Direct Payment Fact Sheet 

Direct Payments & Mental Health Legislation 

This information sheet highlights some of the key elements in 
legislation and national guidance relating to Direct Payments for people 
receiving mental health services and their Carers. 

In short, there is a duty at assessment and review where an individual 
has assessed needs and a written care plan for an offer of Direct 
Payments to be made to the individual. A conversation is required to 
explore how Direct Payments may assist in meeting needs identified in 
the care plan. 

Direct payments are monetary payments made to individuals who 
request to receive one to meet some or all of their eligible care and 
support needs. The legislative context for direct payments is set out in 
the Care Act, Section 117(2C) of the Mental Health Act 1983 (the 1983 
Act) and the Care and Support (Direct Payments) Regulations 2014. 

This guidance supersedes the 2009 guidance on direct payments, and 
reflects the new legislative framework. 

Direct payments have been in use in adult care and support since the 
mid-1990s and 
they remain 
the Government’s preferred 
mechanism for 
personalised care and support. They provide independence, choice and 
control by enabling people to commission their own care and support in 
order to meet their eligible needs. 

Direct payments, along with personal budgets and personalised care 
planning, mandated for the first time in the Care Act, provide the 
platform with which to deliver a modern care and support system. 
People should be encouraged to take ownership of their care planning, 
and be free to choose how their needs are met, whether through local 
authority or third-party provision, by direct payments, or a combination 
of the three approaches. 

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For Direct Payments to have the processes involved in administering 
and monitoring the payment should incorporate the minimal elements 
to allow the local authority to fulfil its statutory responsibilities. These 
processes must not restrict choice or stifle innovation, and must not 
place undue burdens on people to provide information to the local 
authority. 

The Care Act 2014 confirms personal budgets in law for people with 
eligible assessed needs and carers, including the right to direct 
payment. Care and Support (Direct Payments) Regulations 2014. 

People assessed as having eligible needs should not be put off accepting 
direct payments by a lack of adequate information about how their 
needs can be met. Putting practical arrangements in place for self-
directed support may take longer in some cases, but whether someone 
opts for direct payments or council-provided services, there should be 
no significant difference in the ease of the process. 

The Health and Social Care Act 2008 amended the Health and Social 
Care Act 2001 to extend the scope of direct payments to include adults 
lacking capacity to consent to their receipt. A number of exclusions 
previously placed upon individuals subject to mental health legislation 
and to provisions of criminal justice legislation relating to mental 
disorder have also been lifted. 

It is expected that, in most cases, people subject to mental health 
legislation will now enjoy exactly the same rights to direct payments as 
anyone else. However, in a few cases, councils will have a power (but 
not a duty) to make direct payments to such people. 

Under the Regulations, councils now have a power (although not a 

duty) 
to make 
direct payments to people 
(‘restricted 
patients’) 
who are 

conditionally discharged under the 1983 Act (or the equivalent Scottish 
legislation). By definition, conditionally discharged restricted patients 
are offenders who have been detained in hospital under the 1983 Act 
(or the equivalent Scottish legislation) and who remain liable to recall to 
hospital if necessary for their own health and safety or the protection of 
others. 

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For example, 
if 
it is a condition of 
a person’s community treatment 

order under the Mental Health Act 1983 that they accept a particular 
type of Community care service, then the council would have a power, 
but not a duty, to make direct payments in respect of that service 
(provided, of course, all the other criteria for making direct payments is 
met) 

Where councils decide that it is not appropriate to make direct 
payments, they should put the reasons for the decision in writing, and 
make a written record available to the individual. They should also 
inform the individual about how to access complaints procedures if they 
are not satisfied with the decision of the council. 

Remember, if you are unsure, have any queries or need additional 
support; please contact the Direct Payments Team here at KDC. 

Telephone: 0151 480 8873 Email: andy.gilbert@kdc.org.uk 

You can find this Fact sheet along with others covering a variety of 
topics by visiting us at www.kdc.org.uk 


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