London Borough of Sutton Direct Payment Policy

London Borough of Sutton - Direct Payments Policy v1.0

1. Relevant Legislation

1.1. The legislation that permits Direct Payments is:- 

• The Care Act 2014,

• Care and Support (Direct Payment) Regulations 2014,

• Care and Support Statutory Guidance 2014 (including subsequent updates)

• Children’s Act 1989,

• Children and Families Act 2014

2.    What is a Direct Payment?

2.1.  Direct Payments are a flexible solution to meeting assessed needs and most clients have the legal right to receive Direct Payments instead of services commissioned by the Council.

2.2.  Direct Payments can assist in improving the quality of life for people who manage their own support by promoting independence, facilitating social inclusion and offering opportunities for rehabilitation, education, leisure and employment.

2.3. The cash alternative provided by Direct Payments allows individuals to decide how their needs will be met, by whom and at what time, thus putting the individual in control.  They provide clients with greater flexibility when deciding how best to meet their care and support needs, allowing people to be creative and enhancing their self-esteem.

2.4. The London Borough of Sutton has a duty to make Direct Payments.

3.    Support Planning Process (How is a Direct Payment Calculated)

3.1. The support plan agreed by the client and their social care practitioner identifies the help and assistance required to meet the client’s assessed eligible needs.

3.2. The support plan should catalogue the services to be provided and the outcomes to be met regardless of whether the Council directly commissions the support or whether the individual requests a Direct Payment to purchase their own support.

3.3. Contingency arrangements should be identified and costed within the personal budget agreed in the client’s support plan.

3.4.  A personal budget is the amount of money that the local authority has calculated that it will cost to meet the client’s agreed support needs.  The personal budget will include the client’s contribution.

3.5.  The client’s contribution is the amount of money that the client is required to pay towards their personal budget. The client will be financially assessed to determine how much they are able to pay towards their support.  The Council will then provide the remainder of the personal budget required to meet the agreed support needs.

3.6. If during the assessment with a social care practitioner it is agreed that the client will need assistance to manage their Direct Payment then an amount to cover the cost of that support will be added to the client’s personal budget.  If the client agrees then a referral will also be made to the Financial Administrative Service at Encompass for them to provide that support.

4.    Who can request a Direct Payment?

4.1. The client or a person acting on the client’s behalf can request a Direct Payment. Carers are also entitled to receive a Direct Payment if a needs-led assessment with a social care practitioner identifies that they have agreed eligible needs.

4.2. In order to request a Direct Payment the person making the request has to understand what a Direct Payment is, what the Direct Payment can be used for and must understand the agreement that they will need to sign.  If necessary a Mental Capacity Assessment will be carried out to decide whether the client has the capacity to make these decisions.

4.3. If a client doesn’t have capacity an authorised person can act on their behalf.  For matters relating to Direct Payments an authorised person is someone who holds Lasting Power of Attorney for Health and Welfare or who has been appointed by the Court of Protection as Deputy for Health and Welfare for the person who lacks capacity.

4.4. A client or an authorised person can also nominate someone to help them manage the Direct Payment.  Where a person is nominated both the nominated person and the authorised person (the client, or their power of attorney/Deputy for Health and Wellbeing) will need to sign the contract (see “Direct Payment Agreement”).

4.5. In cases where the client has lost capacity and there is no authorised person LBS is able to appoint a responsible person to control the Direct Payment on the client’s behalf if certain conditions are met.

4.6. In these cases the Council will conduct a Best Interest Assessment to determine if a Direct Payment is the best option for the client and would then approach a suitable person (usually be a relative or friend of the client for whom the Direct Payment is to be paid) to ask if they would be willing to manage the Direct Payment on behalf of the client.

4.7. The Direct Payment will not be put in place until all the appropriate checks and paperwork are complete.  In some cases it may not be possible for the Council to agree a responsible or suitable person and in these cases that client will be provided with directly commissioned services.

4.8. If a client loses capacity whilst they are receiving a Direct Payment the Council will check if there is an authorised person who can manage it (with or without support).  If there isn’t an authorised person the Council will carry out a Best Interests Assessment to decide if the Direct Payment should be replaced with commissioned services or if the Direct Payment should continue and whether there is a suitable person to manage it.

4.9. If there is someone who is potentially suitable to manage the Direct Payment the Council will conduct the same checks that they would if the Direct Payment was being set up for the first time.

