The pursuit of independence and avoidance of unnecessary care-home admissions are key elements of British government policy for the care of older people. The present government's objective to maintain independence has been compromised by the ‘Residential Allowance’ which, as a component of social security payable to residents in independent-sector homes, could be seen as an incentive to place people in care-homes rather than seek care-at-home. In order to remove this incentive, the government proposed to abolish the allowance and instead transfer resources by a grant to local authorities. This was intended to promote independence by making available funds with which social services departments could support domiciliary care. This paper examines the potential impact of the proposal from the perspective of front line practitioners and managers. Calculations of the proposal's likely effects in five authorities were made from a simulation of their usual decision-making processes. The results, applied to the national picture, showed only a marginal effect of the change upon admissions to care homes. The potential effect of the change in diverting admissions from care homes was seen to be hampered by organisational influences which vary between authorities.