A personal budget is an identified amount of money linked to assessed needs and agreed outcomes. A direct payment is one way of receiving that budget, where money is paid to a parent, young person, adult, representative or nominee so they can arrange agreed support themselves.
In social care, personal budgets and direct payments usually follow an assessment by the local authority. In health, personal health budgets are NHS-funded and may be available for people with certain assessed health needs, including children and young people eligible for continuing care. (england.nhs.uk) These arrangements are not blank cheques: the money must be used to meet needs and outcomes agreed in a care plan, support plan, personalised care and support plan or EHCP.
Families often think of personal budgets and direct payments only as “money for care hours”. They can be more flexible than that, but only when the support is linked to assessed need.
For disabled children and young people, the possible areas may include short breaks, respite, personal care, access to the community, support during school holidays, help with independence, personal assistants, equipment, travel linked to services, activities, social participation, communication support, some therapy or health-related support, and support that helps the family manage daily life.
The difficulty is that families are often given fragmented information. Health may talk about a personal health budget. Social care may talk about direct payments. SEND teams may talk about Section J of an EHCP. Adult services may talk about a Care Act personal budget. Each system uses similar words but applies different rules.
This is why families can feel they are asking the wrong person the wrong question. The better starting point is:
“What needs have been assessed, what outcomes are agreed, and could a personal budget or direct payment help arrange the support more flexibly?”
A personal budget is the overall amount identified to meet agreed needs. A direct payment is one way of managing that budget.
For social care, the NHS explains that a personal budget is the amount the local council will pay towards the care and support a person needs after assessment, and that the money can be paid directly to the person so they can make more decisions about how it is spent. (nhs.uk) That direct payment must still be used in line with the agreed care plan.
For health, NHS England explains that a personal health budget uses NHS funding to create an individually agreed personalised care and support plan. A personal health budget may be managed as a notional budget held by the NHS, a third-party budget, a direct payment, or a combination.
In practical terms, families may see three main models:
1. Notional budget
The council, NHS or other organisation holds the money and arranges the support.
2. Direct payment
The money is paid to the family, young person, adult, representative or nominee to arrange agreed support.
3. Third-party or managed arrangement
Another organisation manages the money and arranges support on behalf of the person or family.
A mixed package is also possible. For example, the local authority may commission some support directly while the family receives direct payments for another part.
Social care direct payments should be used to meet assessed social care needs and agreed outcomes.
For disabled children, this may include support under children’s social care law. Families may request a child in need assessment, a disabled child assessment, a parent carer’s needs assessment, short breaks assessment or occupational therapy assessment depending on the issue.
Support that may be considered includes:
For adults, the Care Act 2014 framework becomes central. GOV.UK’s Care Act statutory guidance says everyone whose needs are met by the local authority must receive a personal budget as part of the care and support plan or support plan. (gov.uk) That budget should give clear information about the money allocated to meet needs identified in assessment and recorded in the plan.
The budget must be sufficient to meet assessed needs. That is an important point. A direct payment should not be set so low that the family or young person cannot actually buy the agreed support. If agreed provision in the plan is not being delivered at all, that is a separate issue in its own right.
A personal health budget is different because it uses NHS funding and must meet assessed health and wellbeing needs.
NHS England says personal health budgets can be used for ongoing care and support, such as NHS Continuing Healthcare, children and young people’s continuing care, and section 117 aftercare under the Mental Health Act. They can also be used for one-off budgets to support specific health goals or outcomes, including hospital discharge or mental health recovery.
For children and young people with complex health needs, a personal health budget might help arrange a package that is more flexible than standard commissioned services. This might include support workers, health-related personal assistant support, delegated healthcare tasks where properly agreed, equipment, therapies, respite linked to health needs, or support that helps the child or young person stay safe, well and able to participate in daily life.
There are limits. NHS England guidance says direct payments for healthcare cannot be used to buy GP services, urgent or emergency treatment, surgical procedures, NHS charges, alcohol, tobacco, gambling or anything unlawful. (england.nhs.uk) The money must be spent on services agreed in the personalised care and support plan.
