Direct Payments for Children and Families – A Quick Reference Guide for Professionals

Introduction

This guidance has been produced as a quick reference resource for professionals working with Direct Payments. It covers various themes relevant to Local Authority administrative systems, including code of practice guidance and legislative requirements. By understanding and following these guidelines, professionals can ensure that Direct Payments are managed effectively, meeting the needs of children and young people while complying with statutory requirements. By providing a high level overview of policy, eligibility, and processes, this guidebook aims to support professionals in delivering high-quality, person-centred care and support to Children and Families.

Key Takeaways

• Empowerment: Direct Payments empower families by giving them control over their care and support.
• Flexibility: They offer flexibility to tailor services to individual needs and preferences.
• Compliance: Ensuring compliance with legal and regulatory frameworks is essential for effective implementation.
• Support: Ongoing support and guidance for families and professionals are crucial for successful management of Direct Payments.
• Continuous Improvement: Regular reviews, monitoring, and feedback contribute to continuous improvement in service delivery and outcomes.

Table of Contents

1. Overarching Principles: SEND Code of Practice
2. Personal Budget Policy
3. Direct Payments: Regulations and Usage
4. Eligibility and Decision-Making
5. Direct Payment Agreements
6. Appropriate and Inappropriate Use of Direct Payments
7. Monitoring and Reviewing Direct Payments
8. Stopping or Reducing Direct Payments
9. Special Considerations for Social Care Direct Payments
10. Legal Framework and Use of Discretion
11. Making Exceptions and Handling Appeals
12. Resources and Further Reading

1. Overarching Principles: SEND Code of Practice

Rights and Requests

Young people and parents of children with EHC plans have the right to request a Personal Budget, which may include elements of education, social care, and health funding. This right ensures that families can have more control and flexibility over the services they receive, tailored to their specific needs. A Personal Budget is a sum of money allocated to a young person or their family to meet the outcomes agreed in their Education, Health, and Care (EHC) plan.

Joint Commissioning Arrangements

Local Authorities and partners must set out joint commissioning arrangements for Personal Budgets. This includes developing a formal approach to making fair and equitable funding allocations and setting out a local policy for Personal Budgets. Joint commissioning is a collaborative approach that brings together education, health, and social care services to plan and fund support services, ensuring they are coherent, consistent, and responsive to the needs of children and young people.

Key Policy Elements

• Description of Services: The policy should describe the services available for Personal Budgets across education, health, and social care. This includes specifying what services can be purchased with Personal Budgets and any restrictions or exclusions.
• Funding Control Mechanisms: Mechanisms for controlling funding include: Direct Payments: Where individuals receive cash to manage services themselves. Arrangements by Local Authority: The Local Authority holds funds and commissions support. Third-Party Arrangements: Funds are managed by an individual or organisation on behalf of the child or young person. Combination of the Above: A mix of direct, notional, and third-party arrangements.
• Eligibility Criteria and Decision-Making Processes: Clear and simple statements on who is eligible and how decisions are made. Eligibility criteria should be transparent and based on assessed needs to ensure fairness and consistency in decision-making.

Legislative Context

Understanding the legislative context is essential for implementing Direct Payments effectively. Key pieces of legislation that underpin the SEND Code of Practice include:

• Children and Families Act 2014: This Act includes provisions for EHC plans and Personal Budgets.
• Care Act 2014: This Act outlines the duties of Local Authorities in relation to care and support for adults, which can include parents of children with SEND.

Collaborative Approach

The SEND Code of Practice emphasises a collaborative approach involving children, young people, families, and professionals from different sectors. Effective collaboration ensures that support is tailored to individual needs and that families are empowered to take an active role in decision-making.

Support and Advocacy

Providing support and advocacy for families is crucial in navigating the complexities of Personal Budgets and Direct Payments. Local Authorities should ensure that families have access to information, advice, and advocacy services to help them understand their rights and make informed choices.

2. Personal Budget Policy

Direct Payments Mechanism

Direct Payments are cash payments made directly to the child's parent, the young person, or their nominee. This allows them to arrange provision themselves, giving them greater control over their care and support. Direct Payments can cover a wide range of services, including personal care, therapies, equipment, and activities that promote well-being and independence.

