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8. Direct payments

As set out in paragraph 6, once a personal budget has been requested, direct payments are one of the ways in which a personal budget can be used, and involve a payment made directly to a child’s parent, the young person (possible from age 16) or their nominee to meet the outcomes in the EHC plan, by arranging support themselves. Direct payments must be set at a level that will secure the provision specified in the EHC plan. If a direct payment is not set at a suitable level it must be reviewed and adjusted.

Direct payments for special educational provision, health care and social care provision are subject to separate regulations:

  • The Special Educational Needs (Personal Budgets) regulations 2014
  • The National Health Service (Direct Payments) Regulations 2013
  • The Care and Support (Direct Payments)Regulations 2014

These regulations contain  common requirements relating to consent, use of nominees, conditions of receipt, monitoring and review of direct payments and persons to whom direct payments must not be made (such as those subject to certain rehabilitation orders).

Education, health and social care must be satisfied that the person receiving the direct payment will use it appropriately in the best interest of the child. The parent or young person will be required to sign an agreement which sets out the purpose and amount of the funding, that the funding will be used to meet the outcomes of the EHC plan and explains the legal responsibilities, payment and monitoring arrangements. It is important that the agreement is read carefully and understood. Parents or young people may be asked to present evidence of how the funding has been used.

Where it is confirmed that funding has not been used for the purpose intended, it will be a breach of the agreement.   The implications of this are laid out in the agreement and can include:

  • the direct payment will be stopped
  • return of funds to the local authority

Additional requirements in agreeing the use of direct payments include considering the impact on other service users and value for money.    For example, where a service is delivered in a group setting it may not be financially viable to deliver a proportion of this provision via a direct payment, as it may not be possible to re-allocate the funding from the provider’s payment into a direct payment.

Direct payments offered to meet health needs, require the agreement of a care plan between the CCG and the recipient. This will include:

  • the health care needs to be met and the outcomes to be achieved
  • the things the payment will be used to purchase
  • the name of the care co-ordinator managing the care plan
  • who is responsible for monitoring the health condition
  • the date of the first review
  • the notice required if the CCG decides to reduce the direct payment
  • a procedure for discussing risk
  • where people lack capacity and are vulnerable, the plan should consider safeguarding, promoting liberty and where appropriate set out any restraint procedures.[1]

If the local authority refuses a direct payment they must explain their decision in writing and also explain the process for review of the decision. If the refusal concerns the health part of the EHC plan, then the explanation for the refusal and the opportunity for a review must be provided by the CCG.


[1] SEND Code of Practice January 2015 p184