5.    People not entitled to a Direct Payment

5.1. A client in any of the groups of people identified in regulations and/or the Statutory Guidance (see Appendix A) as not being eligible for a Direct Payment will not be offered and cannot receive a Direct Payment.

5.2. Anyone with an unpaid debt to London Borough of Sutton (not including debts relating to invoices that are yet to reach the date they are due to be paid by) will be refused a Direct Payment.  Any authorised or nominated person, or person with parental responsibility who is in debt to the London Borough of Sutton will not be able to have or manage a Direct Payment.

5.3. If a request for a Direct Payment is refused the client/their authorised person will receive a written explanation of why the request has been refused and will be provided with details of how to lodge an appeal against that decision.

6.    What can a Direct Payment be used to purchase?

6.1. A Direct Payment must only be used to purchase care and support that meets the needs and outcomes identified and agreed in the client’s support plan. This will usually be personal care, social inclusion, respite care, after school clubs and to generally support and maintain the client’s wellbeing.

6.2. Where a personal assistant is to be employed then the client is an employer and must ensure that all legal requirements are met.  Advice and support regarding these requirements is available from Encompass and other sources.

7.    How a Direct Payment cannot be spent

7.1.  Direct Payments paid by Adult Social Care cannot be used to pay for:-

• Services that should be provided or funded by Health,

• Gambling,

• Drugs, alcohol, tobacco, vaping fluids (“e-liquids”) or psychoactive substances,

• Utilities,

• Food,

• Council Tax,

• Rent or mortgage payments

7.2. Direct Payments can be used for respite in a care home but cannot be used for long stays in care homes.  Specifically Direct Payments cannot be used to pay for a continuous stay of more than 4 weeks or for more than 8 weeks of residential care in any 12 month period.

7.3. Sequences of residential care separated by short breaks might still count as continuous.  Regulations specify that if two separate stays occur within 4 weeks of each other they are counted as continuous.  If there is a gap of less than 4 weeks between two stays their durations should be added together.  If that total exceeds 4 weeks then Direct Payments cannot be used to purchase further residential care in that 12 month period.

8.    Client Contributions

8.1. The client’s contribution is the amount that they are financially assessed as being able to pay towards the weekly cost of their care.

8.2. The financial assessment is the process and mechanism used to calculate a client’s ability to pay towards the weekly cost of their services.

8.3. LBS always pays Direct Payments nett of the client’s contribution.  Where the client has been financially assessed as not able to contribute then the whole cost of the amount identified in the personal budget (excluding any funding from third parties) will be paid by the Council.

8.4. Where a client has sufficient funds or income to purchase all of their identified support then they will not be provided with any financial assistance from the Council.  This means that these clients will not be able to receive a Direct Payment (other than as a paper-based exercise).  These clients can choose to organise their care privately or ask the Council to commission care on their behalf and invoice them for the costs.

8.5. Where clients are in receipt of a mixed package of care (i.e. with some support met via a Direct Payment as well as receiving directly commissioned services) their assessed contribution will always be offset against the Direct Payment amount in the first instance.  They will then be invoiced for any remaining contribution.  In this scenario a client with a large assessed contribution may not receive a Direct Payment at all but may need to use their contribution to pay for this part of their support.

8.6. Regardless of the type of Direct Payment all clients are required to pay their contributions into the account that their Direct Payment is paid into by the Council.  All transactions relating to the Direct Payment should be carried out using that account, clients must not move money into another account to pay invoices or their contributions.

9.    The Direct Payment Agreement

9.1. All clients/authorised people who receive a Direct Payment will have to sign a Direct Payment Agreement as part of the process to set up the Direct Payment.  Payments will not be made until the Agreement has been signed by the client/authorised person and on behalf of the Council.  The Agreement is a contract between the Council and the client/authorised person that sets out the rules that both parties must follow.

9.2. If the client is able to request and understand what a Direct Payment is and how it should be used then they must sign the Direct Payment Agreement.  If the client has capacity an authorised person must not sign the Agreement on behalf of the client but may sign the Agreement in addition to the client.  If the client doesn’t have capacity then the authorised person must sign the Agreement.

9.3. If the client/authorised person nominates someone to help them manage the Direct Payment then that nominated person should also sign the Agreement.  However, the client/authorised person must remain in control of the Direct Payment and is still responsible for its use.

10.   Methods of delivering a Direct Payment

10.1. The Council has several different ways of making Direct Payments.  The preferred method is via a prepaid card.  This is where the Council opens up an individual account for the client to manage the Direct Payment in.

