Managing Your Direct Payment Money

Managing Your Direct Payment Money

While using direct payments you will need to manage how you receive your money, make payments for services you use, pay your Personal Assistant(s) and forward their tax or National Insurance deductions to HMRC.

There are 3 ways you can choose to handle the money side of things depending on how much responsibility you want to have. A Direct Payments Worker will explain these options to you in more detail during the set up process.

Low responsibility: Third Party Payroll Service

The most popular choice with direct payments recipients, the third party payroll service means you use a payroll company to handle the money on your behalf.
They receive the money directly from the council or the CCG.

They pay your Personal Assistant and their tax and/or National Insurance contributions to HMRC; they can receive and pay invoices for services and insurance; they will provide monitoring details such as statements or receipts to Lambeth Council or the CCG; and they can keep track of annual leave or sick leave taken by your personal assistant.

All you have to do is let them know about any changes or when your Personal Assistant is off on holiday or due to illness.

Medium Responsibility: Prepaid Card

You can choose to receive your direct payment through a prepaid card. The council will charge the card with your direct payment money. You can then transfer the money from the card to your Personal Assistant or a service you pay for.

If you chose this option you will either have to work out how much to pay your Personal Assistant and their tax and/or National Insurance yourself, or you will have to pay a payroll company to do these calculation for you. You will also have to provide your Personal Assistant with a payslip for their records.

However with this option you do not need to worry about any monitoring issues as the council are able to check how the money has been used through the card.

High Responsibility: Bank Account

If you choose to use a personal bank account you must open an account that is solely for your direct payment money and nothing else.
The direct payment is paid into the account and you will then have to pay your Personal Assistant, HMRC, services and insurance for yourself out of this account.You will have to work out how much to pay your Personal Assistant and calculate their tax or national insurance.

You can pay a payroll service to make calculations for you and you will make all the payments from the account yourself, either using cheques or by bank transfer.

The council will also ask you for monitoring information such as statements from the account and time sheets demonstrating the hours worked by your personal assistant.