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Emma - Foster Carer

Fostering allowance and payments

allowance

At Fostering Solutions, we understand the realities of fostering a child or young person – the ups, the downs and challenges faced. While extremely rewarding, there is no denying the emotional and financial costs you could encounter. This is why we are dedicated to helping you not just understand the costs involved in becoming a foster parent, but also how to manage the financial side of fostering.

We provide a generous fostering allowance and carer payment structure to all of our foster carers, offering crucial support that doesn’t just lend carers a helping hand, but further enhances their foster child’s quality of life. See below for some allowance examples for our foster carers.

How much do you get paid for fostering?

The amount of fostering pay depends on the type of foster care you move into. All carers receive a standard fostering allowance for each of their children, whilst the additional fostering payments will vary according to each child’s age and individual needs.

How does my foster care allowance work?

Foster care payments are split into two parts – the fostering maintenance allowance (which covers the cost of looking after a child) and your fostering fee (our recognition of you wonderful work).

The maintenance element of your fostering pay covers things like:

  • food
  • clothing
  • toiletries
  • pocket money/savings
  • Christmas, birthday or other festival presents
  • leisure activities, including holidays and transport costs

Fostering fees also vary according to certain circumstances. Foster care isn’t a nine to five job and involves a great amount of skill and dedication, especially where teenagers, siblings or more challenging children are welcomed into a home. Families fostering these children receive a higher foster care allowance, both as extra gratitude from us and as a means to meet the greater financial demands that looking after vulnerable young people like these can entail.

What will my new employment status be when fostering?

The HMRC recognises foster care as self-employment, a status with tax benefits that can really make a difference to carers’ lives. It also means keeping a record of the ages and dates of when you foster children, for the completion of your annual tax return.
Once approved as a foster carer, we encourage you to seek further advice from your local tax office. They will clear up any questions you may have, and can help you get the most out of your new employment status.

Do foster carers pay tax?

Foster carers do still pay tax, but benefit from a fixed tax exemption of up to £10,000 per year (or less, if for a shorter period of time), which is shared equally among all foster carers in the same household. This means you don’t have to pay tax on the first £10,000 of income you make from fostering.

Fostering allowance examples

Fostering allowance varies depending on the needs of each child, but it isn’t always easy to work out just how the allowance works and the typical amounts available. This is especially true when you factor in tax relief, an additional option for foster carers where the qualifying amount is based on the initial £10,000. Following that, the rate is £200 per week, per placement aged under 11, and £250 per week, per placement for children aged over 11.

To help make this clearer, here are some illustrative examples based on a 52 week foster placement:

Aimee and Kara are sisters aged 12 and 14. As a sibling group, their foster carers receive £703.04 per week for the length of the placement.

Over 52 weeks of the year = £36,558.08.
Tax relief: £10,000 + £250 x 52 x 2 = £36,000.
Therefore, only £558.08 is taxable.

Jay is an 8 year old boy with ADHD. His foster carers receive additional financial support due to his condition: a total of £460.88 per week for the length of the placement.

Over 52 weeks of the year = £23,965.76.
Tax relief: £10,000 + £200 x 52 = £20,400.
Therefore, only £3,565.76 is taxable.

Frankie is a 14 year old girl who has been living in a residential unit and has been placed with Step Down foster carers. During this transition placement, Frankie and her foster carers will work to a programme of additional support and psychological consultation.
Step Down carers receive the following weekly payments for the length of the placement:

£462 p/w for weeks one to three.
£532 p/w for weeks four to 41.
£462 p/w for week 42 onwards.
Over 52 weeks of the year = £26,684.
Tax relief: £10,000 + £250 x 52 = £23,000.
Therefore, only £3,684 is taxable.

Are there any other incentives or benefits open to me?

From the comfort of ‘working’ from home and changing a young person’s life, to the foster carers allowance and other financial incentives, there is always something to keep our foster carers smiling. Examples of further benefits include:

• A start-up payment of £150 to help you prepare to welcome your first foster child into your home, without financial worry rocking the boat.
• A new placement payment of £75 each time a new child joins your family.
• Complimentary membership at Foster Talk, a wonderful hub of fostering advice, tips and resources. You can also find discounts for fun days out, or simply chat to other carers in a space that is dedicated to you.
• National Insurance Credits, which you will be eligible for once you begin fostering, and which count towards your State Pension.

As your support system, Fostering Solutions aims to make your fostering experience a fulfilling journey from day one. That’s why, 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 Callback 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?

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