Legislative Framework

Direct Payments for educational, health, and social care provision are regulated by:

• The Community Care Services for Carers and Children's Services (Direct Payments) Regulations 2009 (replaced by those made under the Care Act 2014)
• The National Health Service (Direct Payments) Regulations 2013
• The Special Educational Needs (Personal Budgets) Regulations 2014

Implementation in EHC Plans

Direct Payments should be detailed in section J of the EHC plan. Parents or young people can request Direct Payments during the drafting or review of the EHC plan. This ensures that the provision meets the specified needs and is adequately funded.

Flexibility and Personalisation

One of the key advantages of Direct Payments is the flexibility they offer. Families can tailor the support and services to meet their specific needs and preferences, leading to more personalised care. This can improve outcomes for children and young people by ensuring they receive the right support at the right time.

Local Policy Development

Local Authorities should develop comprehensive policies for Personal Budgets, detailing the processes for requesting, allocating, and managing these budgets. Policies should be developed in consultation with service users, ensuring they reflect the needs and preferences of the community.

Training and Support for Staff

To effectively implement Personal Budget policies, Local Authorities must provide training and support for staff. This includes understanding legislative requirements, assessing needs, developing EHC plans, and supporting families in managing Direct Payments.

3. Direct Payments: Regulations and Usage

Criteria for Direct Payments

Local Authorities must ensure:

• Appropriate Use of Funds: The funds must be used to secure the provision specified in the EHC plan.
• Best Interests: The recipient must use the funds in the best interests of the child or young person.
• Impact Consideration: Consider the impact on other commissioned services and value for money.

Funding Levels

Direct Payments must be sufficient to secure the provision specified in the EHC plan. If not, they must be reviewed and adjusted accordingly to ensure the needs are adequately met.

Use of Direct Payments in Education

Direct Payments can be used to fund educational support and services specified in the EHC plan. This might include specialist teaching, learning aids, or therapies that support the child’s educational development. However, Direct Payments cannot be used to fund a school place or core educational provision provided by the school.

Use of Direct Payments in Health

For health-related support, Direct Payments can cover services like physiotherapy, speech and language therapy, or nursing care, as specified in the EHC plan. These services should complement the child’s overall care and support plan, ensuring a holistic approach to their well-being.

Use of Direct Payments in Social Care

Direct Payments in social care can be used to arrange personal care, respite services, or social activities that enhance the child’s quality of life. They provide families with the flexibility to choose services that best meet their needs and preferences.

Managing Risk

Local Authorities must manage the risks associated with Direct Payments. This includes ensuring that funds are used appropriately, safeguarding against misuse, and supporting families in managing their budgets effectively. Risk management strategies should be included in the Personal Budget policy and communicated clearly to families.

4. Eligibility and Decision-Making

Who Can Receive Direct Payments?

Direct Payments can be made to:

• Parents of the Child: For children under 16, payments are typically made to a parent.
• The Young Person: For those over 16 who have the capacity to manage the payments.
• A Nominee: An individual chosen by the parent or young person to manage the payments on their behalf.

Conditions for Making Payments

Local Authorities may make Direct Payments if:

• Appropriate Use: They will secure the agreed provision appropriately.
• Best Interests: The recipient acts in the best interests of the child or young person.
• No Adverse Impact: Payments do not negatively affect other services.
• Efficient Use of Resources: The use of Direct Payments is resource-efficient.

Criminal Convictions

Individuals with certain criminal convictions, particularly those related to drugs or alcohol, may be prohibited from receiving Direct Payments.

Decision-Making Processes

Local Authorities must have clear and transparent decision-making processes for allocating Direct Payments. This includes:

• Assessment of Needs: A thorough assessment of the child’s needs to determine eligibility and the amount of funding required.
• Consultation with Families: Engaging with families to understand their needs and preferences.
• Approval and Review: Formal approval processes for Direct Payments and regular reviews to ensure they meet the child’s needs.

Appeals Process

If a request for Direct Payments is denied, families should have the right to appeal the decision. The appeals process should be clearly outlined in the Local Authority’s policy, ensuring transparency and fairness.

Capacity and Consent

For young people aged 16 and over, it is essential to assess their capacity to consent to and manage Direct Payments. This assessment should consider the young person’s ability to understand and manage their budget and make informed decisions about their care.

5. Direct Payment Agreements

Suggested Content

A Direct Payment agreement must include:

• Recipient Details: Name of the child or young person.
• Services: Goods or services to be secured.
• Payment Amount: The amount of Direct Payments.
• Conditions: Conditions on how payments may be spent and payment dates.

