Real Payment Deal

In the social care world local authorities make direct payments
to service users and carers to enable them to buy their own care.
But they often clash with other parts of the benefits system.

Alice is disabled and her husband, Daniel, is thinking of giving
up work to look after her. The social services department has
agreed that the direct payment can be made to Alice to enable her
to pay Daniel to care for her. Daniel wanted to know their benefits
entitlement if he gave up work.

They would be looking at carer’s allowance for Daniel, as
Alice gets disability living allowance (DLA) at the middle rate.
They would also receive income support as a couple, which would
include a disability premium and a carer’s premium. They are
in rented accommodation, so would also receive housing and council
tax benefit. Currently, while he is working, his wages disqualify
him from these benefits.

Alice has no income of her own apart from DLA, as she
hasn’t got a national insurance record that would enable her
to get incapacity benefit. Up to a few years ago, she would have
had severe disablement allowance, but that was abolished for new
claimants. Alice is more recently disabled, so she misses out.

Direct payments are normally disregarded for income support
purposes, when paid to the disabled person. But the problem comes
when the payment made to the disabled person is then used to “pay”
the carer. For carer’s allowance purposes, Daniel would be
treated as an employed person if he gets more than £79 a week
and would lose that benefit all together. Worse still, their income
support entitlement would appear to be lost, too. If he was the
income support claimant, any work he does of more than 16 hours a
week would disqualify him from income support (24 hours a week, if
the claim was in his wife’s name).

Also, his income from direct payments would be treated as earned
income even if he worked below 16 or 24 hours. Subject to the usual
“disregard” of £20 for carers, a £75 payment for 15 hours
work a week would mean a £55 cut in income support. If the
carer’s allowance is lost, then the carer premium would be
lost too, costing them another £25.55 a week.

Alice and Daniel considered arranging the payments so that she
is only paying him for a small amount of care each week (no more
than £20) and the rest of the direct payment was paid to
Daniel, not Alice. But according to the National Council for
Independent Living, the direct payment has to be paid to the
assessed person. It can only be paid to a third party to help
manage the payment.

So it looks as though Daniel will have to receive, as wages, the
full amount of any direct payment paid to Alice (paid at the
national minimum wage rate). He may even be due some working tax
credit (WTC) as a low paid adult. But his housing and council tax
benefit entitlement is likely to be low or even extinguished
altogether, especially if he gets WTC. This is despite the fact
that direct payments are supposed to be disregarded when
calculating benefits.

For a system that is supposed to put power into the pockets of
disabled people, there can be very little as disempowering as
having to jump through these hoops because the benefit system is so

Gary Vaux is head of money advice, Hertfordshire
Council. He is unable to answer queries by post or telephone. If
you have a question to be answered please write to him c/o
Community Care.

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