Fostering Allowance

The basics

  • Private Fostering agencies pay a fostering allowance for each foster child.
  • The allowance pays for the foster child’s day to day care.
  • Fostering agencies also pay foster carers a professional fee.
  • The fee is an income payment for the foster carer.
  • The allowance and fee average a total weekly minimum payment of £450 for each child.

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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 fostering 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 £450 per week, for all ages of foster children. The payment is generally the same for short and long term placements.

Example of income

Foster carer with one foster child
Cindy is a foster carer looking after 12 year old Joe. She has just started fostering and receives a payment of £450 per week.

For the year, Cindy is paid:

(£450 x 52 weeks)     =             £23,400

Taxable income          =             £0

Total paid                    =             £23,400

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 2017 to 2018:

National

Babies: £128 – Pre Primary: £138 – Primary: £141 – 11 to 15: £161 – 16 to 17: £188

South East

Babies: £136 – Pre Primary: £142 – Primary: £158 – 11 to 15: £179 – 16 to 17: £211

London

Babies: £144 – Pre Primary: £147 – Primary: £165 – 11 to 15: £187 – 16 to 17: £218

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 :

teenagers; 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 allowance

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. Fostering one child continually for a tax year, you could receive:

  • A personal allowance of £11,000 plus a fixed rate of £10,000.

As well as a weekly rate of tax relief of:

  • £200 per week for each child under the age of 11 years old
  • £250 per week for each over 11 years old

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.

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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.

Why?

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.

“Love Children – Love a Fostering Career”

You could be a foster carer in 4 months time!

There’s never been a better time to start on the road to a new career as a full or part time foster carer.

Complete our enquiry form, and find out which agencies have vacancies where you live, anywhere in the UK.

Let us help you to find your local agencies that suit you best – for free.

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4 + 1 = ?

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 support – Income-Based Job seeker’s Allowance – Council Tax Reduction – Disability Living Allowance – Working Tax Credits – Housing Benefit.

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.

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.

About Agencies

The best 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 by:

  1. Making you feel a valued member of the child’s support team
  2. Being clear about what you are expected to do and your responsibilities as a foster carer
  3. Helping you to always be part of the fostering decisions made for children
  4. Matching you as well as possible to the foster children placed with you
  5. Making sure you are well trained and supported
  6. Developing your confidence to say no to a placement
  7. Always being involved in plans about children’s contact with their family
  8. Always believing you are able to ask for help and advice
  9. Always able to question decisions
  10. Giving you enough information before a child comes to you
  11. Making sure you are aware of the child’s needs, behaviours and background when children arrive
  12. Making sure you earn a fair and reasonable income as a full time or part time foster carer .

Online Fostering Application Service

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. To help we provide a free online UK Fostering Application Service which helps you to apply for fostering and get the best start in the fostering process.

There is a desperate need for more people to foster and to help with the year on year shortage. For more information about UK allowances check out our 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.

Apply for fostering online.

If being a foster carer is for you, or you want to find out more, take the next step – use our free, no obligation online Fostering Application Service.

Why? We save you time, reduce the confusion and help you to make the right choice.

How? From the information you send us, we’ll check our Database then match you with the most suitable agencies with vacancies in your area.

What’s more? Every agency is different, so choosing the right one means making sure you can look after your choice of foster children, get the best foster carer’s support and the financial benefits that are right for you.

Contact us, and download a copy of our free Simply Fostering – Foster Care Handbook.

Simply Fostering – Answering your questions

Our website contains a huge amount of information about foster caring such as about the fostering assessment the references and  checks that are required and attending the Fostering Panel at the end of the process. You will find all you need to know about fostering  agencies and the process to transfer to a different agency. Read about the issues around fostering a child and the and the Fostering Regulations which oversee fostering in the UK.

Our lets talk money article is a useful read and there’s lots of information about the allowance and pay for foster carers. Foster carers expenses are extra payments which may be paid towards the day to day care of foster children and check out the information about pocket money. If you provide education for your child at home find out if you can foster here; home schooling. For your information watch our video and visit our article; network of support.

Simply Fostering Blog

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