10.2. The client receives a card (similar to a debit card) and the information they need to access the account.

10.3. The prepaid card account is a normal bank account.  It allows clients to set up direct debits/standing orders, make BACS transfers and has a sort code and account number that they can use to pay their contributions into the account.

10.4. If necessary clients may instead ask to receive their Direct Payment via a bank account that they open.  When making this choice clients should consider that they will have to have an account that is only used for their Direct Payment and that choosing this option may delay the setup of their Direct Payment.  The account they open must not offer (and the client must not request) an overdraft.

10.5. Clients who opt for this method will also have to supply more detailed monitoring information to the Council (copies of bank statements, invoices and receipts) than clients who use prepaid cards.

10.6. If during the assessment the client and social care practitioner agree that the client needs support to manage the Direct Payment then the client will be offered a managed account via the Financial Administrative Service operated by Encompass.  The cost of this service will be added to the client’s personal budget.

10.7. All clients who open their own bank account or who use the Financial Administration Service will need to sign a bank waiver form before they can receive a Direct Payment.  This will enable the Council to reclaim any unspent monies if and when the Direct Payment is ended.  A bank waiver form is not necessary for recipients of prepaid cards.

10.8. Wherever possible services should be paid for via BACS transfer from the Direct Payment account or by use of the client’s prepaid card or debit card.  Where a service can only be paid for by cash invoices and receipts must be obtained by the client, kept for the client’s records and submitted during monitoring of the Direct Payment account.

10.9. Cash-in-hand payments to carers are forbidden as are payments in kind (e.g. buying gifts for carers rather than paying them a salary).  Use of such payments might lead to HMRC investigating the client.

10.10. All clients are required to keep records relating to their Direct Payment.  For clients with managed accounts the account provider will keep copies of important documents.  Clients with prepaid cards are encouraged to upload invoices and receipts to their online accounts.  Clients who have chosen to open their own bank account must find their own way to securely and accessibly store their information.

10.11. Current legislation requires all Direct Payment recipients to keep evidence of payments and income (including all receipts) for at least 6 full years plus the current tax/financial year.

10.12. Direct Payment recipients are required by law to submit monitoring data as and when requested by the Council.  The Council won’t request this information more frequently than is reasonable.  Clients with prepaid cards who have uploaded their documents to their account won’t need to resubmit their information.  Encompass will provide the information they hold for the clients whose accounts they manage.

11.  Breaks in care

11.1. Where clients have employed a personal assistant (PA) they may continue to receive their Direct Payment during a break in their care (e.g. admission to hospital) as they are likely to have contractual obligations to their PA(s).  For all other services the Direct Payment will be suspended if the break in care lasts longer than 4 weeks.

11.2. Holidays or breaks taken in other areas outside of the local authority area may result in the Direct Payment being temporarily suspended whilst the client is away. However, each case will be considered on its own merit and in conjunction with the information recorded on the support plan.

12.  Moving to the area of another local authority

12.1. Where a client transfers their Ordinary Residence to another local authority area the new authority is responsible for funding the care that is in place at the time of transfer until the new authority has carried out their own assessment.

12.2. Where a transferring client is in receipt of a Direct Payment the Council will be responsible for ensuring that there is enough money in the client’s Direct Payment Account to cover the first 28 days of transfer.  The Council will also send a copy of the client’s support plan to the new local authority.

12.3.  Once all the invoices covering the period funded by Sutton have been paid the London Borough Sutton will recover all surplus monies. This recovery will take place within 3 months of the move taking place.

13.  Employing Personal Assistants

13.1. If a client chooses to employ a personal assistant they must comply with HMRC’s rules. This includes (but is not limited to) the requirements to pay tax, national insurance contributions, to offer a pension scheme and to pay for annual, sick and/or parental leave. Advice regarding these requirements is available from the Direct Payment support service run by Encompass.

13.2. In order to comply with HMRC’s rules clients are encouraged to use a payroll provider.

13.3. It is expected that clients will have a formal contract of employment for their personal assistants which should detail the terms and conditions of their employment including:-

• Insurance - this will include employer’s liability insurance

• Contingency / sick / annual leave etc. - the contingency requirements will be identified in the support plan which will cover both periods of holiday and sickness.  Minimum annual leave entitlement is currently 25 days per annum which may be pro-rated where the personal assistant does not work full time.

• Redundancy - PAs might be entitled to redundancy pay depending on how long they have been employed by the client.  Clients should contact their payroll administrator or Encompass for current entitlements.

