Direct payments and personal budgets: how they work and what to do if the money is too low

In short: Your personal budget is the money it costs to meet your care needs, and it must be enough. You can ask for it as a direct payment to choose your own agency or PA. Here is how it works, and what to do if the money is too low.

A form lying next to banknotes and coins.

In short

If the council is meeting your care needs, you must get a personal budget. This is the amount of money it costs to meet your needs, and it must be enough to meet them.
You can ask for some or all of the council's share as a direct payment. You then choose your own care, such as an agency or a personal assistant (PA). Nobody can make you take a direct payment.
If the budget will not buy the care in your plan, you can ask for a review, make a complaint, get an advocate, and then go to the Ombudsman. You should not feel pushed into paying extra.

Urgent? If someone is in danger or very unwell, call 999. For urgent medical help, call NHS 111 or contact your GP. This page cannot give medical or personal advice.

After a care needs assessment, the council decides which of your needs are eligible. If it is going to meet them, it writes a care and support plan with you. Your personal budget is part of that plan. This page explains the personal budget, direct payments, and what you can do if the money does not seem enough. It covers England.

What a personal budget is

A personal budget is a statement in your care and support plan. By law it must show (Care Act 2014, section 26):

what it costs the council to meet your needs
how much of that you must pay, based on your financial assessment
how much the council will pay

Everyone whose needs the council is meeting must get a personal budget. (Care and Support Statutory Guidance, 11.7) The guidance says you should be told an early, rough figure at the start of care planning, so you can plan. The council must also be open about how it worked out your final amount. (Statutory Guidance, 11.7 and 11.24)

The most important rule. The guidance says: "The personal budget must always be an amount sufficient to meet the person's care and support needs". (Statutory Guidance, 11.10) Councils must not use fixed limits that force people into a care home when they want to stay at home. (Statutory Guidance, 11.22)

Three ways to use your budget

You can choose how your personal budget is used. You can also mix them. (Statutory Guidance, 11.30 and 11.31)

The council arranges your care. It chooses and pays the care provider for you, in line with your wishes.
A provider holds the money for you. This is called an individual service fund. A care provider of your choice manages the money and arranges your care with you.
A direct payment. The council pays money to you, or to someone you choose, so you can arrange your own care.

If you have savings over the limit

If your savings are over the upper limit, you will usually pay the full cost of your care. If your care is going to be at home, you can still ask the council to meet your needs and arrange your care. (Care Act 2014, section 18(3)) The council can charge you an arrangement fee for this. That fee is not part of your personal budget. (Statutory Guidance, 11.13)

The official guidance says that if you ask the council to meet your needs at home, and you are paying the full cost, the council can arrange your care, make a direct payment, or both. Because you pay the full cost, a direct payment "may be a paper based exercise". (Care and Support Statutory Guidance, paragraph 8.63)

In practice, many councils do not offer direct payments to people who are paying for all of their own care. They often say you can pay care providers directly instead. If you have asked the council to meet your needs and it refuses a direct payment, you can ask for the reason in writing and use the council's complaints process. (Statutory Guidance, 12.18 and 12.22) Many people who pay in full find it simpler to choose and pay an agency or personal assistant themselves. Ask your council what it does, and what any fees are, before you decide.

What a direct payment is

A direct payment is money from the council, paid to you or to a person you choose, to pay for the care in your plan. You can ask for one if the council is paying some or all of your personal budget. The council must agree if all of these are true (Care Act 2014, section 31):

You are able to make the decision to ask for it. If you want someone else to receive it for you, they must agree.
The rules do not stop you from having one.
You can manage it, on your own or with whatever help is available to you.
It is a suitable way to meet your needs.

The guidance says the council must not use "suitable" as an excuse to refuse without good reason. In general, direct payments are suitable for most needs. (Statutory Guidance, 12.19) One group the rules do exclude is some people on court orders for drug or alcohol treatment. (Statutory Guidance, 12.20)

You can ask at any time. It does not have to be when your plan is first made. (Statutory Guidance, 12.10)
The council must tell you which of your needs could be met by direct payments. (Care Act 2014, section 24(1))
You can say no. Nobody can be made to take a direct payment. If you do not want one, the council must arrange your care instead. (Statutory Guidance, 12.5 and 12.9)
If the council says no, it should tell you why in writing and explain how to complain. It must still make sure your needs are met in the meantime. (Statutory Guidance, 12.18 and 12.22)

