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Managing direct payments

With the choice and flexibility offered by direct payments, there are also responsibilities.

The key principle is that day-to-day control of the money and provision of your support is given to you, the service user, so that you have more choice and independence. As you know your own needs best, you can decide how to spend the money you receive to arrange support that best suits your lifestyle.

With a direct payment:

You choose who provides your support, and

You control when you receive your support.

We provide a payment directly to you so that you can arrange and purchase your own support. In some cases the payment can be made to someone else to manage on your behalf.

You are in charge of administering the money and keeping records to show it has been spent in the right way. However, you can have help with doing this from a friend or relative.

If you choose to employ someone as a personal assistant, you have all the usual responsibilities of an employer. However help is available with this.

What are the options for someone who cannot manage a direct payment themselves?

Some people who are eligible to have a direct payment would not be able to manage the financial and contractual arrangements themselves. Some reasons for this may be:

  • they do not have the mental capacity to do so (perhaps because of a learning disability or dementia)
  • they need additional support with the paperwork
  • they are not able to open a bank account
  • they are very ill.

The following options are available to enable such people to use a direct payment and remain in control of the support they receive:

Indirect payments

This is a direct payment paid into the bank account of a relative or friend of the person using the payment. However the person for whom the payment is made must be the legal employer of any personal assistant. The person who receives the payment must administer the account in the best interests of the person who receives support, in the same way that a regular direct payment user would have to do and can use all the support services available to people receiving a regular direct payment.

Direct payment to a suitable person

This works like an 'indirect payment' but is used when the person for whom the payment is made lacks capacity (as defined by the Mental Capacity Act 2005). In most cases the suitable person will be a family member or close friend already involved in the care of the service user. The suitable person will be the legal employer of any personal assistant.

Managed accounts

Compass Independent Living can provide a managed account on behalf of the person using the direct payment. This means that they hold the payment on that person's behalf, pay all necessary agreed outgoings and provide regular statements.

While anyone can start off by using a managed account, our Direct Payments Team will provide help, support and encouragement for those who would like to be able to manage their direct payments themselves in time. However, those who cannot manage without support will be able to continue with a managed account.

Independent living trust funds

These funds can be set up on behalf of someone who does not have mental capacity. The direct payment is made to a group of people (at least three) acting on behalf of the person using the direct payment. These trustees would have the same responsibilities for administering and accounting for the payment that a regular direct payment user would have.


If you are considering any of these options, the Direct Payments Team can give you more information and can discuss with you and your family exactly what is involved.

What if my needs change?

If your needs change, you may be able to change your direct payment. If you find that direct payments turn out not to be right for you after all, you can switch to having services provided by Social Services.


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Last modified on 25 May 2024