Direct Payments and the Court of Protection: A Landmark Decision for Deputies and Protected Parties

The Court of Protection has now provided much needed guidance on a question that has troubled professional deputies since the decision in Lumb v NHS Humber & North Yorkshire ICB. In the recent case of Re Various Applications in respect of ‘Direct Payments’[1], the Court considered whether a Property and Financial affairs deputy can manage Direct Payments and, if so, what authority is required.

What are direct payments?

Direct Payments are funds paid by a public body directly to an individual, or someone acting on their behalf, so that care and support can be arranged personally rather than commissioned by the local authority, NHS or another public body. They exist across several statutory schemes, including health, social care and special educational needs provision.

The attraction is flexibility. Direct Payments allow bespoke care arrangements, continuity of carers and greater control over how support is delivered. In many catastrophic injury and clinical negligence cases, they form part of a larger package funded by both public resources and damages awards.

The central issue before the Court

The key dispute was whether managing Direct Payments is simply an administrative or financial task that falls within the standard authority of a Property and Financial affairs deputy, or whether it also involves welfare decision-making.

The professional deputies argued that they were merely implementing care plans created by public bodies. In their view, managing Direct Payments was an operational exercise linked to Property and Financial affairs.

The Public Guardian and Official Solicitor disagreed. They argued that Direct Payments involve decisions about how care is delivered, whether Direct Payments are the appropriate model of care, and how support should be arranged in practice. Those are welfare considerations, even if they are not high-level welfare decisions.

The Court’s decision

The Court firmly rejected the argument that managing Direct Payments falls within the general authority contained in a standard Property and Financial affairs deputyship order. The Court held that Direct Payments are not simply another aspect of day-to-day estate management. Instead, they involve a distinct and identifiable set of responsibilities governed by detailed statutory frameworks.

Importantly, the Court found that all four Direct Payment schemes considered in the case share a common objective of promoting choice, control and personalised care. Because those schemes require decisions about how care is delivered and whether Direct Payments remain the most appropriate option, they necessarily involve welfare elements.

As a result, authority to manage Direct Payments is a mixed authority, combining both Property and Financial affairs and Health and Welfare functions. A standard Property and Financial affairs deputyship order is therefore insufficient.

What happens now?

The Court has made clear that managing Direct Payments is not a routine financial function. It is a specialist, mixed authority requiring express approval. The Court confirmed that deputies can be authorised to manage Direct Payments, but only through a specific Court of Protection application seeking bespoke authority.

The decision also creates a potentially significant retrospective issue. Deputies who have managed Direct Payments and charged for doing so without specific authority may need to seek retrospective approval from the Court.

[1] [2026] EWCOP 42