Budgeting Problems

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    This factsheet provides information about problems that may arise with your direct payment budget, and steps you can take to resolve them. The main problems that can arise with direct payment budgets are to do with overspending and underspending of your direct payment money.


    Overspending of your Direct Payment money happens for a few reasons. There are also a few signs that can indicate this may be happening. It is important to recognise the signs, and understand the reasons why it may be happening, so the correct action can be taken to correct an overspend.

    Overspending may mean that you end up being unable to pay your carers, as there is not enough money in your direct payment to cover their wages.

    A good indication that you may be overspending your direct payment money is if you start employing your Personal Assistant for more hours on a regular basis, compared to the hours you originally employed them for, when your Direct Payment first began.

    This may be because you are unsure of how many hours you are able to afford for your support. If you suspect this reason, please call Independent Lives and speak to the IAA team, who can support you to resolve this issue.

    Another reason might be that your needs have increased, and you need extra money in your Direct Payment to pay for this. If you suspect this reason, please contact your Social Worker who can arrange for a reassessment to be done to see if you are eligible for any more funding.


    Underspending can occur for a few reasons. These can include, being unable to find Personal Assistants, meaning money for wages is building up in your Direct Payments account.

    Any unspent money will build up in your account, forming a surplus. It is important not to build up a surplus greater than 8 weeks’ worth of Direct Payment money, as any surplus greater than this may be ‘clawed back’ by your local authority.

    If you have a Managed Bank Account with Independent Lives, they will write to you advising that an excessive surplus has accrued. If this occurs, please call the IAA team to discuss and try to resolve underlying issues with your Direct Payment.

    If you do not have a managed account and you suspect you are underspending your Direct Payments money, because you are not able to recruit, or do not have enough Personal Assistants, please speak to the IAA team at Independent Lives. They can calculate the surplus available and advise on how you may be able to reduce this surplus.

    Independent Lives can help you with your recruitment needs.

    The way your Direct Payments money can be spent is agreed in your support plan. Check to see if there is anything else listed that you can spend your excess money on. Anything that is not listed must be agreed by Social Services.

    Your Local authority will contact you should they require you to return any unused funds. They call this a “clawback” The funds will then be used for someone else who has care needs.

    Last updated:  24th April, 2024


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