Direct Payments
Managing The Money
Croydon Social Services gives you money, the Direct Payment, and you use it to pay for the support you need.
They will tell you how much you can get, and pay this directly into your bank account. You will need to open a special bank account for your Direct Payments and provide the account name, bank, bank sort code and account number details to your DPSS Advisor. These details will be entered onto your Direct Payments Agreement that you and your Care Manager will sign.Separate Bank Account
The separate bank account is needed because the money you will get has to be accounted for. It is much easier to do this if the money is kept separate from all your other money. Your Care Manager or DPSS Advisor can provide you with a letter for the bank to help explain to the bank you use or you choose why you need another account, or a new account. The bank account should be a current account which provides monthly statements and a cheque book.
The Money You Receive
The Direct Payment you receive is based on the number of hours of help you will need. Croydon Council will pay you at the rate of £12.50 per hour. So if you are assessed as needing 2 hours support per day, you would get £25 per day. The hourly amount is intended to cover all the ongoing costs of employing a Personal Assistant.
If you need something else, say a piece of equipment or arranging your own activities in the day, the Direct Payment is based on the cost of buying that equipment, or the cost of the activity.
You could employ your own Personal Assistant to do this work for you. If you decided you did not want to employ someone yourself, you could use the money to buy in help from an agency.
Tax and National Insurance
Paying someone to work for you means you become responsible for paying Tax and National Insurance to the Tax Office (HMRC). But you don't have to work out everything for yourself. Your Direct Payment allows for the cost of using a Payroll Service. The payroll service will deal with all the tax paperwork so you don't have to worry about it. The Direct Payments Support Service can introduce you to a selection of Payroll Services that can deal with all your staff payments and costs of administration, and the DPSS can liaise with the Inland Revenue on your behalf if you wish.
If you would like to deal with the tax yourself, the DPSS will tell you who can provide detailed advice.
When you employ your own Personal Assistant you are legally responsible for working out how much Tax and National Insurance Contributions they owe, deducting it from their wages and paying it to the Tax Office. As an employer you may also be liable to pay Employer's National Insurance Contributions if your Personal Assistant earns more than a set amount each week.
If your PAs are self-employed, they will be responsible for paying their own tax and national insurance contributions.
Your Personal Financial Contribution Towards Your Support
The London Borough of Croydon has a policy of charging for services — where you may be required to make a financial contribution towards the cost of your support. You will need to have a Financial Assessment to work out how much you may be charged. In Croydon, charges are normally deducted in advance from your Direct Payment. This means, if you do pay charges, you will have to "top up" your Direct Payment account from your own money, to have enough to pay for your support.
Quarterly Returns and Record Keeping
The DPSS have produced a factsheet No.6d "Quarterly Returns and Monitoring" which provides more detail on how to submit financial returns to the council every 3 months.
Guidance on Budgeting Costs and Expenses
The DPSS can also provide recipients with guidance on which costs to budget for and what expenses can be claimed using Direct Payments money. Costs include;
- Costs of recruiting personal assistants, i.e. criminal record bureau checks.
- Costs of employing personal assistants, i.e. insurance.
- Costs of organising cover for your main personal assistant while he or she is on holiday.
Your DPSS Advisor can help you with budgeting your Direct Payment, to ensure you have planned ahead to cover the costs involved.