Personal health budgets for dementia care: How to use NHS Funding to choose your own carer

Most families who have been awarded NHS Continuing Healthcare (CHC) assume the NHS will simply tell them who will provide their care. Few realise they can ask for something different.

A Personal Health Budget changes that. It gives families the authority to take control of how their CHC funding is used – and, crucially, who delivers the care. For families who want a specialist, clinician-led approach to dementia care at home, this matters enormously.

At Hometouch, our clinical team regularly supports families who are using a Personal Health Budget to fund live-in dementia care. This guide explains what a PHB is, who qualifies, and exactly how to access one – step by step.

Key insights

• A Personal Health Budget (PHB) is only available to people who have already been awarded NHS Continuing Healthcare – it is not a separate funding route
• All NHS Continuing Healthcare recipients in England have a legal right to request a PHB under the Health and Care Act 2022
• A direct payment PHB gives families the most flexibility – including the right to choose their own specialist live-in dementia care provider
• Only around 17% of PHBs are currently delivered as direct payments (according to data from September 2025). This means that most eligible families never exercise their right to choose their own provider
• PHBs cannot fund care home fees – they are specifically for care outside of hospital, including live-in care at home
• Budgets are reviewed regularly, so the care plan can adapt as dementia progresses

What is a Personal health budget?

A personal health budget (PHB) is an amount of NHS money allocated to meet an individual’s identified health and care needs. It is agreed through a care plan and managed in one of three ways:

1. The NHS arranges care on the person’s behalf (a notional budget)
2. A third-party organisation manages the money
3. The funds are paid directly to the individual or their representative to arrange care themselves (a direct payment).

That third option (the direct payment) is the one that gives families the most choice. With a direct payment PHB, you can select your own care provider, set your own care routines, and build a package of support around your loved one’s specific needs and personality. You are not restricted to whoever the NHS would otherwise arrange.

It’s worth being clear about what a PHB is not. It is not a separate funding route that exists alongside CHC. It is a mechanism for managing CHC funding differently. To access a PHB, your loved one must first be awarded NHS Continuing Healthcare. The PHB is the next step – the decision about how that funding is held and spent.

According to the most recent NHS England Personal Health Budgets data, around 17% of Personal Health Budgets are currently delivered as direct payments, with 80% delivered as notional budgets – meaning most eligible families never exercise their right to choose their own provider. This guide is designed to help you understand that right and how to use it.

Who is eligible for a Personal Health Budget?

To receive a Personal Health Budget, your loved one must first qualify for NHS Continuing Healthcare. CHC is a fully funded NHS package of care, available to adults in England whose primary need is a health need rather than a social care need. Eligibility is assessed against four key characteristics: the nature, complexity, intensity, and unpredictability of the person’s needs.

People living with dementia can and do qualify for CHC – particularly at more advanced stages, when care needs become frequent, complex, or difficult to predict. A dementia diagnosis alone does not guarantee eligibility, but where someone requires skilled, regular intervention that goes beyond what a typical care arrangement can provide, CHC (and therefore a PHB) may be available.

By the end of September 2025, 20,687 adults with a Personal Health Budget were eligible for NHS Continuing Healthcare – a figure that has grown steadily as awareness of the right to request a PHB has increased.

If your loved one has not yet been assessed for CHC, this is the essential first step. You can request a CHC Checklist assessment from your GP, district nurse, or social worker.

One important distinction: Personal Health Budgets are available in England. Wales, Scotland, and Northern Ireland each have different systems for managing healthcare funding, and families outside England should contact their regional health authority for guidance.

Step-by-step: how to access a Personal Health Budget for dementia care

Step 1: Apply for NHS Continuing Healthcare

A PHB is only available once CHC eligibility has been established. If your loved one hasn’t yet been assessed, the process begins with a CHC Checklist – a short screening tool completed by a health or social care professional. If the Checklist indicates a possible need, a full multidisciplinary assessment follows.