If the person cannot decide for themselves

If someone lacks the mental capacity to ask for a direct payment, another person can ask for them. This is called an "authorised person". It could be an attorney or deputy, or someone else the council thinks is suitable, such as a family member or friend. They must act in the person's best interests. (Care Act 2014, section 32)

What you can spend it on

A direct payment can only be used to pay for the needs in your care and support plan. (Care Act 2014, section 33(3)) Within that, the guidance says there should be no unreasonable limits on how you use it. (Statutory Guidance, 12.35) You could pay for:

A care agency. You pick the agency. Agencies must be registered with the Care Quality Commission (CQC), so you can check their rating first.
A personal assistant (PA). This is a carer you employ yourself, or a self-employed carer.
A family member who does not live with you. See the rules below.
Short stays in a care home. Up to 4 weeks in a row in any 12 months. Direct payments cannot usually pay for living in a care home long-term. (Care and Support (Direct Payments) Regulations 2014, regulation 6)

Paying a family member

The rules say a direct payment usually cannot be used to pay (Direct Payments Regulations 2014, regulation 3):

your husband, wife, civil partner, or a partner you live with as a couple
a close relative who lives in the same household as you, such as a parent, son or daughter, brother or sister, aunt or uncle, grandparent, in-law or step-child, or their husband, wife or partner

The council can allow it if it decides this is necessary. That can be to provide care, or to help manage the direct payment paperwork. (Statutory Guidance, 12.36 and 12.37) If your relative does not live with you, these limits do not apply. (Age UK factsheet 24)

If you employ a PA

If you employ a PA, you become their employer. That brings legal duties. The guidance lists some of them (Statutory Guidance, 12.48 to 12.51):

registering with HMRC as an employer and running PAYE (tax and National Insurance)
paying at least the National Minimum Wage
a workplace pension, where the rules apply
employer's liability insurance

Your direct payment should cover the real costs of being an employer. This includes things like employer's National Insurance, recruitment, insurance, and redundancy pay if a job ends. (Statutory Guidance, 12.27, 12.29 and 12.33) You should also have a back-up plan for when your PA is ill or on holiday. (Statutory Guidance, 12.28)

You do not have to do it alone. The council should help you manage your direct payment, and many councils pay a local support service to do this. (Statutory Guidance, 12.21) Some support services can run payroll for you. Free guides include the Skills for Care Employing PAs toolkit and Disability Rights UK: getting personal assistants.

If you would rather not be an employer, you can use your direct payment to pay an agency instead.

When the money does not seem enough

Many personal budgets are worked out using the council's own standard rates. These may be the hourly rate it pays its main care agencies, or a set rate for PAs. Some agencies charge more than this. Families are then sometimes told they must pay the difference to use the agency they want.

Here is what the official guidance says:

The budget must be enough to meet your needs. (11.10)
It should reflect the cost of good quality care in your local area. The guidance directly answers the worry that budgets based on the council's bulk-buying rates are too low to buy care with a direct payment. (11.25)
Asking for a direct payment does not mean there is no limit. If the council can arrange care that meets the same needs just as well for less, it may arrange that care instead of paying a higher price. (11.26 and 11.27) If you choose care that costs more than that, you may be asked to pay the extra. (11.14)
Decisions should be based on what works for you and value for money, not just cost. (11.27)

So the key question is simple. Can the care in your plan actually be bought locally for this amount? Paying extra should be your free choice, not the only way to get the care you need. If no agency or PA near you will provide it at the council's rate, the budget may not be enough. You have the right to challenge it. (11.24)

What you can do

Ask how the amount was worked out. Ask in writing for how the council got to your figure, and what rate it used. The council must be open about this. (11.24)
Keep evidence. Write down which agencies or PAs you contacted, what they charge, and who said no. Note dates.
Ask the council to show you care at that price. If it says care is available for the amount, ask who provides it and whether they can start.
Ask for a review. The council must review your plan if you make a reasonable request. (Care Act 2014, section 27) Also check your assessment lists all your needs. A budget can only be enough if all your needs are counted.
Get an advocate if you need one. If you would find it very hard to take part, and no family or friend can help, the council must give you an independent advocate. (Care Act 2014, section 67)
Make a complaint. Use the council's complaints process. You can use our free complaint letter.
Go to the Ombudsman. The Local Government and Social Care Ombudsman is free. You usually need to finish the council's complaints process first. You can also go to them if the council has not replied within a reasonable time, which they say is usually up to 16 weeks. They cannot normally look at a complaint if more than 12 months have passed since you first knew about the problem.
Get free legal advice if things are serious. A Law Centre may be able to help, or see GOV.UK: find legal advice.

