What Financial Support Do Foster Carers Receive?

Financial support for foster carers usually consists of payments intended to cover a child’s everyday costs, with some fostering services also offering additional fees, expenses or one-off contributions. The exact package depends on the fostering service, the child’s circumstances and the terms of the placement, so it is important to request a written breakdown before applying.

• Fostering allowance: This is designed to contribute towards costs such as food, clothing, personal items, household bills, transport and activities. It is not simply a payment for taking a child into your home; it is intended to help provide the standard of care agreed for that child.
• Fees or professional payments: Some fostering services make a separate payment to recognise a carer’s time, skills and responsibilities. Whether this applies can depend on the service, approval category, training, experience and placement.
• Additional placement payments: A child may need extra support because of their age, health, disability, education, behaviour or other circumstances. The fostering plan should explain any agreed additional funding and what it is intended to cover.
• Expenses and equipment: There may be help with approved travel, essential equipment, clothing, school-related items, activities or other agreed costs. Keep receipts and check the claiming process, as services differ in what they reimburse and whether approval is needed beforehand.
• Occasional or planned payments: Some services provide separate arrangements for events such as birthdays, holidays, transitions or other significant needs. These should never be assumed; ask what is included in the policy for your service and the child’s placement.

The allowance should be planned around the child rather than treated as disposable household income. Before a placement begins, discuss the child’s likely costs, pocket money, clothing, travel, hobbies, school requirements, contact arrangements and personal items. Agree who will pay for larger purchases and how exceptional expenses should be authorised. This prevents uncertainty and helps ensure that the child can take part in ordinary family and community life.

Payments can be affected by the type of fostering arrangement. For example, the financial arrangements for emergency, short-term, long-term, parent-and-child or respite placements may not be identical. A placement agreement should set out the payment rate, payment dates, additional allowances, permitted expenses and what happens when a placement changes or ends.

Tax and benefits need separate consideration. Foster carers may be eligible for special tax treatment under HMRC’s qualifying care relief rules, but the calculation depends on the household’s circumstances and the care provided. Fostering payments can also interact with means-tested benefits, employment income, savings and other household changes. Do not rely on a general statement that fostering will or will not affect your benefits: obtain advice based on your circumstances and report changes to the relevant benefit office when required.

During the assessment process, your fostering service will usually discuss household finances and whether you can manage normal costs without depending on fostering payments to meet essential personal bills. This is not the same as requiring you to be wealthy. The purpose is to check that financial pressure will not prevent you from meeting the child’s needs, maintaining suitable accommodation and managing costs if a placement changes.

Ask these questions before making a decision:

• What is the basic allowance for the placements I may be approved to take?
• Is there a separate fee, and what conditions apply to receiving it?
• Which costs are included in the allowance and which can be claimed separately?
• How are travel, activities, clothing, equipment and contact-related expenses handled?
• Are payments different for siblings, children with additional needs or different placement types?
• What happens financially during introductions, planned respite, temporary absences or an unplanned end to a placement?
• Which records and receipts must I keep?
• What independent tax and benefits advice should I obtain?

A clear payment schedule, written placement information and regular reviews make it easier to budget responsibly. Your supervising social worker or fostering team should be able to explain the current arrangements, while an independent benefits adviser or tax professional can address questions specific to your household.