Request the Checklist from your loved one’s GP, district nurse, hospital discharge team, or social worker. You don’t need to wait to be referred – you can ask for it directly. The earlier you begin, the better, particularly if your loved one has recently been discharged from hospital or if their needs have changed significantly.

Step 2: Request a Personal Health Budget at the point of CHC award

When the Integrated Care Board (ICB) confirms that your loved one is eligible for CHC, you have the right to request that the funding be managed as a Personal Health Budget. This is a legal right under the Health and Care Act 2022 – it is not discretionary, and the ICB cannot refuse a reasonable request.

Ask your ICB care coordinator explicitly: “We’d like to request a Personal Health Budget, managed as a direct payment.” Many families don’t realise they need to ask – the default assumption is often that the NHS will arrange everything. Asking clearly and early is the most important action you can take at this stage.

Step 3: Agree on a support plan and budget

The ICB will work with you and your loved one to develop a support plan. This document sets out what care is needed, what outcomes the care should achieve, and what the budget will cover. This is the stage at which you can specify live-in dementia care at home as the preferred model of support.

The support plan must demonstrate that the budget will meet your loved one’s identified health needs. A specialist live-in dementia carer – providing continuous, consistent, one-to-one support in familiar surroundings – is a clinically sound choice that many ICBs will recognise as appropriate for people with complex dementia needs.

Step 4: Choose how the budget is managed

There are three options for how a PHB is held. In most cases, ICBs default to a notional budget (the NHS arranges and pays for care directly). This offers the least flexibility.

If you want to choose your own provider, ask for a direct payment. The direct payment can be made to you as the family representative, or to a third-party organisation that manages the administration on your behalf – a useful option if the paperwork feels daunting.

It is worth being direct about this with your care coordinator. Notional budgets are simpler to administer from the ICB’s perspective, but a direct payment is your right. Knowing which option you want (and asking for it clearly) will move the process forward more quickly.

Step 5: Select your care provider

With a direct payment PHB, you can select a specialist live-in dementia care provider of your choosing. This is the key benefit – your loved one doesn’t receive care from whoever is on a rota. They receive care from a carer who has been matched to them specifically: their clinical needs, their personality, their routines, and the way they want to live.

When evaluating providers, ask about their clinical oversight structure, their dementia training programme, and how they match carers to individuals. A provider with clinical infrastructure – not just trained carers, but a clinical team that designs and reviews care plans – will also be better placed to work with your ICB to demonstrate that the PHB is being used appropriately.

Step 6: Agree on the care plan with your provider

Once you have selected a provider, they will work with you and the ICB to establish a custom care plan. At Hometouch, this process begins with a clinical assessment by a named care manager — covering not just medical needs but your loved one’s daily routines, personal preferences, and the things that matter most to them. The care plan is then agreed with the ICB as the framework for how the PHB will be used.

This stage is important for compliance as well as quality. The ICB will need to be satisfied that the care plan meets the criteria set out in the support plan. A clinically credible provider with clear documentation processes will make this straightforward.

Step 7: Keep records and prepare for review

PHBs are reviewed regularly – typically after three months and then at least annually. Reviews assess whether the budget is being used appropriately and whether the care plan continues to meet your loved one’s health needs.

Keep records of spending and care delivery. If your loved one’s needs change – as they often do as dementia progresses – raise this with your care coordinator ahead of the scheduled review rather than waiting. Reviews are an opportunity to adjust both the plan and the budget, so they should be approached as a collaborative process rather than a compliance exercise.

What can a Personal Health Budget be used for?

A PHB must be spent on meeting the health needs identified in the agreed support plan. For someone living with dementia at home, this typically includes the cost of a live-in carer, personal care, medication management, and specialist dementia support.

PHBs can also cover equipment or therapies included in the care plan – for example, assistive technology or specialist communication support – provided these are agreed with the ICB in advance. What the budget cannot cover is care home fees. PHBs are specifically designed for care outside hospital settings, including care delivered in the person’s own home.

