Will changing fostering agencies affect my fostering allowance?

Changing fostering agencies can affect the amount and structure of your payments, because each agency may use its own allowance rates, fee structure and payment policies. The transfer itself does not create a universal new rate. What you receive will depend on the new agency’s terms, the type of fostering you undertake and the arrangements for any child placed with you.

It is important to separate the different parts of fostering income. The fostering allowance is intended to meet the child’s day-to-day costs, such as food, clothing, personal items, travel and activities. Some agencies also pay a separate fostering fee to recognise the carer’s skills, commitment and role. Other payments may relate to specific placements, training, equipment, birthdays, holidays or agreed expenses. These are not necessarily included in the headline allowance, so compare the full package rather than one figure.

Before agreeing to transfer, ask the prospective agency for a written breakdown covering:

• the allowance for each age range and type of placement;
• whether a separate fee is paid and how it is calculated;
• whether payments differ for emergency, respite, short-term, long-term, parent and child, or specialist placements;
• how payments are made and when they are normally processed;
• which costs are included in the allowance and which can be claimed separately;
• how mileage, activities, clothing, equipment, holidays and other agreed expenses are handled;
• whether payments change when a placement ends, pauses or moves to a different plan; and
• what happens to payments during the transfer of an existing placement.

If you already have a child placed with you, do not rely on a verbal assurance that the financial arrangements will continue unchanged. Ask both agencies and the relevant placing authority to confirm who will pay each element, from what date and under which agreement. The child’s care plan and placement arrangements should remain central to the transfer, and financial details should be recorded clearly so that there is no uncertainty about responsibility for agreed costs.

A new agency should also explain whether its rates are reviewed, what circumstances can lead to a change, and whether any payment is conditional on completing particular training or accepting certain placement types. This does not mean you must accept every placement offered, but it is useful to understand how the agency’s expectations relate to its payment structure before you move.

When comparing agencies, look beyond the total amount. A higher quoted allowance may cover costs that another agency reimburses separately, while a lower figure may exclude expenses that you would need to meet yourself. Check whether the quoted amount is paid per child, per placement or according to another arrangement, and ask for examples based on the type of fostering you are considering.

Your tax position should also be checked separately from the agency’s payment rate. Foster carers may be able to use HMRC’s qualifying care relief rules, but the calculation depends on your circumstances and the fostering income you receive. Changing agencies may alter the records you need to keep or the way payments appear on statements, even where the underlying tax rules have not changed. An accountant or HMRC can advise on your individual position.

Keep copies of the proposed agreement, payment schedule, policies and any written confirmation about an existing placement. Compare these documents with your current terms and raise differences before giving notice to transfer. You can also ask how the agency supports carers with budgeting, records and financial queries, as these practical arrangements can be as important as the headline rate.

At Become a Foster Family, we provide clear information about financial support as part of the wider fostering process. Our teams can explain the payment arrangements that apply through the relevant local office and help potential foster carers understand what to check before making a decision. The key point is to obtain a complete written offer and compare like for like, including allowances, fees, expenses and arrangements for children already placed with you.