What financial support is available to foster carers?

Financial support for foster carers usually consists of payments intended to meet a child’s day-to-day needs, together with possible additional payments for particular costs, responsibilities or circumstances. The amount and structure vary according to the fostering provider, the child’s age and needs, and the type of placement.

What the main payment is intended to cover

The core fostering payment is designed to contribute towards costs such as food, clothing, household bills, personal items, activities, travel and other expenses involved in caring for a child. It is not simply a wage for the time spent fostering, and it should not be treated as unrestricted household income.

Providers normally explain which costs are expected to come from the standard allowance and which may be considered separately. Keeping receipts and simple records can help you understand the real cost of a placement and support discussions about expenses that fall outside the usual arrangement.

Additional payments and expense support

Extra financial support may be available where a child has particular needs or where a placement creates additional costs. Depending on the provider’s policy and the circumstances, this could include consideration of:

• specialist equipment, adaptations or furniture;
• additional travel connected with contact, education, appointments or activities;
• specific clothing, school or leisure requirements;
• costs associated with a child’s disability, health needs or therapeutic support;
• agreed activities, holidays or significant events; and
• one-off items needed to prepare for a placement.

These payments are not automatic. They may need to be agreed in advance, supported by evidence or reviewed as the child’s circumstances change. Ask for the provider’s written policy so you know whether a cost must be approved before you commit to it.

Fees and payment structure

Some fostering services separate the child-related allowance from a fee that recognises the foster carer’s skills, time and responsibilities. Other providers may combine elements into one payment or use different arrangements for different placement types. Payments can also differ for emergency, respite, parent-and-child, specialist or other forms of fostering.

Before approval, ask how the payment is calculated, when it is made, whether it changes for siblings or different placement types, and what happens when a placement ends. You should also clarify how agreed expenses are claimed and whether any payment depends on completing particular records, training or administrative steps.

Tax and benefits

Fostering payments have specific tax rules. Foster carers may be able to use HM Revenue and Customs’ qualifying care relief, which provides a tax treatment designed for approved foster carers. The calculation depends on the relevant tax year, the number of children cared for and the type of care provided, so do not rely on a general example when planning your finances.

Your household’s benefits may also be affected by fostering, although the rules depend on the benefit, your wider income and your circumstances. Check with the relevant benefits service before assuming that a fostering payment will be ignored or counted in a particular way. A qualified tax adviser or accountant can explain how the rules apply to you, while your fostering provider should explain the information they give you about payments.

Questions to ask before applying

• What is included in the standard payment, and what must be paid separately?
• Are there different rates or payment arrangements for different types of placement?
• How are mileage, contact travel and other agreed expenses handled?
• What equipment will be provided, and what will you be expected to purchase?
• How are additional needs assessed and who authorises extra support?
• How are payments treated for tax, benefits and pension planning?
• What records, receipts or forms are required?

Financial support should be considered alongside the practical demands of fostering. A provider should give you a clear written explanation of its allowance, fee and expenses policy during the assessment and preparation process, allowing you to make a realistic household budget before accepting a placement. Policies and rates can change, so confirm the current arrangements directly rather than relying on information from another provider or an older online source.