Jan 252026
Universal Credit and Direct Payments
The DWP have updated their Advice for Decision Makers (ADM) guide to make clear that adult social care direct payments should not be considered as capital for means‑tested benefits.
You can read the updated guidance at the link below (see paragraphs H1400-H1402).
They have also notified decision makers via an internal noticeboard post, which tends to have a wider reach and should serve to help flag up the changes.
DWP have suggested that, while this update beds in, people receiving direct payments may wish to include a copy of their care and support plan when applying for or reporting changes for Universal Credit, especially if a decision maker queries money in their account related to direct payments.
It may also help to signpost the decision maker to the relevant ADM paragraph noted above and here –
“Direct payments for self-directed support
H1400 Where a person has been assessed by a local authority as having needs for care or support the
local authority may make payments to that person under prescribed legislation1. These are called direct
payments.
1 Care Act 2014, s 31; Social Care (Self-directed Support) (Scotland) Act 2013, s 4(1);Social Services and Well-being (Wales) Act 2014, s 50; s 52
H1401 Local authorities making direct payments have a right to
1. impose strict conditions on how the money is to be used and
2. recover any direct payments that are
2.1 used for something other than the intended purpose or
2.2 not spent.
1 Care Act 2014, s 33(5); Social Care (Self-directed Support) (Scotland) Act 2013, s 16(2);
Social Services and Well-being (Wales) Act 2014, s 53(1)
H1402 Money attributable to direct payments made under the prescribed legislation in H1400 is not
included in a claimant’s capital. This is because the statutory conditions and restrictions on the direct
payments effectively keep the money out of the claimant’s hands. In essence the money remains held by
the local authority.”
assets.publishing.service.gov.uk
assets.publishing.service.gov.uk
