Managing the money:
advice for individuals, staff or
managers
July 2010
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1 What are the rules for spending a Personal Budget
These are as follows
 The personal budget can only be used to meet the agreed needs and outcomes set
out in the support plan
 It must be legal and must not bring the Council into disrepute.
 It cannot be used for anything that exposes a person to serious physical or financial
risk.
 It cannot be used for gambling (including bingo).
 It cannot be used for things that would be paid for by the National Health Service.-to
fund health related treatments
 It cannot be used to pay a family member living in the same household unless there
are exceptional circumstances
Examples of what these rules mean in practice are listed in question 6
2 Who agrees on the amount of money that is in my personal budget?
The amount of money is initially estimated. This is based on you completing a self assessment
questionnaire with your care co-ordinator/social worker which will give an estimate of how much
money might be needed to meet your needs. This is called your “indicative amount”.
You should then put together a support plan that identifies your needs, the outcomes you wish
to achieve and how these can be met including how much this will cost. If you need help doing
this your care co-ordinator will assist you.
Normally the cost of your support plan is expected to be less or the same as your “indicative
amount” Your support plan has to then be signed off by the care co-ordinator and their
manager. For some support plans, before signing it off, the manager may need to look in more
detail using some of the more detailed guidance about the rules that are listed in the answers to
question 6
3 How can I take my personal budget?
People can receive their Personal Budget in 6 different ways: the top two are far and away
the most common ways and these are as follows
 Direct Payment. The person receives the money and spends it to reach their
identified outcomes.
 Virtual Budget. The council organises and manages the money on the person’s
behalf usually by a care coordinator. This tends to be used to purchase services such
as day or home care or community support from an agency
 Individual Service Fund (ISF). The budget is managed on the person’s behalf by an
agent or an organisation that is registered as a public limited company, limited
company, partnership, registered charity or sole trader.
 Indirect payment to a third party. A representative of the person manages the
money
 Indirect payment to a Trust. Often called an Independent Living trust
 Broker fund. Payment to an independent person or organisation
 As a combination of the above
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A direct payment can provide a more imaginative use of a personal budget as direct payments
can be used very flexibly.
You can discuss which option is most likely to suit you with your care co-ordinator
4 Where can I get some good ideas from people who have used their personal budgets
imaginatively, greatly improved their life and kept within the rules?
Direct payments used to mainly be used to purchase care or support provided by employing a
personal assistant but you can now also use a direct payment much more flexibly to purchase a
wide range of goods and services such as a computer, specialist items of equipment, gym
membership or driving lessons as long as these are the best way to meet your needs and
agreed outcomes. You can even use your direct payment and add to it your own money for
example to pay towards a holiday if it has been agreed you need a break
The whole new emphasis is to give choice and control back to the individual and spend money
to meet needs in ways that make sense to you. It is not for professionals to pre-determine for
you what might be considered as most likely to meet your outcomes.
The imaginative use of personal budgets is beginning to provide better and more creative
solutions to meet people’s needs than have traditionally been provided by using care agencies
or other paid help. There are many examples of what might initially seem unusual or even
controversial use of a personal budget. Many of these are however really good ways of using
the money more effectively and also meeting people’s expectations and aspirations
There are numerous examples of these available on the internet. Below are some useful web
addresses which give real examples from other local authorities
http://www.scie.org.uk/publications/guides/guide10/index.asp
In Salford we have an organisation called Penderels Trust which provide comprehensive
information, advice and support for people who want to know more about Direct Payments and
help with the arrangements to set up and manage them.
Tel: 0161 743 3592.
Email: salford@penderelstrust.org.uk
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5 I have heard about “legal rewards” can you tell me more?
Please note there are national concerns about how legal rewards can be used. As a
result guidance is being awaited before these can be approved for use.. This guidance
will be updated as soon as this information is known
By way of background information however legal rewards are a way of rewarding friends, family
or neighbours for helping to support you with some of your identified needs. Here are some
examples;
 Paying a friend’s membership fee of a club like photography or archery, in return for them
taking you and supporting you whilst there.
 Purchasing a season ticket for a friend who provides care for you whilst taking you to a
football match each week rather than paying a PA to do that.
 Taking somebody out for a meal to say thank you for the support and care they provide
for free.
 Paying for someone’s petrol in exchange for taking you out
Anyone considering a legal reward also has to be aware that there is a distinction between
rewarding someone as a token of your appreciation and paying a regular amount of money for
their services. If it is a regular payment this might affect benefit entitlement or require notification
to the inland revenue as something that might be liable for income tax. If this were to happen
with your personal budget it would place the council in disrepute and also create difficulties for
your helper. This is one of the aspects of legal rewards where further guidance is awaited
You would not normally be able to use legal rewards to reward someone for helping you with
something they have already been willingly helping you with prior to you receiving your personal
budget.
6.The rules for spending a personal budget seem very general. I need to know more
about what these rules mean in practice?
The overall guidance on what a direct payment can be used for is deliberately broad because
we do not want to limit people’s ideas and options. One key objective of personal budgets is to
give people much more control and choice and therefore too much guidance might be too
restrictive
In most cases people do not come up with ideas that are unreasonable or excessive. However if
you do want to have a better idea of the sorts of situations that might or might not be accepted
some further detail on each of the rules is listed below

