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Direct Payments

Frequently Asked Questions

What are Direct Payments?

  • Direct Payments are a way of delivering community care.
  • Their purpose is to increase choice and independence for users by giving more control over support arrangements.
  • The person receiving the Direct Payment is responsible for accounting for how the money is spent.
  • A Direct Payment cannot replace: NHS Services, Housing Services (e.g. Disabled Facilities Grants) or DSS benefit payments.
  • A Direct Payment cannot affect social security benefits nor be classed as taxable income.
  • Direct Payments in Sutton are subject to the same financial assessment by London Borough of Sutton as for community care services.
  • There is no maximum or minimum level to a Direct Payment.
  • It must be cost-effective and sufficient to pay for support of a quality acceptable to the authority.
  • A Direct Payment must be sufficient to enable the recipient to meet their legal obligations.
  • People receiving Direct Payments can choose to mix the services they buy and can opt to cease using Direct Payments at any time.

Who can receive Direct Payments?

  • Older and disabled people aged 16 and over who are assessed as needing services. All impairments are included (physical, sensory, learning, HIV and AIDS, emotional) but people subject to certain mental health aftercare or criminal justice legislation may not be able to receive Direct Payments.
  • A person with parental responsibility for a disabled child
  • Carers aged 16 and over who are caring for a disabled adult
  • People must be willing and able to manage Direct Payments, alone or with assistance.

What can a Direct Payment be used for?

  • It can be used to employ personal assistants or purchase support that the local authority is satisfied will meet that person's assessed needs.
  • Unlike services arranged by the local authority, with a Direct Payment, the user is responsible for ensuring the quality of the services received.
  • A Direct Payment cannot be used to purchase permanent residential care or services provided directly by the local authority.

Keeping Financial Records

All payments from your Direct Payments account should be by cheque, standing order, direct debit or electronic transfer (for example, Internet banking or telephone banking). Actual cash in the form of notes or coins should not be withdrawn from the account.

Yes. You should get and keep receipts for any payment you make from your Direct Payments account. You should also keep a record of all payments that you make, because you will have to account to Social Services for all your expenditure every six months. Encompass can help you with this.

The prepaid account was introduced in Sutton in 2017 as an additional way to manage the money side of a direct payment. Under this arrangement, a separate bank account is set up for you by Encompass on behalf of London Borough of Sutton, who then make payments into it, usually every four weeks. You can then pay for the things in your support plan from this account. If you choose to use a prepaid account for your direct payment, you won't be required to submit reconciliation forms to London Borough of Sutton, as they can view a record of the transactions made on the account at any time.

Encompass runs a managed bank account called Financial Administration Service (FAS). Your Direct Payment is paid into this account every four weeks. Invoices are then paid from this account that match the service delivered.

Buying Services from and agency or a provider

You can buy the support you need from any provider who is able to meet your needs. All care agencies and providers of residential respite care must be registered with the Care Quality Commission (CQC) and should be able to produce a Certificate of Registration.

The provider you use will produce an invoice in return for which you write a cheque or order a transfer from you Direct Payment prepaid account / bank account / managed account. You need to keep a copy of all invoices you receive for your records.

Recruiting a Personal Assistant

Encompass can give you advice and assistance with recruitment, including the drafting and placement of advertisements and the arrangement of interviews.

The reasonable cost of advertising is covered by your Direct Payments in the form of an initial set up payment.

Before employing anybody, you should obtain references from two people who know the applicant well. Encompass can help with this.

Encompass can help you obtain a Disclosure and Barring Service (DBS) check on any prospective employee.

Employing a Personal Assistant

You can employ someone from any country in the 'European Economic Area' without the need for a work permit but you must ensure that anyone you employ is legally entitled to work in the United Kingdom. You should ask to see relevant documentation and keep copies of it. Encompass can help you with this.

You can not employ any close relative or partner who lives with you without prior permission from Social Services, and then only in exceptional circumstances. Exceptional circumstances are only usually agreed where there is no other way of providing the required care.

Any offer of employment should be made in writing and subject to satisfactory references. Encompass can help with drafting an offer letter.

It's a good idea to include a probation period in any offer of employment. We recommend a trial period of 13 weeks.

Yes. It's best to draw up the job description before you offer someone the job - Encompass can help you with this

No later than eight weeks after starting work, the new recruit is entitled to receive a statement of main employment particulars. Encompass can help you with this.

Yes. You cannot ask someone to work more than the national working time regulations limit of 48 hours per week, unless they agree in writing to do so. Encompass can give you advice about this.

You must pay at least the national minimum wage per hour, before tax. The pay rates that Encompass recommends are higher than this and will be covered by your Direct Payments for the number of hours specified. Encompass can give you advice about this.

You need to take out employers' liability insurance. The cost of an appropriate policy is included in your Direct Payment and application forms are available from Encompass.

All employees are entitled to the pro rata equivalent of 20 days paid holiday a year. The cost of holiday pay, and of employing another PA to cover for holidays, is included in your Direct Payment. Encompass can help you to calculate how much holiday each of your employees is entitled to.

Your employees may be entitled to statutory sick pay or statutory maternity pay in the relevant circumstances. Contact Encompass for advice before you make any payment.

An amount of money for contingency cover should be included in your Direct Payment.

Pregnant employees have special legal rights. You cannot refuse someone a job or dismiss her just because she is pregnant. If one of your employees is or becomes pregnant, contact Encompass for advice.

All employees have legal rights relating to grievance and disciplinary procedures (including dismissal and redundancy procedures). If you fail to follow the correct procedure you could be taken to an employment tribunal and have to pay compensation. If you are faced with a potential grievance, disciplinary or redundancy situation you should contact Encompass for advice before taking any action.

You have all the legal obligations of any employer, except that you are not strictly bound by the Health and Safety at Work Act when employing someone in your own home, however, you remain bound by a general duty of care and should take our advice on this.

It is extremely unlikely that the Inland Revenue will regard people working regular hours for you as being self-employed. Any person wishing to be regarded as self-employed should be asked to produce written authority from the Inland Revenue that it is prepared to regard them as self-employed. Otherwise they must be treated as being directly employed by you.

Paying your Personal Assistant

No. You should not pay any worker in cash and it is against London Borough of Sutton's policy for you to do so. If this presents any problems, contact Encompass for advice.

Yes. Ask your Personal Assistant to complete a timesheet for all the hours they work (preferably on a weekly basis) and get them to sign it. You should keep a copy of these so that you can avoid disputes about hours worked.

You are liable to the Inland Revenue for deductions of any income tax and employee national insurance and for any employers national insurance contributions due. These deductions need to be held back from gross pay and paid to the Inland Revenue as required on a quarterly basis. The cost of tax and National Insurance contributions are included in your Direct Payments and Encompass can help you budget to cover these.

Yes. The payroll service will calculate the necessary deductions and print a payslip for you to give to your employees as is legally required. You must provide details of hours worked and pay rates, and of the employee's tax details by way of a P45 or a P46.

Yes. You can operate your own payroll.