Personal budgets and direct payments

A personal budget is an amount of money given to you to pay for any care services you need.

The amount is worked out after your social care assessment has found out what help you need, a support plan has been written and your financial assessment has identified if you are eligible for help.

Having a personal budget gives you more choice and control over the support you receive to help you live independently. It allows you to:

  • Control the money you get for support
  • Choose how to spend the money
  • Make choices about your life, such as which organisation you want to provide services.

How will I get the money?

You can choose to receive your personal budget in a number of ways:

  • As a direct payment - the most choice and control as your personal budget is paid directly into your bank account (there are some exclusions for people with certain mental health conditions)
  • As a supported personal budget - if you feel you cannot manage the money yourself, it may still be possible to have a direct payment paid to appropriate suitable person (e.g. family, your carer, friend or neighbour) for them to manage the money on your behalf 
  • As a council arranged personal budget - your money and services are managed by the council with either a supported personal budget or a council arranged personal budget.
Advantages and disadvantages of personal budgets and direct payments
Use of personal budgetWhat does it mean?AdvantagesDisadvantages
Direct payments Your personal budget is paid directly into a bank account and you manage the money yourself. You are in charge of your money and have more choices about how and where you spend it to meet your outcomes (as agreed in your support plan). You can employ your own staff. You will need to keep a record of how you spend the money and if you employ your own staff you will also have responsibilities of being an employer. 
Direct payments managed by a suitable person A trusted friend, family member or suitable person opens a bank account for your personal budget and supports you to manage the money.  You get help to manage your money and still retain a lot of control over where you can spend your money.  You will need to find someone you trust to take on this role. If you want to employ staff this person will become the employer and will have employer responsibilities.
Supported personal budget A social care officer will work with you to purchase services on your behalf and these are paid from your personal budget.  This could include setting up an Individual Service Fund with a provider who will deliver their service flexibly (i.e. service may differ each week according to your needs). Your social care officer makes the arrangements with the provider for you. However, if an Individual Service Fund has been set up, you will agree the flexible services with the provider yourself. You have less choice and control because we can only purchase support from providers known to the council. You cannot employ your own staff.
Council arranged personal budget A social care officer arranges services on your behalf with council approved providers. A social care officer arranges services on your behalf with council approved providers. You may not have a choice over which provider is arranged for you and you are limited to providers that are council approved. 

What can I spend the money on?

You use the money to arrange care, services or equipment that have been agreed in your support plan.

Many people who get direct payments employ personal assistants and they use the money to pay wages, National Insurance and holiday pay.


There are some restrictions on how you use the money. You can’t use your direct payments for things such as:

  • Health care, education, housing costs or household bills
  • Permanent residential care (although you can use them for respite or short term breaks if this is part of your support plan)
  • Employing your relatives (if they live with you), or anyone else who would normally live in your household.

Can someone help me with all this?

We have an in-house Direct Payments Team who can offer support to individuals that choose a Direct Payment.

If you are in the process of setting up a new direct payment, your allocated Direct Payments Advisor will assist you with any queries you may have. This assistance will end once you are up and running.

For any queries following this, a Duty Direct Payments Advisor is available Monday to Friday 9am to 5pm on 01942 489579.

The Direct Payments Team can help you with:

  • Paperwork – You will have to keep a record of how you spend the money, but we will provide you with sample forms which have been designed to be clear and straightforward
  • Choosing an agency – You can choose the care agency you like most
  • Payroll service – If you employ a personal assistant, they may have to pay tax and National Insurance on their wages. The payroll service can work this out for you and send you a payslip so you know how much to pay your assistant. Some people may want to learn how to do this themselves
  • Employer and Public Liability Insurance – If you employ someone, you must have this insurance. This is paid for from your personal budget and your Direct Payments Advisor will tell you how to arrange it
  • Personal assistant queries – Your Employer and Public Liability insurance provider will assist you with any difficulties or queries you may have regarding your personal assistant
  • Recruiting a personal assistant –  Wigan and Leigh Embrace (external link) can assist people who decide to employ their own carers/personal assistants. They can help you to advertise, interview, prepare a job description, take up references and arrange for a police check.

Direct payments

If you choose to start direct payments and decide it’s not for you, it’s no problem just ask your social care worker to arrange care services for you instead using your personal budget.

The payments need to be paid into a specific direct payment bank account. You can either:

  • Open a separate bank account (needs to be a current account) for your direct payments to be paid into (not required for equipment or one-off payments) or,
  • Ask your Direct Payment Advisor for information regarding a managed account. This means an organisation will receive the direct payment funds on your behalf. You then tell the organisation how you want the funds to be spent (if you choose to employ personal assistants you will still be their employer).

The council has a duty to make sure that direct payments are being spent correctly, so we will carry out checks on a regular basis. We will arrange to visit you or ask you to send in your paperwork, timesheets, bank statements, etc. It also gives us the chance to discuss with you how the scheme is working for you, and help with any problems you may have.

If you choose direct payments for equipment, just keep your receipts.

© Wigan Council