The personal budget can only be used to meet the agreed needs and outcomes
set out in the support plan
o This means that however you are proposing to spend your personal budget it
has to be clearly related to the needs and outcomes that have been agreed as
part of your assessment
o Normally we would agree to meet what seems to be sufficient to meet those
needs; it is not about including everything you might ideally want
 for example you might want to go abroad to meet your need for a break
but it would be unlikely that going abroad would be the only or least
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o
o
o
o

expensive way of enabling you to have a break. However you could add
your own money to what it would cost to have a break closer to home
 In general we aim to agree with you on what seems reasonable in the
circumstances
You need to demonstrate that you are meeting all your outcomes and needs
and not just say one outcome to the exclusion of the others
 For example if you were to suggesting spending all your personal
budget on improvements to your social life but basic requirements such
as meals or your personal care were not being covered, then we would
be unlikely to approve this
Once an outcome is achieved the personal budget may then reduce or cease
altogether. However further outcomes may also be identified at that point that
serve to improve the quality of your life using the same or similar amounts of
money For example
 One of Mrs A’s initial outcomes was to help her regain her confidence
and self esteem and support her to regain some of her social skills. To
do this due to her disability, she needed physical help to get out of the
house and somewhere safe to go. She identified that attending a gym
and improving her fitness would give her a stepping stone towards
achieving her initial outcome and this was agreed.
 After 6 months regular attendance at a gym, Mrs A felt much better in
herself and ready to move on. She felt she could ultimately aim to get a
paid job but initially decided to use her budget to help her get some
work experience by doing some volunteering work helping out at the
Age Concern
 After a further 6 months she hopes to be in a good position to make that
further step forward to full independence in her life and start paid work
All personal budgets are subject to review. This is at least once a year but may
be more frequent
The frequency of the review will depend on your particular circumstances and
the nature of your outcomes and the solutions you have chosen. So for
example if gym membership was a part of your support plan we would
probably want to review this with you initially at 3 months to see if it was
working or not, how much it was being used and whether it was meeting your
expectations or whether something different might actually work better
It must be legal and must not bring the Council into disrepute
o The use of public money means that if the council were challenged about how
it is being used, we could confidently justify why the personal budget had been
agreed and that the money was being spent wisely
o Examples we could not agree to include
 Anything that could be construed as fraud
 Using the money for something that was taken into account in your
charging assessment ie when your charge is being assessed you have
the opportunity to have any expenditure you make because of your
disability disregarded. If for example you already pay a friend’s petrol
money for taking you shopping and it was agreed that this would be
taken off the amount used to calculate your charge-you cannot then
decide to use your personal budget to pay your friend for this because
you would be benefiting twice
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
o
o
o
o
o
Where you already have a state benefit or other grant that should be
used for the same purpose eg mobility allowance and you propose to
use your personal budget for taxis. Other benefits could include Access
to Work money, or money from the Independent Living Fund
 Using the money to buy things you would normally be expected to buy
out of your benefits or wages eg rent, utility bills, food, ( but it could be
used towards the delivery, preparation and any support required
because of individual needs) alcohol etc
 Where the items or services you are including might be considered to be
unreasonable, frivolous or excessive. However the council will take
seriously into consideration all factors
Another issue that needs to be considered is that the council is being fair in the
amount of money it is releasing so that no one could say it has given more or
less to someone in a similar position
Some areas would be down to discussion with your care coordinator who in
some circumstances might need to take further advice themselves as some of
these areas are not always easy to fairly decide
We would want to listen carefully to all suggestions or ideas you have as
something that might initially seem questionable could actually turn out to be
good use of public money as well as being something that would make a big
difference to your life
If you disagree with any decision you are entitled to challenge it and ask for a
written explanation-there is a complaints procedure which you can use if you
remain unhappy- see question 9 for more detail
There are a few things that are deemed to be illegal use of a direct paymentthe two main examples are
 buying long term residential care- however a short break i.e. less than
28 days in a residential home for a break is fine
 Paying for nursing care ; this should be paid by the NHS; if you wish to
purchase short term care in a nursing home you shoulsd seek advice
from your social worker