14.  Employing a family member

14.1. Direct Payments cannot be used to purchase services from the client’s partner (married or unmarried) or a person who is a close relative living in the same household, except in necessary circumstances.  Clients who think it is necessary should seek agreement from the Council when their support plan is written.

14.2.    A close relative is defined as:-

• Parents,

• Parent-in-law

• Aunt

• Uncle

• Grandparent

• Son or Daughter

• Son-in-law or Daughter-in-law

• Stepson or Daughter

• Brother or Sister

• The partner or person living as the partner of anyone in the above list.

14.3. Clients cannot normally use their Direct Payments to secure services from someone who lives in the same household, other than a person recruited as a live-in personal assistant, providing they are not a close relative.

14.4. Local authorities have discretion to make exceptions to this rule. All exceptions must be justified and the Council must be able to show that all other methods of securing the service have been tried.  The relevant Assistant Director, or the Head of the Disability Partnership for Children and Young People, must approve any exceptions to these rules.

14.5. Where the support to be purchased via a Direct Payment is complex, the social care practitioner, along with the people involved, may agree that a person living in the same household as the client may be paid a weekly fee for administering the Direct Payment. Any such payments should be set out in the support plan.

14.6. The amount agreed to be paid to the family member to provide the administrative function should be a token amount, should not become a weekly wage and should provide value for money when compared to other comparable services that are available (for example the Financial Administration Service provided by Encompass LATC).

15.  Spending more than the Direct Payment Amount

15.1. All clients are entitled to buy the amount of service that they wish.  However, if the amount is over and above what has been agreed in the support plan then the extra care should be paid for from the client’s own funds and cannot be paid for using the Direct Payment.

15.2. Any care purchased over and above the amounts agreed in the support plan is the responsibility of the client and will not be financially supported by the Council.

15.3.If a client’s Direct Payment account becomes overdrawn the Council will work with the client to investigate the cause of the problem.  If the issue is that the client hasn’t paid their contribution or has purchased extra care they will be required to make payments from their own funds to fix the problem.  If the client is the victim of financial abuse or fraud the Council will work with them to safeguard them.

15.4. Each case will be dealt with individually based on the client’s circumstances.  The Council will consult with the client and may change the method used to deliver the Direct Payment or withdraw the Direct Payment and replace it with commissioned services.

15.5. Clients have flexibility and choice about how they arrange their support and who provides that support.  However, the Council must also get value for money from any services it funds.  The Council will therefore set appropriate unit rates for any services funded via a Direct Payment.  Should the client choose to engage support which costs more than this amount the client will be responsible for funding the additional cost.

16.  Reviewing the Direct Payment

16.1.  All care funded by the Council will be reviewed by a social care practitioner at least once per year.  This includes care funded via a Direct Payment.

16.2. When preparing for the review the social care practitioner will check the client’s social care record and read the notes from the financial monitoring carried out on all clients’ Direct Payment accounts.  They may also consult the officers who carry out the monitoring for further information.

16.3. If concerns have been identified during the monitoring they will be discussed with the client during the review (see “Monitoring”).

16.4. The review will take a person-centred, strengths-based look at the care and support required by the client but will also holistically consider the client’s management of the Direct Payment.

16.5. The social care practitioner will ensure that as far as is possible the client is given enough support to continue using their Direct Payment and that any questions the client has about Direct Payments are answered.  This may involve the client being referred to the Direct Payment support service run by Encompass.

17.  Monitoring

17.1. The Council will undertake financial monitoring of all Direct Payment accounts on a regular basis (at least once each year).

17.2. Clients are required to pay their assessed contribution into their Direct Payment account.  Where a client fails to make their contribution the Council may invoice the client to recover the amount due (taking into account the amount of care purchased).  The Council may also consider changing the way it provides the care and support that the individual requires.

17.3. Recovery will be made against unpaid client contribution because the local authority is responsible for funding the difference between what the client can afford to pay and the amount agreed in the personal budget / support plan.

17.4. Points 17.2 and 17.3 do not apply to either Children’s or Carers’ Direct Payments accounts.

17.5. The Council will request a refund from the client/responsible person for any Direct Payment money that is spent inappropriately.  Cases of particular concern may be referred for investigation by the Adult Safeguarding team.  Their work may include the participation of other agencies including fraud investigators and/or the police.

17.6. Clients who do not use their Direct Payments or do not arrange any care or support will be reassessed by a social care practitioner.  This reassessment will consider whether the delivery method of the Direct Payment needs to be changed or whether it would be better for the Council to commission services for the client.

