Pre-payment cards and direct payments

Think Local Act Personal (TLAP) has published guidance concerning the use by local authorities of pre-payment cards for direct payments / personal budgets. TLAP describes itself as a ‘national partnership’ that includes the Department of Health and Social Care, the Social Care Institute for Excellence and the Association of Directors of Adult Social Services (ADASS) – so this is guidance that courts would consider to be ‘weighty’.  The guidance can be accessed by clicking here.

The guidance formalises a report published in 2017 by the Personal Independent Living Strategy Group.[1] It states in clear terms that people cannot be forced to use such cards – something that many local authorities seemed to have trouble understanding.

The 2017 research found that:

  • local authorities were spending over £1.2m a year on fees and costs to operate the cards and that two commercial companies dominated the market;
  • some authorities were ‘imposing the cards on recipients of direct payments contrary to statutory guidance’;[2]
  • the number of people using such cards was set to increase rapidly, as many authorities were making them ‘their default offer’;  
  • the cards enable authorities to view all transactions in ‘real time’ (raising significant data protection concerns) and to tightly control their use;
  • some local authorities were placing blanket restrictions on cardholders using the payment cards to withdraw cash despite clear guidance from the Department of Health that this was not acceptable;[3]


The guidance from TLAP is to be welcomed. It is worth reading in full[4] but includes:

  • Payment cards should be an active choice made by the person from a range of meaningful options, including a traditional direct payment paid into an account managed by the person or their representative;[5]
  • Each year the local authority should publish a statement detailing the numbers of people they provide personal budgets to, the proportion who use payment cards, and the fees incurred;
  • There should be no default restrictions on the places in which and services for which the card can be used;
  • Any restrictions on the use of the care funds associated with payment cards should be individually placed and be proportionate to specific, identified, documented and assessed risk.


[1] Personal Independent Living Strategy Group Payment cards must support not restrict choice and control for users of direct payments (2017).
[2] For relevant sections of the statutory guidance see for example paras 12.58 – 12.59.
[3] Statutory guidance’ para 12.59.
[4] To access the guidance click here.
[5] Here this is simply restating what is in the statutory guidance paras 12.58 – 12.59.