There's no need to feel uncomfotable asking about the financial side of fostering.
Understanding how the payments and allowances work can help you to decide if becoming a foster carer could be an option for you and your family. It is important to know that there is financial support to care for a child, but also to help with your cost of living.
Fostering with one of our five local authorities means you will benefit from regular weekly payments and allowances.
Our payments are competitive, enabling you to focus on caring for our children.
How it works with Foster with us
Foster carers get an allowance for each child (and adult in the case of parent and child placements) who stays with them. Allowances are paid weekly or monthly. They cover the cost of caring for the child, as well as providing an income.
Fostering is a responsible, professional role. The allowances that your local authority pays reflects this. Each local authority offers their own payments and allowances, based on the specific age and needs of the child you are caring for. We know that fostering is a valuable role, and your allowance reflects this.
All our partners pay a generous and competitive allowance. They pay in line, or above, Government guidelines, and review these allowances whenever guidelines change.
Fostering allowances and fees explained
| Type of allowance | What the allowance is for |
|---|---|
| Foster allowances | Goes toward the care of the child |
| Fostering payments | Provides an income for the foster carer |
| Additional allowances | Sometimes additional allowances are paid to cover special occasions, like birthdays, holidays, Eid, Christmas or Fostering memberships and training |
What the fostering allowance covers
Fostering allowance is paid per child, based on their age. It covers:
- an amount of money towards your weekly shop
- an amount of money towards your utility bills
- clothing expenses
- transport costs
- entertainment, activity and recreational costs
- pocket money
We recognise the time and effort foster carers put into building their knowledge and developing additional skills.
We pay fostering professional fees in recognition of this experience and training. These payments provide an income and are set by your level of experience and training.
We can also pay additional fees specific to the child's needs, such as:
- essential fostering equipment
- one-off clothing allowances
- mileage payments - dependent on the journey
Self-employment and paying tax and National Insurance on fostering allowance
All foster carers in the UK are classed as self-employed. If you become a foster carer you will need to register with HMRC for the role.
The Government applies a generous tax-free allowance to fostering income. Almost all your fostering income is exempt from tax thanks to Qualifying Care Relief.
Compared to alternative employment with a similar salary, foster carers keep more of their fostering income:
- Households do not pay tax on the first £19,360 they earn from fostering each year
- You also get tax relief for every week a child is in your care
- You could receive up to £25,000 per year with no tax to pay
- The Government gives foster carers National Insurance Credits to build a state pension
There is more information on tax arrangements on GOV.UK
Claiming benefits
If you claim benefits, you don't automatically lose those benefits if you start to foster. The exception to this is job seekers allowance, as a foster carer who is looking after a child will not usually be available for work. You can find more advice on becoming a foster parent on GOV.UK or by speaking to our hub team.
The Department for Education funds Fosterline
You can visit the Fosterline website, or ring their Freephone number 0800 040 7675, from 9am to 5pm, Monday to Friday.
They offer confidential and impartial advice, including help with tax and benefits. The service is available for both current and prospective foster parents.
Get in touch
Our team of fostering experts are always on hand to help. Speak to our fostering hub co-ordinators to find out more about our payments and allowances.