Direct Payments
Briefing by Luke Clements ~ updated July 2026. For corrections or suggested additions please contact anjames57@gmail.com
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The 2014 Act (sections 49A – 53A) specifies how an entitlement to a direct payment arises, how the amount of a direct payment is to be calculated and how the payment is to be administered. At the time of writing (July 2026) the regulations that flesh-out the detail of the statutory scheme are The Care and Support (Direct Payments) (Wales) Regulations 2015. These will however be amended (or replaced) as a result of amendments to the statutory scheme resulting from section 20 Health and Social Care (Wales) Act 2025.
General ‘broad brush’ guidance on the scheme is provided in the Part 4 Code of Practice (Meeting Needs). At the time of writing the published version of this Code is dated 2015, but it too will have to be modified to address the reforms resulting from section 20 Health and Social Care (Wales) Act 2025. Hopefully when the Code is updated the Welsh Government will take the opportunity to provide it more detail on the operation of the scheme in Wales.
The SSWBA enables individuals (adults and children) who have been assessed as eligible for care and support to have their needs met by way of a DP – subject to certain conditions detailed in the Act.[i] The 2015 Regulations, state that if these conditions are satisfied, then councils are under a duty to make such payments.
- Section 50 concerns payments to meet the needs of an adult. It provides for payments to be made directly to the adult whose needs are eligible or to a third party – but in every case the authority must be satisfied on a number of counts, including that the payment is an appropriate way of meeting the assessed needs and that the recipient is capable of managing the payment themselves or with such assistance is available.
- Section 51 concerns direct payments to meet the eligible needs of a disabled child and contains not dissimilar conditions. Payments can be made to persons with parental responsibility for the disabled child or directly to the child (or their nominee) if the authority believes the child has sufficient understanding / mental capacity to consent to the making of the payment.
- Section 52 relates to direct payments to meet the eligible needs of a carer and again, specifies a number of not dissimilar conditions.
- Section 53A of the 2014 Act provide for the making of direct payments in relation to individuals eligible for support under s117 Mental Health Act (MHA) 1983. Schedule A1 to the 2014 Act details who can benefit from such payments, to whom they can be made and the many conditions that have to be satisfied before such payments can be made. The Schedule also contains a power to make regulations, albeit at the time of writing (July 2026) no such regulations appear to have been published and no publicly available Codes or guidance appear to exist, that explain how the Welsh Government expects this new scheme to operate.
The direct payments scheme regulated by the 2014 Act is very similar to the scheme that operated prior to 2016 and to the one operating under the English Care Act 2014 (except, of course the Welsh scheme applies to disabled children as well as adults in need and carers).
Problematically, in Wales the relevant Code provides materially less detail concerning the operation of the direct payment arrangements than is provided in England. Given the similarities in the schemes, it would seem appropriate to have regard to the English Statutory Guidance – where the Welsh Code fails to provide specific guidance on a particular direct payment issue. The problem concerning the broad brush guidance in Wales is compounded by the fact that the Welsh Public Services Ombudsman’s Office publishes few reports on investigations compared to the extensive publication scheme operated by the English Local Government Ombudsman. Again, it would seem appropriate to have regard to the English Ombudsman reports where there is no suitable authority in Wales. The High Court has itself sought fit to cite material relating to the English scheme in proceedings relating to a Welsh direct payment dispute.[ii]
There are two aspects of the general direct payments scheme in Wales that were materially different to the equivalent English scheme in the Care Act 2014.
The first is the power of recipients to use their direct payment to purchase care and support from the authority that made the payment (s 53(9) SSWBA 2014) – for example to use the payment to pay for a place in a local authority run day centre.
The second concerns the ability to use a direct payments to cover residential care costs (of any duration). In Wales, unlike in England, there is no general prohibition on using payments to cover long term residential care costs. There is, however, no explanation as to why this power was included or how it is expected to work in practice. The only acknowledgement that this is possible, is in the Part 11 Code of Practice (Miscellaneous and General). In a section discussing the ordinary residence deeming rule (page 31), it gives the example of an individual using their direct payment to pay for residential accommodation in an area other than that of the authority making the payment. The potential problems that arise by permitting direct payments to be used for long periods of residential care, would appear to considerable and in consequence the English Government has decided to not to go down this path .[iii]
NHS Continuing Healthcare (NHS CHC) and direct payments
This topic is considered under the heading ‘Continuing NHS Healthcare and adults – to access this section click here.
[i] As amended by s20 of the 2025 Act.
[ii] See for example, R (BNF) v Newport City Council [2026] EWHC 1212 (Admin) 20 May 2025 para 11.
[iii] In January 2016 the English Government announced that it had decided to postpone the ‘national rollout of direct payments in residential care’ until 2020. It appears that this has now been shelved indefinitely as a result of research that found that the cost of implementing the scheme would be high in relation to its modest outputs – see S Ettelt, R Wittenberg et al ‘Evaluation of Direct Payments in Residential Care Trailblazers’ (Policy Innovation Research Unit 2017).