direct payments must be discontinued where the local authority has reason to believe that someone who had lacked capacity to consent to direct payments has now regained that capacity on a long term or permanent basis.
The authority should not terminate direct payments to the authorised person before beginning to make direct payments to the service recipient themselves or to arrange services for them, according to their wishes. If the local authority is satisfied that the regaining of capacity will only be temporary, then it can continue to make direct payments to the authorised person if during the period that the adult has the capacity to make the request and is capable of managing the direct payment, the adult will manage the payments for him or herself.
In all cases, as soon as possible the local authority should discuss with the adult, their carer and any person managing the direct payment if it is considering discontinuing direct payments to them, in order to explore all available options before making the final decision to terminate the direct payment. For example, if ability to manage is an issue, the adult can be given an opportunity to demonstrate that they can continue to manage direct payments, albeit with greater support, if appropriate. The local authority should not automatically assume when problems arise that the only solution is to discontinue direct payments.
If the local authority does decide to withdraw direct payments, it will need to conduct a review of the plan should be conducted and agree alternative care and support provision with the adult, their carer and independent advocate, if they have one, unless the withdrawal was following a review after which the local authority concluded that the services were no longer needed.
A minimum period of notice should be established that will normally be given before direct payments are discontinued. This should be included in the information provided to people who are considering receiving direct payments.
It will be extremely unlikely that a local authority will discontinue direct payments without giving notice, although in serious cases this may be warranted, (for example if the authorised person is not acting in the best interests of the person). Local authorities should explain to people, before they begin to receive direct payments, the exceptional circumstances in which this might occur and discuss with them the implications this might have for the arrangements that individuals might make.
If direct payments are discontinued, some people may find themselves with ongoing contractual responsibilities or having to terminate contracts for services (including possibly making employees redundant). Local authorities should take reasonable steps to make people aware of the potential consequences if direct payments end, and any obligations they may have.
There may be circumstances where the adult has lost the capacity to manage the direct payment and there is no one else to manage the payment on their behalf, or where the person needs additional support to terminate arrangements. In these cases, the local authority should have regard as to whether it needs to step in or provide support to ensure that any contractual arrangements are appropriately terminated and that additional costs are not incurred.
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