The key question is:
“Has the NHS assessed a health or wellbeing need, and could a personal health budget meet that need in a more personalised way?”
Some groups have a legal right to have a personal health budget. NHS England guidance identifies these as adults receiving NHS Continuing Healthcare, children and young people eligible for continuing care, people eligible for section 117 aftercare, and people eligible for an NHS wheelchair, through personal wheelchair budgets. (digital.nhs.uk)
This does not always mean a right to receive the money as a direct payment. It means the person has a right to a personal health budget. The way it is managed still needs to be considered, and the direct payment route must meet the relevant conditions.
For other people, a personal health budget may still be considered where it would help meet assessed needs, but the right may not be automatic.
Families should ask the responsible Integrated Care Board (ICB), NHS team or continuing care team:
An EHCP can include education, health and social care provision. Personal budgets and direct payments can therefore overlap with EHCP planning, but the source of responsibility still matters.
In an EHCP:
The most important issue is whether the provision educates or trains the child or young person. If health or social care provision educates or trains, it should be treated as special educational provision. That may mean it belongs in Section F, not Section G or H.
This distinction matters because the local authority has a strong duty to secure special educational provision in Section F. (gov.uk) Health and social care provision may be arranged through different duties and different complaint or review routes. Where the wrong section is used, this is usually corrected through an EHCP amendment.
For example, community access support might be social care. But if a structured community programme is teaching travel training, independence, communication or vocational skills, it may be educational or training provision. The wording and section of the EHCP can make a real difference.
Families do not need to use complicated wording. A clear request is usually best.
For social care, families might say:
“We are requesting an assessment of our child’s social care needs and a parent carer’s needs assessment. We would like the assessment to consider whether support could be provided through direct payments, including short breaks, community access, personal care and support during school holidays.”
For health, families might say:
“We would like to discuss whether a personal health budget or direct payment could be considered for the assessed health needs in the continuing care plan / EHCP / personalised care and support plan.”
For an EHCP review, families might say:
“We would like the annual review to consider whether a personal budget or direct payment is appropriate for the provision described in the plan, and whether Sections G, H and J need to be updated.”
Families should ask for decisions in writing. If a request is refused, the decision should explain why and what alternative arrangements will be made.
Direct payments can give families more flexibility, but they can also create practical stress. (parliament.uk, nao.org.uk)
Common problems include:
The Local Government and Social Care Ombudsman’s personal budgets focus report found inconsistencies in how councils complied with personal budget duties, including administrative failings, delays, councils not recognising requests, poor decision processes and lack of information on council websites. (lgo.org.uk)
Direct payments should not simply transfer pressure to families. They should be supported, realistic and linked to clear outcomes.
Navigate SEND helps families and professionals understand whether a personal budget or direct payment is the right route, and how it fits into the wider SEND picture.
We can help by:
The aim is not to push every family towards direct payments. They are not right for everyone. The aim is to help families understand their options, make informed decisions and avoid being left with support arrangements that are unclear or unworkable.
No. A personal budget is the amount identified to meet assessed needs. A direct payment is one way of receiving and managing that budget yourself.
Yes, they can in some cases, if respite or short breaks have been assessed as needed and are included in the care plan, support plan or relevant social care arrangement.
No. It must be used for health and wellbeing needs and outcomes agreed in the personalised care and support plan. Some services, such as GP services, emergency treatment and surgical procedures, cannot be bought using healthcare direct payments.
Sometimes. NHS England guidance and Care Act guidance both recognise that direct payments and personal budgets can be integrated or combined where the person and relevant organisations agree, while each body remains responsible for its own duties.
Yes. Navigate SEND can help review the decision, organise the evidence, clarify whether the budget is sufficient, and prepare a clear next step with the local authority, ICB or EHCP review process.
If you are unsure whether personal budgets or direct payments could help with health, social care or EHCP provision, Navigate SEND can help you understand the options, organise the evidence and prepare the strongest request.