17.7. Any issues identified during the financial monitoring will be fed back to the social care practitioners who carry out the annual reviews of each client’s care.  Clients may also be contacted by the officers carrying out the monitoring work regarding details specific to their circumstances.  Generic information may also be provided to all clients following rounds of monitoring.

17.8. If successive rounds of monitoring identify recurring issues the Council may work with the client to change the delivery method of their Direct Payment or consider replacing the Direct Payment with services commissioned by the Council.

17.9. Clients must return the monitoring information requested by the Council.  If a client fails to respond the Council will support the client to improve the management of their Direct Payment but reserves the right to terminate the Direct Payment and replace it with commissioned services.

18.  Surplus account balances

18.1. The financial monitoring will look at the amount held in the Direct Payment account.  Clients will be allowed to keep up to 8 weeks’ worth of payments plus the value of any one-off/annual payments as a reserve.  The Council will seek to recover any surplus above that limit but will consider the individual circumstances of each client when doing so.

18.2. The Council recovers surplus funding through an invoicing process in all instances. These invoices will be sent to the client/authorised person/managed account provider for authorisation and payment.

18.3. If a reclaim invoice is not paid then the Council may suspend future payments into the client’s Direct Payment account until the surplus is recovered rather than pursuing debt recovery actions.  Where the decision has been made to terminate the Direct Payment or where such recovery will take longer than 1 year then the authority will chase the debt through usual debt recovery actions.

19.  Ending a Direct Payment

19.1. Any client has the right at any time to ask for their Direct Payment to be ended. Where such a request is made and the client still requires support the date that the Direct Payment shall stop will be agreed by the Council and the client but will be at least 2 weeks from the date of request.  This will enable any Personal Assistants that have been engaged to be provided with and work their period of notice.  The Council must also be given adequate time to source providers to cover the care and support required.

19.2. In cases where the Direct Payment is no longer a suitable way to meet the client’s needs the Council will prioritise commissioning the necessary support as quickly as possible.

19.3. If the Council has evidence that the client is misusing the Direct Payment they will discuss the situation with the client with the aim of stopping the misuse and supporting the client to continue to receive a Direct Payment.

19.4. However, if the misuse continues the Direct Payment will be terminated and replaced with services commissioned by the Council.  Depending on the type of misuse the Council may (at any stage in the process) notify other agencies of the circumstances.

19.5. Should a client enter a registered care home as a long term resident then their Direct Payment will cease.  All future payments will be stopped, any money remaining in the Direct Payment Account must not be used to pay the care home and after a maximum of three months (to give the client/authorised person time to pay any outstanding invoices or commitments) the Council will recover any Direct Payment money not used to purchase care and support.

19.6. The client will not be required to pay their contribution into their Direct Payment account during this closing-down period as they will be re-assessed using a different calculation for their contribution towards the cost of their care home.

19.7. Recipients of Direct Payments who become entitled to NHS Continuing Health Care (CHC) will lose their entitlement to receive funding from Adult Social Care. These clients may still be entitled to receive money to purchase their support but this payment will be made by the local Clinical Commissioning Group. This is known as a Personal Health Budget and people awarded CHC should request Personal Budgets should they wish.

19.8. Any surplus held in the Direct Payment account should be used to pay any outstanding liabilities including outstanding care costs, invoices and (where appropriate) redundancy. Once these have been completed all available other Direct Payment money should be returned to the Council. Any surpluses in the Direct Payment account of the deceased should not be used towards funeral costs.

Appendix A

Regulations specify Direct Payments may not be offered to certain people whose liberty to arrange their care is restricted by certain mental health or criminal justice legislation, as follows:

i) patients detained under mental health legislation who are on leave of absence from hospital;

ii) Conditionally discharged detained patients to Home Office restrictions;

iii) Patients subject to guardianship under mental health legislation and those covered by the new power of supervised discharge introduced by the mental Health (Patients in the Community) Act 1995;

iv) people who are receiving any form of aftercare or community care which constitutes part of a care programme initiated under a compulsory court order;

v) offenders serving a probation or combination order subject to an additional requirement to undergo treatment for a mental health condition or for drug or alcohol dependency;

vi) offenders released on licence subject to an additional requirement to undergo treatment for a mental health condition or for drug or alcohol dependency; and

vii) people subject to equivalent Scottish mental health or criminal justice legislation.”