What financial support do foster carers receive?

Financial support for foster carers usually consists of a fostering allowance for the child’s everyday care, with some agencies also providing a separate fee for the carer’s skills, time and responsibilities. The total payment depends on the agency, the child’s needs, the placement type and the carer’s experience, so it is important to request a written breakdown before applying.

The main elements may include:

• Fostering allowance: this is intended to contribute towards food, clothing, personal items, household costs, travel and activities. It is paid to support the child’s care rather than as a profit or personal income.
• Professional fee: some fostering agencies pay an additional fee to recognise the work involved in fostering. This can depend on the carer’s skills, training, experience and the complexity of the placement.
• Enhanced payments: a higher rate may apply where a child needs specialist care, increased supervision or support from carers with particular experience. The criteria and level of payment should be explained before a placement is agreed.
• Equipment and initial costs: support may be available for items such as bedroom furniture, bedding, clothing or other essentials when a child first comes to live with you. Ask what is provided directly, what must be purchased by the carer and whether prior approval is required.
• Travel and activities: some agencies contribute towards approved journeys, school-related travel, contact arrangements, hobbies or activities. Keep receipts and confirm mileage and expense rules, as not every cost will be reimbursed automatically.
• Training-related expenses: an agency may cover approved training costs or reasonable expenses connected with required learning. This should be clarified as part of the agency’s training and support arrangements.

Payments can change when a placement begins, ends or moves to a different level of support. The amount may also be different for emergency, short-term, long-term, respite, parent-and-child or specialist placements. Ask whether the payment is made per night, per week or under another arrangement, and whether it continues during agreed breaks, holidays, introductions or periods when you do not have a child placed with you.

Before accepting a placement, check the payment terms alongside the child’s care plan. Important questions include:

• What is the basic allowance and what costs is it expected to cover?
• Is there a separate professional fee, and how is it calculated?
• Are enhanced rates available for particular needs or placement types?
• Which equipment, travel and activity costs can be claimed?
• Do expenses need approval in advance, and what evidence must be kept?
• When are payments made, and what happens if a placement ends unexpectedly?
• What happens to payments during respite, holidays, planned transitions or gaps between placements?

Fostering payments can also affect your tax position and, in some circumstances, access to means-tested benefits. Foster carers may be able to use HM Revenue and Customs’ Qualifying Care Relief scheme, which provides specific tax treatment for qualifying fostering income. The rules depend on your circumstances and can change, so keep accurate records and obtain current guidance from HMRC or a qualified adviser. Do not assume that a fostering allowance will be treated in the same way as ordinary employment income.

It is sensible to prepare a realistic household budget before applying. Include food, utilities, transport, clothing, activities, school costs, insurance and any changes to your working arrangements. The allowance is designed around the child’s care, so it should not be treated as guaranteed disposable income or as a replacement for a salary. Agencies should explain their current rates, payment schedule and expenses policy clearly during the assessment and approval process.

Financial support is only one part of the package. You should also compare the training, supervision, practical advice, out-of-hours arrangements, respite options and ongoing support offered by each agency. A clear payment structure, written terms and an opportunity to ask questions will help you understand the financial responsibilities before you make an application.