Breakdown of foster care pay
How much are foster carers paid? Foster care pay rates are not regulated by the government so each private agency or local authority can decide how much they pay their carers. This lack of regulation is why underfunded councils can pay the minimum recommended rates and why private agency rates can be much more generous.
Foster carers are classed as self-employed and earn a weekly allowance for each child or young person they look after. The amount of allowance paid depends on the type of care and the age of the child or young person.
About Private (Independent) Agency allowances
On average, national Private (Independent) Fostering Agencies pay a basic weekly fostering allowance and fee of £400 per week, for all ages of foster children. The payment is generally the same for short and long term placements.
About Local Authority (Council) allowances
Local Authority payments have recommended, national fostering pay rates for each foster child. Council foster carers are paid a weekly fostering allowance to cover the cost of foster care for a child or children. England and Northern Ireland councils use the recommended rates. Wales is considering it’s own and Scotland does not use the rates, however they can be used as a guideline.
LA Allowances for 2015 to 2016:
Babies: £123 – Pre Primary: £126 – Primary: £139 – 11 to 15: £159 – 16 to 17: £185
Babies: £136 – Pre Primary: £140 – Primary: £156 – 11 to 15: £177 – 16 to 17: £208
Babies: £142 – Pre Primary: £145 – Primary: £163 – 11 to 15: £184 – 16 to 17: £216
What do the payments cover?
The total pay is structured to separate to the allowance for the child, and reward for the carer.
The payment is provided to cover the following:
General household expenses, food, clothing, mileage, school meals and any other items or outings required to look after a foster child. The payment takes into account the fact that foster care for children cost more than caring for birth children.
The Fostering Network, the UK’s largest charity estimates the following weekly child maintenance costs.
Age Food Clothing Transport Personal Household TOTAL
0-4 £50.86 £36.09 £13.12 £14.76 £49.22 £164.05
5-10 £47.57 £42.65 £11.48 £18.05 £44.29 £164.05
11-15 £59.45 £53.30 £22.55 £26.65 £43.05 £205.00
16 plus £63.86 £63.86 £22.10 £51.57 £44.21 £245.60
Most national IFAs pay foster carers up to double the standard rate, depending on children’s needs and the type of placement required, such as :
mother and baby;
children with special needs;
asylum seeking children.
The additional payments cover the extra cost of the child’s clothing, transport and social allowances which ensures the Independent Fostering Agency’s allowance provides a basic minimum fee (or profit element) of about £200 (non taxable) to an average of £250 per child per week. This enables foster carers to become self employed, earn a reasonable living and choose to care for children and young people on a full or part-time basis.
Generally, Local Authorities and Agencies make their payments directly into the carer’s bank account every two weeks.
Private fostering is when the parent of the child has made an arrangement with another adult (private foster carer) to care for their child. The parent is responsible for any money paid to the private foster carer. The foster carer is responsible for receiving all of the welfare benefits they are entitled to; such as Child Tax Credit, Child Benefit and Housing Benefit.
If the local authority social services assess the child as ‘in need’, they may provide more financial support.
How much tax?
UK foster carers generally pay no tax on their fostering income up to a maximum of £10,000 per placement, plus allowances. Once you are an approved foster carer and registered with the HMRC as self-employed, you’ll need to keep a record of the ages and dates of when you foster children for the on-line or paper tax return you’ll need to complete each year.
How much National Insurance?
Carers are entitled to Home Responsibility Protection – a way to make sure that you do not get less Basic Retirement Pension, because you decided to look after children at home. As a self-employed person you will need to pay Class 2 National Insurance contributions, which are under £3.00 a week.
In receipt of Benefits?
Any payments are generally not included, and do not effect Benefits. However, this will not be the case if you are treated for Tax and National Insurance purposes as though you were self-employed, IF YOU ARE, contact you local Benefits office for advice.
As a foster carer, you will not be able to claim Child Tax Credit or Child Benefit for a foster child. However you may be able to claim Working Tax Credit if you are receiving the reward element and you are treated as self employed.
A help service from a trained adviser for foster carers is available by contacting the Tax Credit Helpline on 0345 300 3900. If you are putting in a claim for this, seek professional advice first.
Foster carers may be in a position to claim any of the following benefits:
Income-Based Job seeker’s Allowance;
Council Tax Reduction;
Disability Living Allowance;
Working Tax Credits;
How much Housing Benefit?
HB is for a rented home and not for a property that a carer owns and rents out.
A claim can be made for a bedroom for all resident foster children or a bedroom used for fostering not used for up to 52 weeks.
How much Council Tax Reduction?
A reduction of up to 100% can be applied for through the local authority, the amount depends on your council’s scheme, your income and savings, your children and if other adults are resident.
Take the HMRC e-learning course about tax, National Insurance and profit from fostering
This information was accurate when uploaded to the web site. Simply Fostering recommends you contact a professional adviser regarding your tax and/or any financial issues.
Affording to foster children
Being a foster carer is no longer seen as volunteering, it is now a professional career. For agencies to encourage people to become foster carers, they need to provide an acceptable level of financial reward, just the same as for any other workers in the social care sector.
A foster carer will have a massive effect on children’s lives, helping them to improve their self esteem, make better choices and help children to go on to have a safer and happier future, but social services knows that for fostering to continue, carers have to be paid a reasonable fee.
We at Simply Fostering are focused on finding and encouraging people from all walks of life to become foster carers and for the right person, fostering could be a rewarding new career, funded by an attractive rate of pay.
There is a desperate need for more people to foster and to help with the year on year shortage.
More information about national allowances visit Foster carers allowances and rewards article.
Can fostering children be a full time job?
Yes. It is usually expected that a foster carer will be available full time. Generally, the more available you are, the more foster care placements you will be offered. It is not classified as ‘real’ employment as foster carers are paid an allowance and not a wage.
How to be a foster carer – About Agencies
Being a foster carer is one of the most rewarding careers out there, but being with the wrong agency can mean not being offered the number or type of placements you expected, which means not having the income you need.
The best agencies will:
support you as a foster carer and will make sure you are:
a valued member of the child’s support team;
clear about what you are expected to do and your responsibilities as a foster carer;
always part of the fostering decisions made for children;
matched as well as possible to the foster children placed with you;
well trained and supported;
confident to say no to a placement;
involved in plans about children’s contact with their family;
able to ask for help;
able to question decisions;
given enough information before a child comes to you;
aware of the child’s needs, behaviours and background when children arrive;
earning a fair and reasonable income as a full time or part time foster carer .
Income tax exemption
Foster carers are entitled to an income tax exemption up to a certain amount for their fostering.
The amount has two parts:
- A fixed amount to cover capital costs initially set at £10,000 per year
- An additional amount per child, initially set at £200 per week for a child up to the age of 11 years and £250 per week for a child aged 11 years and over.
This government initiative is to make sure carers are not unfairly taxed on the costs they have to meet through fostering.
For more information contact HM Revenue and Customs.
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