Recipient Responsibilities

Direct Payment Recipients must broadly agree to:

• Terms & Conditions: Adhere to the conditions specified in the agreement.
• Notification of Changes: Inform the Local Authority of any changes affecting the need for agreed provision.
• Use of Pre-paid Cards: Manage payments through pre-paid cards to ensure transparency and ease of monitoring.

Monitoring and Accountability

Local Authorities must ensure that recipients are accountable for the use of Direct Payments. This includes:

• Regular Reporting: Recipients should provide regular reports on how funds are spent.
• Receipts and Documentation: Keeping receipts and documentation to verify expenditures.
• Audits: Conducting periodic audits to ensure funds are used appropriately.

Support for Managing Payments

Local Authorities should ideally provide support to families in managing Direct Payments. This can include:

• Budgeting Advice: Helping families plan and manage their budget.
• Financial Management Support: Assistance with financial management and record-keeping.
• Training: Providing training on the use of pre-paid cards and managing Direct Payments.

Termination of Agreements

A Direct Payment agreement may be terminated if:

• Misuse of Funds: There is evidence of misuse of funds.
• Non-Compliance: The recipient fails to comply with the terms of the agreement.
• Changed Circumstances: The child’s or family’s circumstances change, affecting their eligibility for Direct Payments.

Transition Planning

For young people transitioning to adulthood, it is important to plan for the continued use of Direct Payments. This includes:

• Re-assessment: Re-assessing needs as the young person transitions to adult services.
• Coordination with Adult Services: Ensuring a smooth transition and continued support from adult services.
• Future Planning: Helping families plan for the future use of Direct Payments and any changes in funding or support.

6. Example Use of Direct Payments

Direct Payments may be used for a variety of support approaches such as:

• Short Breaks: Respite care for parents or carers, providing them with a break from their caring responsibilities.
• Employing Carers: Hiring personal assistants or carers to support the child or young person.
• Activities: After-school clubs, holiday activities, or other social activities that promote the child’s development and well-being.
• Sitter Services: Services that provide temporary care, allowing parents or carers to attend appointments or have time for themselves.
• Equipment: Additional equipment that supports the child's or young person's needs, such as mobility aids or sensory equipment.

Prohibited Uses

Direct Payments cannot be used for:

• Employing Household Members: Unless there are exceptional circumstances that apply.
• Educational Institutions: Funding school places or core educational provision provided by the school. Direct Payments should not replace statutory educational provision.
• Illegal Activities: Any activities or services that are illegal or not permitted under relevant regulations.
• Unapproved Services: Services that have not been approved as part of the EHC plan or do not meet the specified outcomes.

Flexibility in Use

While there are restrictions, Direct Payments offer flexibility in choosing services and support that best meet the child’s needs. Families should be encouraged to explore a range of options and use Direct Payments creatively to enhance the child’s quality of life.

Personalised Support

Direct Payments enable families to personalise the support they receive. This can lead to better outcomes for children and young people by providing tailored support that aligns with their preferences and needs.

Safeguarding and Quality Assurance

Local Authorities should ensure that services purchased with Direct Payments meet quality and safeguarding standards. This includes:

• Approved Providers: Ensuring services are provided by approved and reputable providers.
• Safeguarding Checks: Conducting necessary safeguarding checks, particularly for personal assistants and carers.
• Quality Monitoring: Regularly monitoring the quality of services to ensure they meet the required standards.

7. Monitoring and Reviewing Direct Payments

Local Authority Duties

Local Authorities must monitor and review the use of Direct Payments to ensure they are used appropriately:

• Initial Review: Ideally within the first six weeks (but no later than 3 months) of issuance to ensure the Direct Payments are being used correctly and meeting the intended outcomes.
• Ongoing Reviews: During regular reviews or reassessments of the EHC plan. These reviews should consider the effectiveness of the support provided and any changes in the child’s needs.

Adjusting Payments

If unused Direct Payments accumulate, Local Authorities may reduce future payments. They must provide reasonable notice and reasons for the reduction, ensuring transparency and fairness. Adjustments should be based on a thorough assessment of the child’s needs and any changes in their circumstances.

Regular Reporting

Recipients of Direct Payments should provide regular reports detailing how the funds are being used. This includes:

• Expenditure Reports: Detailing how the funds have been spent, including receipts and invoices.
• Progress Reports: Reporting on the progress towards achieving the outcomes specified in the EHC plan.

Audits

Local Authorities should conduct periodic audits of Direct Payments to ensure compliance with regulations and appropriate use of funds. Audits should be planned and conducted transparently, with clear communication to recipients about the process.

