What financial support is available to foster parents?

Financial support for foster parents is usually made up of a placement allowance, with some carers also receiving a professional fee and reimbursement for agreed costs. The amount and structure depend on the fostering service, the type of placement, the child’s needs and the carer’s training or experience, so the full payment scheme should be explained before you apply.

What the main payments are intended to cover

• Fostering allowance: this contributes towards everyday costs such as food, clothing, personal items, household bills, activities and travel connected with caring for the child.
• Professional fee: some fostering services pay an additional fee to recognise the time, skills and responsibilities involved in fostering. This may be linked to the carer’s experience, training, approval level or the needs of the placement.
• Additional placement payments: a child with complex needs, or a placement requiring specialist support, may attract different payment arrangements. The fostering team should explain how these circumstances affect the allowance or fee.
• Specific expenses: some costs, such as travel, equipment, school items, activities or other agreed requirements, may be paid separately or reclaimed under the service’s expenses policy.

The allowance is not simply a wage for providing accommodation. It is intended to help meet the costs of caring for a child and maintaining a suitable standard of care. A professional fee, where offered, recognises the carer’s role and commitment separately. Ask whether each element is paid per child, per placement or according to another arrangement, and whether payment changes when a child’s needs or placement type changes.

Costs you should discuss before approval

Fostering can involve expenses that are not obvious at the start. These might include adapting a bedroom, buying appropriate clothing, paying for activities, arranging transport, attending meetings or covering additional household use. Some costs may be included within the regular allowance, while others may require prior agreement. Do not assume that an expense will be reimbursed: check the policy, approval process and evidence required, such as receipts or mileage records.

You should also ask how payments work for introductions, short breaks, emergency placements, placements that end unexpectedly and periods when a child is not living with you. Different arrangements may apply, and a clear explanation helps you budget realistically rather than relying on the headline allowance alone.

Tax and benefits considerations

Fostering payments can have specific tax treatment under the qualifying care relief rules, but your personal position depends on your circumstances and the payments you receive. Other income, household benefits and the number or type of placements may also affect your finances. Keep accurate records of payments and relevant expenditure, and obtain current guidance from HM Revenue & Customs or a suitably qualified adviser before making decisions based on tax assumptions.

If you receive means-tested benefits, tell the relevant department that you are considering fostering and ask how fostering income will be treated. The effect can depend on the benefit, your household circumstances and the rules in force at the time. The fostering team can explain its payment arrangements, but it cannot replace independent benefits or tax advice.

Questions to ask the fostering team

• What is the current allowance for different age groups and placement types?
• Is there a separate fee, and what determines whether a carer receives it?
• Which expenses are included, which can be claimed separately and what approval is needed?
• Are there additional payments for equipment, travel, activities, holidays or special occasions?
• How are payments handled when a placement changes, pauses or ends?
• How often are allowances reviewed, and how will changes be communicated?
• What records should you keep for tax and expense purposes?

Your local fostering team can provide the current figures, written payment information and an explanation of how the arrangements would apply to your household. Reviewing these details alongside your likely household costs gives you a more accurate basis for deciding whether fostering is financially workable for you.