It cannot be used for anything that exposes a person to serious physical or
financial risk.
o Physical risk could include using the money towards going on a very risky
activity which you are having no adequate training to do and anyone would
agree was foolhardy; however it should not be about reducing all risk from
people’s lives as this is unrealistic and potentially discriminatory
o Financial risk could include using the personal budget as a deposit on an
expensive item when you have no means of paying the full cost of the item

It cannot be used for gambling (including bingo)
o It could be used to have someone take you to the bookies if this is something
you used to like doing but cannot now because of your disabilities but you
would have to use your own money when placing a bet

It cannot be used for things that would be paid for by other organisations such
as the National Health Service.-to fund health related treatments
o We might need to get advice ourselves if a service should be provided by the
health service; for example
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

a counselling service or
equipment such as an air conditioner because you felt it would help
improve your medical condition
o Another example may be where someone may be eligible for floating support
that may be funded by Supporting People ( we would advise you and help to
get this for you if that was the case)

It cannot be used to pay a family member living in the same household unless
there are exceptional circumstances (see direct payments guidance).
http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGui
dance/DH_104840 see section 135 page 50
o It would be most unusual to pay a husband to look after a wife or to pay
another close relative to care for someone living in the same household
o There would need to be very good reasons to pay another relative living in the
same house, the times this might be agreed would be if it was the only solution
left after all other options had been exhausted
o We can offer other forms of support to a relative living in the same household
to take some of the strain out of their informal caring responsibilities such as a
carers personal budget or a break from caring
o A personal budget taken as a direct payment can be used to pay a relative or
neighbour not living in the same household. There is a need to get advice
when considering such arrangements as for example paying a person you
know may affect their benefits if they are unemployed or their income tax
position
7 It seems a bit complicated now, what are the main things I need to keep in mind?
The advice above is to help you think through where you might be uncertain about whether you
can use the money as you are thinking and give you some idea of the considerations the social
worker may have to think about. In many cases your proposals for spending your personal
budget will be absolutely fine
The main things it needs to cover are
 Is it meeting your needs in the way you want it to and improving your quality of life
 Is it within your “indicative amount” i.e. the estimate of how much we think someone
with your level of need would normally receive
 Is it reasonable expenditure in your circumstances and makes “common sense”
 Does it meet the test of “money well spent” or value for money
If it meets these 4 statements it is very likely to be agreed
8 Once I have put together my support plan what happens if social services disagree with
the ideas I have put forward for spending my personal budget?
Your support plan will go to a care co-ordinator/social worker or manager to be agreed. Most
support plans are quickly agreed but in some circumstances there may be element of the
support that you are requesting that might come under question or be refused. This should be
on the basis of one of the reasons above or because you have exceeded the amount of money
available to you.
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You will be advised of the reasons why any of your ideas have not been accepted. Your care
co-ordinator/social worker will explain the basis for the decision. If you are unhappy or disagree
with any decision you should inform them. Where anything cannot be resolved between you, the
issue will go to a manager to re-consider your request. You can provide any additional
information in writing that you feel would support your case. We can also arrange for you to get
advice from an independent advocate or you could seek this yourself by contacting a voluntary
agency such as a User Led Organisation (ULO) or Age Concern, Citizens Advice Bureaux or
any other advice agency of your choice
The manager will then decide whether to agree with the original decision or make a new one
which could be to agree in your favour or come up with another option.
If the manager agrees with the original decision, you will be informed in writing with a full
explanation of the reasons.
Where there are complex issues a more formal consideration with a senior manager may be
necessary.
If you remain unhappy because you do not agree and feel the decision has been made unfairly
you will be advised of how to make a formal complaint.
9 What does the law in relation to personal budgets say?
If you really want to know the detail ADASS, the Association of Directors for Adult Social
Care, have produced a helpful paper on personalisation and the law which specifically
addresses the issues of what can be purchased in page 15 of the guide. Some of this
guidance is fairly technical as it is based on the law but for anyone wanting to research
this area it is the best source for this information
http://www.dhcarenetworks.org.uk/_library/Resources/Personalisation/SouthWest/ADAS
S_Personalisation_and_the_law_12.10.09.pdf
10 What other advice is available about the use of direct payments?
SCIE (Social care Institute for Excellence) produce a useful FAQs paper on direct payments.
This is available on
http://www.scie.org.uk/publications/guides/guide10/files/guide10.pdf
If you want to speak to someone about direct payments you can contact SUGGEST
Tel: 0161-743 3592
Email: office@suggest.org.uk
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