Support and Guidance

Providing ongoing support and guidance to families is helpful in ensuring the effective use of Direct Payments. Local Authorities ideally should offer:

• Regular Check-ins: Regular contact with families to provide support and address any issues.
• Financial Management Advice: Helping families manage their Direct Payments effectively.
• Training and Resources: Providing training and resources on managing Direct Payments and understanding their responsibilities.

Addressing Misuse

If misuse of Direct Payments is identified, Local Authorities should:

• Investigate Thoroughly: Conduct a thorough investigation to understand the extent and nature of the misuse.
• Provide Support: Offer support and guidance to correct any issues and ensure future compliance.
• Take Action: If necessary, take appropriate action, including reducing or stopping payments, and involve safeguarding services if required.

8. Stopping or Reducing Direct Payments

Grounds for Stopping Payments

Direct Payments can be stopped if:

• Consent Withdrawal: The recipient no longer consents to receive payments.
• Loss of Eligibility: The recipient is no longer eligible to receive payments, for example, if they move out of the area or their circumstances change significantly.
• Misuse of Funds: Funds are not used as agreed, indicating a breach of the Direct Payment agreement.
• Adverse Impact: Payments adversely impact other services or are no longer efficient.

Reconsideration Process

Local Authorities must reconsider decisions to stop payments upon request. They must consider representations made by the recipient and provide written reasons for their final decision. This ensures transparency and fairness in decision-making.

Notice of Termination

If a decision is made to stop Direct Payments, the Local Authority must provide reasonable notice to the recipient. This notice should include:

• Reasons for Termination: Clear and detailed reasons for the decision.
• Reconsideration Rights: Information on the recipient’s right to request a reconsideration.
• Transition Support: Details of any support available to help the recipient transition to alternative arrangements.

Reducing Payments

If it is necessary to reduce Direct Payments, the Local Authority must provide:

• Notice of Reduction: Reasonable notice and clear reasons for the reduction.
• Support: Support to manage the reduction and ensure that the recipient’s needs are still met.
• Review: Regular reviews to assess the impact of the reduction and make further adjustments if needed.

Appeals Process

Recipients should have the right to appeal decisions to stop or reduce Direct Payments. The appeals process should be clearly outlined in the Local Authority’s policy, ensuring it is accessible and fair. This process may include:

• Initial Appeal: An internal review of the decision by the Local Authority.
• Independent Review: If necessary, an independent review or involvement of an external body to ensure impartiality.

Ensuring Continuity of Support

When stopping or reducing Direct Payments, Local Authorities must ensure continuity of support for the child or young person. This includes:

• Alternative Arrangements: Arranging alternative support services to replace those funded by Direct Payments.
• Transition Planning: Providing a clear transition plan to minimise disruption to the child’s care and support.

Communication and Support

Clear communication and ongoing support are essential during the process of stopping or reducing Direct Payments. Local Authorities should:

• Engage with Families: Engage with families to understand their concerns and needs.
• Provide Information: Offer clear and comprehensive information about the process and available support.
• Support Services: Ensure access to support services and advocacy to help families navigate the changes.

9. Special Considerations for Social Care Direct Payments

Children Under 18

Local Authorities are obligated to offer Direct Payments as an alternative to Local Authority services for disabled children under section 17 of the Children Act 1989. These payments can be used to arrange personal care, respite services, or social activities that enhance the child’s quality of life.

For Young People Aged 16-17

Direct Payments can be made directly to eligible young people if they are competent to manage their care. They can choose services independently, unless they notify the Local Authority in writing of their refusal to consent. This empowers young people to take control of their care and make decisions that best meet their needs.

Transition to Adult Services

As young people approach adulthood, it is crucial to plan for their transition to adult services. This includes:

• Re-assessment of Needs: A thorough re-assessment of needs to ensure continued support.
• Coordination with Adult Services: Ensuring seamless coordination with adult services to provide continuity of care.
• Future Planning: Helping young people and their families plan for the future use of Direct Payments and any changes in funding or support.

Parental Responsibilities

Parents of disabled children under 16 are typically responsible for managing Direct Payments. This includes:

• Budget Management: Managing the budget and ensuring funds are used appropriately.
• Hiring Carers: Employing carers or personal assistants to support their child.
• Reporting: Providing regular reports and documentation to the Local Authority.

Support for Parents

Local Authorities should provide support to parents managing Direct Payments. This can include:

• Training: Training on financial management and record-keeping.
• Guidance: Providing clear guidance on the appropriate use of funds.
• Resources: Offering resources and tools to help parents manage Direct Payments effectively.