It’s also worth knowing that the budget is not cash in hand. It must be spent in line with the agreed care plan and is subject to regular audit. Families who manage a direct payment PHB are responsible for keeping clear records of how the money has been used – something a good care provider will help you navigate.

Personal Health Budget vs direct payment: what’s the difference?

These two terms are sometimes used interchangeably, but they refer to different things and it’s worth being clear.

A Personal Health Budget is NHS-funded. It flows from NHS Continuing Healthcare and covers health care needs – the medical and clinical aspects of your loved one’s support.

A direct payment from the local council is separately funded. It comes from the council’s social care budget and covers social care needs – practical support with daily living, companionship, and personal care that falls outside NHS responsibility.

Some families receive both: a PHB from the NHS for health needs and a council direct payment for social care needs. These are managed separately but can work together to fund a comprehensive package of live-in dementia care. If your loved one has complex needs, it is worth asking the ICB and the local authority whether a combined funding arrangement is possible.

How Hometouch works with Personal Health Budgets

Hometouch is a doctor-founded live-in dementia care service with full clinical oversight. We work regularly alongside ICBs and families to support PHB-funded care arrangements, and our clinical team can help ensure the care plan is documented in a way that meets ICB requirements.

If your loved one has been awarded CHC and you’re considering requesting a PHB to fund live-in dementia care, our care experts can walk you through the process and explain how our matching and assessment approach works.

Talk to one of our care advisers – no pressure, just clear guidance on what’s possible for your family.

Frequently asked questions about NHS funding

What is a Personal Health Budget?

A Personal Health Budget is an amount of NHS money allocated to meet an individual’s identified health and care needs. It is only available to people who have been awarded NHS Continuing Healthcare. Families can use it to arrange care themselves – including choosing a specialist live-in dementia care provider – rather than accepting whatever the NHS arranges by default.

Who is eligible for a Personal Health Budget?

To be eligible, an individual must first qualify for NHS Continuing Healthcare. CHC eligibility is assessed against the nature, complexity, intensity, and unpredictability of health needs – not income or savings. People living with advanced dementia who require frequent, skilled intervention are more likely to qualify. Ask your loved one’s GP or district nurse to request a CHC Checklist assessment.

Can a Personal Health Budget pay for live-in care?

Yes. A PHB can fund live-in care at home, provided the care is included in the agreed support plan and meets the individual’s identified health needs. Where the PHB is managed as a direct payment, families can select their own specialist live-in dementia care provider.

What is the difference between a Personal Health Budget and a direct payment?

A Personal Health Budget is NHS-funded, via NHS Continuing Healthcare, and covers health care needs. A direct payment from the local council is separately funded and covers social care needs. Some families receive both – managed independently but working together to fund a full package of live-in dementia care at home.

Can I choose my own care provider with a Personal Health Budget?

Yes – if the PHB is managed as a direct payment. This gives you the right to select a specialist provider of your choosing, rather than accepting whoever the NHS would otherwise arrange. It’s the option that gives families the greatest control over who comes into their loved one’s home and how care is delivered.

Can a Personal Health Budget be used for a care home?

No. PHBs cannot fund care home fees. They are specifically for care outside hospital settings, including care delivered in the person’s own home. If a care home placement is being considered, separate CHC funding arrangements would apply.

How is a Personal Health Budget reviewed?

PHBs are typically reviewed after three months and then at least annually. Reviews assess whether the budget is being spent appropriately and whether the care plan continues to meet the person’s identified health needs. If needs change (as they often do with dementia) it’s possible to request a review ahead of schedule rather than waiting for the next scheduled date.

How do I request a Personal Health Budget?

Once NHS Continuing Healthcare eligibility has been confirmed, ask the Integrated Care Board or your care coordinator for a Personal Health Budget. You have a legal right to request one under the Health and Care Act 2022. Ask specifically for a direct payment if you want to choose your own provider – the default is often a notional budget, which gives you less control.