Can I use my direct payments as part of a group?

Pooling direct payments

Sometimes you may want to do something with your direct payments that is not possible, for example because it is too expensive or it isn’t easy to arrange for just one person. It is possible then to join with other direct payment users to form a group and use the combined direct payments to buy support and services that wouldn’t normally be accessible by individuals alone. Getting together as a group to use direct payments in this way is sometimes called ‘pooling’ direct payments. Click on the links below to find out more.

What is pooling?

When a group of direct payments users join together to buy support and services with their combined direct payments it is often called pooling. The money must still be used to meet the agreed aims in the assessment care plan you agreed with your Local Authority.

Real-life examples of pooling include:

  • Setting up a social group – A group of friends contribute from their direct payments so they can meet up regularly to socialise and support each other.
  • Four individuals who met at a day centre joined together so that they could use their direct payments to hire a freelance teacher to give them guitar lessons. This was something that could not be arranged by their day centre.
  • A group in a rural area who did not have easy access to services or good public transport joined together to form a creative arts group based on the local community centre. They employed two trained artists to run the group.
  • Six people with learning disabilities joined together to use their direct payments to set up a small business making and selling cards and other gift items. By pooling their direct payments they were able to afford the salary of a part time project co-ordinator.

How do I organise a group?

As the idea of pooling direct payments is still fairly new, there are no set rules about how it works and how groups should be organised. You should consult your Local Authority to find out about any rules for your area or any examples that others have done.

Before you start a group, you need to think about how the group will be organised. For simple arrangements you may just need to have a list of the basic arrangements signed by the group members. For more complicated arrangements you might need to have a proper and ‘legal’ document made. You will need to speak to your Local Authorities direct payments team to find out more about this and where you can get the help you need to set it up.

What things do I need to think about before I start or join a group?

You need to think about the following when starting or joining a group:

  1. Keeping records – You will need to make sure that the group keeps records of everything including any agreements and all money in and out as a minimum. Each Local Authority will have its own rules for record keeping by groups; you should contact them to double check local requirements.
  2. Structure of the group – You will need to look into what structure your group needs to take. For example, if you are getting together with some friends and each paying your own contribution from your direct payments you are unlikely to need a formal structure.

    However if the activities of the group expand (such as employing people) then you may need to look at more formal arrangements such as whether you need to create a club or set up a small business enterprise. You may also need to consider setting up a joint bank account.
  3. Legal points – In some situations, group members may be responsible for liabilities (such as any debts) of the whole group. You should ensure you fully understand what you will be responsible for before signing up to any arrangement. If in doubt you should get some advice from your Local Authority or social worker as a starting point.
  4. Tax – Whether there are any tax points to think about depends on the type of group you set up. If the group takes on employees, you will need to think about tax and national insurance as well as employment law.  There might also be a need to register for VAT once income goes above a certain amount. The main thing is to ensure you get some advice before starting your group so that you know you are doing the right thing in respect of tax. Your Local Authority is a good starting point.

Where can I get more information?

A user group in Richmond, RUILS, has been funded by the Government to develop pooling direct payments as an option for direct payment users. They now have a dedicated website covering all aspects of pooling, and it includes a detailed guide which guides you through the process of setting up a group and how to maintain and keep it running. The guide is available to buy from the website.