Safeguarding and Quality Assurance

Ensuring the safety and quality of services purchased with Direct Payments is a priority. Local Authorities should ideally:

• Conduct Safeguarding Checks: Perform necessary safeguarding checks on carers and personal assistants.
• Monitor Quality: Regularly monitor the quality of services to ensure they meet the required standards.
• Provide Support: Offer support to families in identifying and addressing any concerns about the quality of care.

10. Legal Framework and Use of Discretion

Exercising Discretion

Policies should be applied flexibly, allowing for individual case consideration. Exceptions should be made rationally, without setting legal precedents. This ensures that policies are applied fairly and appropriately to meet the unique needs of each child or young person.

Public Law Principles

Decisions regarding Direct Payments must adhere to public law principles. These include:

• Rationality: Decisions must be rational and based on relevant evidence.
• Lawfulness: Decisions must comply with relevant laws and regulations.
• Fairness: Processes must be fair and transparent, allowing for consultation and appeals.

Use of Discretion in Direct Payments

Local Authorities should exercise discretion in the use of Direct Payments, considering:

• Individual Needs: Tailoring decisions to the unique needs and circumstances of each child or young person.
• Resource Availability: Balancing the needs of the individual with the efficient use of resources.
• Impact on Services: Considering the broader impact on services and other service users.

11. Making Exceptions and Handling Appeals

Making Exceptions

Exceptions to policies should be made rationally and not as knee-jerk reactions. They do not set legal precedents but indicate flexibility and responsiveness to unique situations. Making exceptions involves:

• Case-by-Case Assessment: Assessing each case individually to determine the need for an exception.
• Rationale for Exception: Providing a clear rationale for the exception, based on evidence and individual circumstances.
• Documentation: Documenting the decision-making process and rationale for the exception.

Handling Appeals

Families have the right to appeal decisions regarding Direct Payments. The appeals process should be clearly outlined in the Local Authority’s policy, ensuring it is accessible and fair. This process may include:

• Initial Appeal: An internal review of the decision by the Local Authority.
• Independent Review: If necessary, an independent review or involvement of an external body to ensure impartiality.

Example Process for Appeals

1. Notification: Families should be informed of their right to appeal and the process for doing so.
2. Submission of Appeal: Families submit an appeal in writing, outlining their reasons and any supporting evidence.
3. Review: The Local Authority reviews the appeal, considering all relevant information and evidence.
4. Decision: A decision is made, and the family is informed in writing, including reasons for the decision and any further steps.

Supporting Families in Appeals

Local Authorities should support families through the appeals process by:

• Providing Information: Offering clear information about the appeals process and their rights.
• Assistance: Providing assistance in preparing and submitting appeals.
• Advocacy Services: Ensuring access to advocacy services to help families navigate the process.

Learning from Appeals

Appeals can provide valuable insights into policy and practice. Local Authorities should:

• Review Policies: Regularly review policies and procedures in light of appeal outcomes.
• Identify Trends: Identify trends and common issues raised in appeals to inform improvements.
• Continuous Improvement: Use feedback from appeals to drive continuous improvement in service delivery and decision-making.

Making Exceptions - Legal Considerations

When making exceptions, Local Authorities must consider:

• Legal Framework: Ensuring decisions comply with relevant legislation and regulations.
• Public Law Principles: Adhering to principles of rationality, lawfulness, and fairness.
• Consultation: Engaging with families and other stakeholders in the decision-making process.

Precedents and Flexibility

While making exceptions does not set legal precedents, it demonstrates the Local Authority's commitment to flexibility and responsiveness. This can build trust with families and ensure that policies are applied in a way that meets individual needs.

12. Resources and Further Reading

Legislation

• Children Act 1989: Sets out the duties of Local Authorities to safeguard and promote the welfare of children.
• Care Act 2014: Outlines the duties of Local Authorities in relation to care and support for adults.
• Children and Families Act 2014: Includes provisions for EHC plans and Personal Budgets.
• The Community Care Services for Carers and Children's Services (Direct Payments) Regulations 2009: Regulations governing Direct Payments for carers and children's services.
• The National Health Service (Direct Payments) Regulations 2013: Regulations governing Direct Payments for health services.
• The Special Educational Needs (Personal Budgets) Regulations 2014: Regulations governing Personal Budgets for special educational needs.

Guidance

• SEND Code of Practice: Statutory guidance for organisations working with children and young people with special educational needs and disabilities.

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