Stay calm and polite, and keep to the facts. You do not have to agree to anything on the spot, even if a manager presses you. It is fine to say, "I'd like that in writing, please, and time to think about it."

A short letter to question your budget

[Your name] [Your address] [Date] Adult Social Care [Council name and address] Dear Sir or Madam, Personal budget for [me / name, date of birth] I do not think my personal budget is enough to meet the eligible needs in my care and support plan. The budget is [amount] a week, based on [hours] hours at [rate] an hour. I have contacted these providers, and none can provide the care at this rate: - [agency or PA name, what they charge, date] - [agency or PA name, what they charge, date] The statutory guidance says a personal budget must be sufficient to meet my needs (paragraph 11.10) and should reflect the cost of local quality care (paragraph 11.25). Please: - explain in writing how my budget was worked out - tell me which providers can meet my needs for this amount, or - review my plan and budget under section 27 of the Care Act 2014. Please reply to [phone number] or [email]. Yours faithfully, [Your name]

Checks, reviews and unused money

Reviews. The council must review how your direct payment is working within the first 6 months, and then at least every 12 months. (Direct Payments Regulations 2014, regulation 7)
Records. You will usually need to keep receipts and use a separate bank account or a pre-paid card. The guidance says checks should be proportionate, and a pre-paid card should not be the only option. (Statutory Guidance, 12.24 and 12.58 to 12.59)
Unused money. If the money is not used for the needs in your plan, the council can ask for some or all of it back. (Care Act 2014, section 33(5)) Many councils let you keep a set reserve and ask for anything above it back. For example, Wandsworth allows up to 8 weeks. Check your own direct payment agreement. The council should look at your situation and give you a chance to explain first. In a 2025 case, Lancashire County Council accepted that a blanket rule taking back any money over 4 weeks was unlawful. (CASCAIDR: Dunn v Lancashire consent order)
Going into hospital. A direct payment should not be stopped just because you go into hospital. (Statutory Guidance, 12.52)

Stopping a direct payment

You can stop at any time. The council should then review your plan and arrange your care another way. (Statutory Guidance, 12.69) If you employ a PA, get advice before you end their job.
The council can stop it if the conditions are no longer met, or if a condition is broken. (Care Act 2014, section 33(4) and (5)) The guidance says this should be a last resort. You should usually get notice, and there must be no gap in your care. (Statutory Guidance, 12.67, 12.68, 12.80 and 12.81)

Examples

Example A man who wanted the same carer every day. He asked for a direct payment and employed a PA he trusted. A local support service set up his payroll and insurance. His budget included money for holiday pay and employer's National Insurance.

Example A family told to top up. Their mum's budget was based on the council's agency rate. The three agencies they rang all charged more, and none had space at the council's rate. They wrote down each reply and asked the council for a review. The council looked again and raised the budget.

These are made-up examples to show how things can work. They are not real people. Every case is different.

In Scotland, Wales and Northern Ireland the rules are different. Contact your local council, or your Health and Social Care Trust in Northern Ireland. See nidirect: direct payments.

Free help

Your council. Ask adult social care about direct payments and its direct payment support service. Use our find your council tool if you need the details.
Disability Rights UK Personal Budgets Helpline: 0330 995 0404, Tuesdays and Thursdays, 9:30am to 1pm, or email personalbudgets@disabilityrightsuk.org.
Age UK: personal budgets and direct payments. The free Age UK Advice Line is 0800 678 1602, 8am to 7pm, every day of the year.
Citizens Advice: how to contact them. Adviceline (England) 0800 144 8848.
Carers UK: direct payments, if you look after someone
GOV.UK: apply for direct payments
The official rules: Statutory Guidance chapter 11, personal budgets and chapter 12, direct payments (GOV.UK), and the Care and Support (Direct Payments) Regulations 2014 (legislation.gov.uk)

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Information only. This page explains official guidance in plain English. It is not legal or medical advice. Rules can change. For advice about your own case, contact Citizens Advice or another free adviser.

Where this applies: England. Scotland, Wales and Northern Ireland have different rules.

Written by Social Care Made Easy. Last checked: 30 October 2026.