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COVID-19: paying for carers, furlough and direct payments

Many vulnerable people still require continuing care, but what should be done if their carer needs to self-isolate or has been advised to stay at home for 12 weeks (shielding)? Should they continue to be paid, or is furlough a more appropriate option?

Agency care staff

In many cases, the individual will have been receiving care from a carer contracted to an agency who may still want to charge for their work. However, if it is not possible for the work to continue, then the agency, as the employer, should look to furlough their staff. The same challenges also apply where care is contracted directly, where the individual or a family member is the employer and the carer the employee.

In the first instance, a reasonable step would be to ask the carer to initially utilise their annual leave. The advantage, at least in the short term, for the carer is that for this period they will be paid in full. If the carer is off sick, they will be entitled both to contractual (if applicable) and statutory sick pay.

 If they do not wish to take annual leave and they need to be off for a sustained period, then they should be furloughed as per the coronavirus job retention scheme.

This means that the employer can use the government portal to claim for 80% of furloughed employees’ (carers on a leave of absence) usual monthly wage costs, up to £2,500 a month. In addition, the scheme also covers the associated employer national insurance contributions and minimum automatic enrolment employer pension contributions on that wage. Employers can claim for furloughed employees who were on their PAYE payroll on or before 19 March 2020. This was originally 28 February 2020 but was extended to include more workers.

The impact of furlough on care provision and client relationships

Eligible employees must be furloughed for a minimum period of three consecutive weeks. When they return to work, they must be taken off furlough. Employees can be furloughed multiple times, but each separate instance must be for a minimum period of three consecutive weeks. It is then a choice for the employer as to whether they wish and, importantly, can afford to top up the final 20% of the carer’s monthly wages. This is an important consideration, particularly where there is a long-established working relationship between the individual and their carer or maintaining a good consistent package of care has been challenging.

While the current pandemic will undoubtably cause everyone to suffer some form of financial detriment, either now or in the future, ensuring that the working relationship is maintained, and the carer is not lost should be balanced against the employer’s finances and any losses incurred by them.

However, this needs to be balanced against the fact that during the lockdown period or if self-isolating period many people’s outgoings will be significantly reduced – offset to some extent by the fact that they will not have to pay for commuting or petrol (other than shopping), clothes, entertainment, meals out, holidays etc.

In most cases there is likely to be a team of carers. When making decisions regarding furlough, or requesting carers use some of their leave, it is important to consider the impact this could have when they are able to return to work. Careful consideration is needed to ensure that a suitable care regime remains in place, avoiding carers being off, then returning to work and having lots of annual leave left which they will then need to take at the latter part of the year - meaning all carers are off at the same time.

The government has helpfully provided an update with regards to annual leave in context of the coronavirus pandemic. Workers who have not taken all of their statutory annual leave entitlement due to COVID-19 will now be able to carry it over into the next two leave years. The regulations will allow up to four weeks of unused leave to be carried into the next two leave years, easing the requirements on employers to ensure that workers take statutory amount of annual leave in any one year.

Case example

Robert is directly employed by John to provide care for John’s son, Stephen. Stephen has specific and unique behavioural and care needs and Robert has been employed for a considerable number of years and has developed a positive working relationship with Stephen and his family.

Stephen’s care is paid for privately as he was awarded compensation for his injuries and disabilities.

Robert takes immunosuppressant medication and has received a letter from the NHS advising him to stay at home for 12 weeks (this is known as shielding). Robert is the sole earner and has a young family and can claim statutory sick pay but would not be able to get by on SSP each week alone.

What is the appropriate solution?

It is obviously in Stephen’s best interests to try and maintain the positive relationship with his carers. However, there is also a duty to ensure that appropriate and sensible decisions are made concerning Stephen’s finances. In this case it would be sensible to furlough Robert. The government’s aim is to ensure that people can cover most of their outgoing expenses in order to ring fence and try to secure their future.

An alternative could be to agree or enforce a period of annual leave. This would mean that Stephen would be paid in full for this period and then the furlough scheme could be used for the remaining weeks.

A note of caution

These unprecedented times are causing exceptional pressures on everyone, with concern over finances and employment. Unfortunately, there have been cases where this uncertainty has led to less conscientious carers placing individuals, and themselves at risk. For example, a carer who has suspected or confirmed COVID-19 or is living in the same household as someone who has, should not continue to work with the individual. A failure to notify their employer of their condition could amount to gross misconduct for which they are likely to be dismissed. Irrespective of the relationship, the vulnerable individual’s welfare is always paramount.

Care funded by direct payments

What if a carer is paid for via a direct payment (DP) but the vulnerable person does not require their service due to having to self-isolate or receives support from a relative or someone who is now at home? Does that carer still need to be paid?

If the individual contracts directly with the carer and pays for the service via a direct payment then it is not possible to furlough the carer. The government recently announced that the scheme is not intended to cover job roles that are already funded by the public purse. This would include carers who are funded via direct payments. It is therefore advisable, that for the time being at least, to continue to pay for carers, even if you do not require them to work.

An alternative option is to consider whether there is anything else or different the carer could be doing during their time instead of the physical care and support. This could include support with shopping or collecting prescriptions or preparing meals. It may also be worth considering banking some hours, for use when support can resume. If the lay off period (not to be confused with the legal definition of that term) is likely to be short (e.g. seven to 14 days) then you may wish to pay a retainer.

Under existing law and guidance, health and social services refuse to allow direct payments to be paid to family members living in the same household as the individual receiving the care unless there are exceptional circumstances. It is our view that the COVID-19 pandemic which necessitates an arrangement where individuals are cared for by close family members qualifies as exceptional circumstances.

The local authority or clinical commissioning group will need to be satisfied that the care is necessary to satisfactorily meet the individual needs, or to promote the welfare of a child and to fill in gaps in in the package. The individual should ask the relevant funding body for agreement to use their direct payments to employ live-in family members.

Policy and legislation are changing every day and the government is having to change the law to deal with matters as and when they arise to ensure they are taking the necessary steps to protect everyone, so It may well be that further emergency legislation will be enacted. Before making any long-term decisions, it is important to seek appropriate advice and discuss the matter with the funding body.


This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. © Shoosmiths LLP 2022.


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