We realise our foster carers aren’t motivated by money, but we also understand that there are financial implications around foster caring which we are here to help with.
Being a foster carer is emotionally rewarding and there are tax-free financial allowances in place to help ensure that money isn’t a barrier.
Here are some of the questions we are regularly asked around foster carer finances:
How much will I get paid?
Steady placements can potentially earn a foster carer over £20,000 a year tax-free with allowances (equivalent to around £30,000). Carers with a child in placement are paid a weekly allowance of around £400 which is usually tax free, subject to certain limits. This varies for age and location, but multiple placements, such as sibling groups, means multiple payments.
What happens when I don’t have a child in placement?
Foster carers are classed as self-employed by HMRC. This means you won’t receive financial benefits when you don’t have a child in your care. Being self-employed means that you need to complete an annual tax return, but this is straightforward and is something you can do yourself with guidance.
How can I make sure I have regular placements?
- Be flexible around the type of placements you are willing to take. Fostering Solutions has excellent Ofsted ratings and preferred supplier framework agreements with local authorities, meaning we have access to more placements than other agencies and there’s less chance of you being without a child.
- Developing your skills through high quality training. Our excellent training and development programme is designed to help with exactly this.
Will I pay tax?
As a foster carer, you will benefit from a fixed tax exemption of up to £10,000 per year, in addition to your standard personal allowance. This is to be shared equally among all foster carers in your household and means that you don’t have to pay tax on the first £10,000 of foster carer income. After £10,000, further allowances are added:
- £200 per week for each fostered child under 11 years of age
- £250 per week for each fostered child over 11
This means that most foster carers will pay either very little or no tax. The table below shows examples of what this could mean for you.
|Foster carer allowance examples||1 child under 11yrs||1 child over 11yrs||2 children under 11yrs||2 children over 11yrs|
|Standard annual personal tax exemption||£10,600||£10,600||£10,600||£10,600|
|Fixed annual foster carer tax exemption*||£10,000||£10,000||£10,000||£10,000|
|Additional foster carer tax exemption with placement per child per week**||£200||£250||£400||£500|
|Total annual tax free allowance||£31,000||£33,600||£41,400||£46,600|
|Fostering Solutions carer payments per child per week***||£368||£397||£735.04||£794.96|
|Total annual foster carer payments||£19,111||£20,669||£38,222||£41,338|
|Total income after tax||£19,111||£20,669||£38,222||£41,338|
* Based on one registered foster carer
in the household **Assumes that fostering is the foster carer’s only source of income and that the carer has the placement for 52 weeks *** Payment figures are for illustrative purpose only, please call our team to discuss the fees in more detail.
If you have any questions our expert team is waiting by the phone to answer them for you. Simply call 0800 160 160 7 to get in touch with a friendly advisor or alternatively, Request a Call back at a time of your convenience. You may also request to receive a Fostering Information Pack via email.
Still curious? Why not take our quick quiz and see if you could join our fostering family? Alternatively, why not read more in our step-by-step guide to ‘Becoming a Foster Parent’, to find out about the assessment process in more detail?